Are cars investment? (1 Viewer)

[IceBreaker]

i see some people at my school buying either new expensive cars or 2nd hand decent cars and modifying it with their 1st 5-10K. Wouldn't it be better to invest the your hard savings into something else giving you returns(shares, managed funds etc.)?, its just money down the drain. Nothing wrong with getting a car, its necessary for some people such as for work and its a hobby for car lovers. Cars comes with other cost ;insurance;petrol;maintenance and most of all they deprecate!. Use public transport, borrow parents cars or car pool with your friends. if you really need just buy a 2nd hand car and maintain it. use your saving into creating more money, while your still young. Buy that expensive car when you get a full-time decent income.

 

[bJ_Bhoy 87]

Um, no, what your talking about is not an investment. Youll never see that moolah again. When you buy a new car from a dealer, the car instantly drops 30% of its value. People who spend 10k on mods for their cars are perhaps lucky, perhaps financially foolish at our age but definitely car enthusiasts. Which is not a bad thing.

 

[Frigid]

if you really need just buy a 2nd hand car and maintain it. use your saving into creating more money, while your still young. Buy that expensive car when you get a full-time decent income.

who are you to dictate your values to other people? how they spend their income, hard-earned or otherwise, is really none of your business. sure, it may be not a wise thing to do from an economic point of view, but hey it's not your loss.

volenti non fit injuria.

 

[braad]

it's very rare that a car will actually make a profit for it's owner

especially if you buy new. Generallly you lose a coupla thousand as soon as you sign/pay for the car

some cars can be assets as such in that they're very very useful. i.e. a builders ute

but in terms of spending 5K and hoping to sell it for a few thousand more (on top of cost, expenses, etc) then tell them to give up.

 

[insert-username]

If you use a car for work, or if a car allows you to earn more money at your job, then it could be regarded as an investment, since you're using it to earn money. However, in the general sense of the word, cars are not investments since they depreciate in value and require a lot of money to keep running.

If you're an enthusiast, or doing it as a hobby, of course, it's a whole new ball game.


I_F

 

[loquasagacious]

In economics terms if an enthusiast is dropping $5K on mods for their car then they must be extracting $5K or more satisfaction....

 

[7th Sign]

my dads cars go up in value all the time...so I guess their an investment...

 

[55psi]

cars CAN be an investment. By this i mean classic cars, rare cars, any kind of car that was very very limited in their production.
People who restore old classic and rare bunged up cars will be able to retain their profit within the value of how much the car is worth. Think of the very old and classic ferraris, theyre worth a fortune.
But not all classics and rares go up in value, it depends on what it is.

 

[Zozo6969]

Yeh look at a few of the old Mustangs and the old Ford GT HO Phase whatever.

 

[Jess-a_belle]

genreally the kinda kids ur talking about "the ones at school modifying their cars" are car enthusiats, not looking to make a profit, its a personal interest. unfortunatrly the moeny you SPEND modifying a car is never gonna come back when you sell it, so generally its cos you want to, not cos it wil 'sell for more'



coming from a huge enthusiast myself

 

[loquasagacious]

It can be profitable eg if you can buy a VL write-off for say $500 the replacement panels for say $200 and having fixed it sell it for say $1500 one of the guys at work.

Another example would be say a camry with a stuffed engine $500 new engine $800 new value $3000 - and that ones a personal example.

Then there's the wrecking value eg for many cars the sum of the parts is greater than the whole so it can be profit turning exercise to buy a whole wreck and then 'break it' that is strip it and sell the parts. Prime examples of this are anything european where this can even be the case for brand new eg the component parts of a brandnew say BMW 3 series have a higher market value than the car itself.

 

[braad]

it's quite simple

if people want the that type of car enough, they'll pay more for it (i.e. classics, rare cars)

even new cars, when in limited/slow production, and high demand people buy them and then offer them but with $10,000 ontop of RRP to make a profit (One of the Lancer Evo editions had this)

:/

 

[bJ_Bhoy 87]

I dont think IceBreaker was talking about Mustangs or HOs, but '94 Civics or something like that. And anyone who makes a profit out of a VL write off is few and far between.

 

[55psi]

yeh people can definately make profits by fixing up wrecks, some people have jobs just for this. All it costs is the stuff and time and labour.

 

[liquimalish]

My ute was limited to 200, so given writeoffs etc and the popularity of utes ATM, i'de be able to get the same if not more for my ute

 

[seremify007]

The reason why people put money into their cars is usually not for capital gains but rather the status which accompanies it. It's not to say you can't make money out of modifying cars- but I think you have to have a bit of credibility (and funding) before you'll be able to start making a lot of money out of it (eg. companies like GReddy, AC Schnitzer and Brabus). These companies typically import the vehicle themselves, apply their own modifications, and then resell. My cousin purchased a 2003 modified GReddy z33 Fairlady (aka 350z) for around $100,000aud (RM308,000). The vehicle was second hand, then GReddy (or the local distributor) imported it into Malaysia, applied all the modifications (eg. GReddy Oil Catch Tank, Strut Bar, Spring F/R, Power Extreme Ti (Titanium), Timer, various meters and control units, Airinx Adapter, etc..) and tuning.

... but most people aren't that pro in terms of resources and so on, so I'm not really sure how much money you can make from it. If you're lucky you'll end up with a little profit for your effort, but then that profit will be eaten away by the fact that the car has mileage and is second hand, has no warranty/guarantee, etc... lowering the value of the car. The aforementioned z33 at least comes with warranty for all parts and servicing.

The other way to make money is buying cars before they go out of supply and then when they are in high demand, you can charge a premium for it provided it's in near-new condition. Quite a few people pulled this stunt off with Golf GTIs and the new Toyota Prius- selling second hand (but barely used) cars above the RRP.

... also forgot to mention the b/s of classic cars and so on, but then these are hard to find, hard to sell, and I don't think you're really interested in that.

 

[braad]

My ute was limited to 200, so given writeoffs etc and the popularity of utes ATM, i'de be able to get the same if not more for my ute

what is it?

it really depends, because some 'limited editions' these days are just the normal version plus leather seats/trim bits/alloys...

not saying you couldnt sell yours for more than RRP or whatever you paid for it.

 

[seremify007]

what is it?

it really depends, because some 'limited editions' these days are just the normal version plus leather seats/trim bits/alloys...

not saying you couldnt sell yours for more than RRP or whatever you paid for it.

A limited edition tends to only be limited to the number of people who want to buy it.

Although I will admit sometimes those limited editions are actually pretty good value- my mate got an Impreza with leather bucket seats, sunroof and various other goodies for under $27k on road.

 

[Not-That-Bright]

You can make money, but for your time/effort you might as well have been working at maccas.

 

[¬_¬]

... or doing extra curricular activities at university to improve chances of getting a better job later on.