An investment is something that becomes more valuble as time passes. In this context, few vehicles could be regarded as investments because they usually depreciate in value as soon as they are driven off the car dealer’s lot. In referring to a vehicle as an investment would encompass those that deliver the most customer satisfaction for the least amount of money . There are three factors involved in determining what makes a vehicle the “best” investment:
The first factor is the initial price of the vehicle. One can pay as little as a few hundred dollars for an older vehicle with high mileage; up to a million dollars for a rare, exotic one. Most of us typically select a price somewhere in between; from $5,000 to $50,000. The only type of vehicle that might actually increase in value would be a classic car from the 1950’s to early 1970’s. Such vehicles, however, would only be suitable for limited driving, because they will decrease in value as their mileage increases. In fact, some purchase limited edition exotic cars as Ferraris or Aston Martins, only to have them placed in air-conditioned garages without ever driving them. They would hold onto these cars for several years, then resell them at higher prices because of their rarity. Most of us, however, purchase a new car for regular, daily driving.
The second factor would involve monthly operating costs. The major component of these costs is fuel. Vehicles that provide optimal fuel economy would be a better investment than those that are “gas guzzlers”. Operating costs would also include maintenance requirements as oil changes, tires, brakes, and other items that may wear out and require replacement. In general, more expensive vehicles cost more to maintain, because replacement parts are more expensive. Car insurance premiums are also part of operating costs. Sports cars with large eight cylinder engines will exact a significantly higher premium, as will vehicles with expensive replacement parts.
The third factor would involve depreciation. Some vehicles may lose up to half of their initial value only one year after purchase. The majority of large SUVs tend to show high depreciation, which increases further as fuel prices rise. Others maintain a greater percentage of their value, depending on mileage and condition.
Based on these factors, the vehicle with the best record as an investment for daily use would be a new Honda Civic, which can cost anywhere from $14,000 to well over $20,000; depending on the model and equipment options selected. It has been rated at the top of most automotive experts’ lists for reliability, low operating expense, and retention of value.
For a vehicle that might actually appreciate in value over time, one might consider a vintage Ford Mustang convertible between the years 1964 to 1973. Parts are readily available and affordable, and its popularity has remained strong. There are many precautions, however, one must take when purchasing any classic car of this nature. Value for such a vehicle is heavily dependent on its condition. Presence of the original body and mechanical parts is critical. Replaced engines and body parts may look better and give improved performance, but will reduce the vehicle’s value greatly. One must be willing to invest a great deal of time and patience in buying a classic car; along with the proper amount of cash.
For a car buyer to make a wise investment, the use of the vehicle needs to be considered. A classic Mustang or muscle car from the 1960’s may appreciate in value, but may not be very practical for driving to work, or running errands. In addition, a prime example will cost from thirty thousand to over one hundred thousand dollars. A car that is a good investment is one that costs under twenty-five thousand dollars, is fuel-efficient, and will run for many years with routine maintenance.