Should We Think About Investing in a Car?

The word 'investment' means you expect a return on the money you put in. That probably isn't appropriate when thinking about spending money on a car. The truth about investing in a new car is that you'll lose money, not make it. Virtually all cars lose money and much of that loss comes after the initial purchase. estimates that the real cost of a $25,000 car is $33,604 after adding the cost of insurance, repairs, maintenance and registration with the state.

There is an exception, but it isn't anything more than a technical possibility. If you have an enormous amount of money, look for exotic supercars. Exotic doesn't mean Ferrari or Lamborghini. You want a car which has been manufactured in numbers less than 500. Actually, cars that have been made in numbers less than the fingers you have on both hands are even better. Cars like the Bugatti Veyron, Saleen S7 Twin Turbo and the Pagani Zonda may go up in value because they're unique and rare. The Bugatti Veyron is the fastest, most powerful car ever made. It cost $1.6 million at the factory, and Volkswagen only made 315 of them. It will probably go up in price. However, if you have the money to buy it, you didn't get it by making investments which would 'probably' bring a return. The automobile marketplace is too chaotic to show any kind of dependable behavior. Technically, however, it is possible to make money buying this kind of car.

You'll be better off thinking of an investment in a car in the same way you think of buying a house. We can make money from the purchase of a house, but that isn't the reason we do it. We may ask a realtor whether house prices are stable or increasing in a certain neighborhood, but we really want a place where our family will be able to grow and flourish. We're more concerned about good schools, a safe neighborhood and a comfortable family room where we can watch baseball on Sunday afternoons than we are about return on investment.

The car you buy should do the same thing. It should reward you with a good life experience. Since you spend about 18 hours a week behind the wheel, the choice of a car will affect your quality of life. What do you want to experience in the car? Is it the feeling of flying? Is it the music you listen to when we're driving? Is it time spent with the family when you're all in the same car? Whatever it is, you need to find a car that delivers that experience. It may be reasonable to sacrifice other material considerations to magnify the experience behind the wheel. Some people enjoy the ambience of a British sports car. They glory in the taut feel that comes through the steering wheel and the smell of the leather in the car. They may find it rewarding to accept the increased repair cost and decreased reliability in order to get that feeling.