How to Make Money Investing in Cars

By: Mr. Slide

You hear it all the time.

“Don’t buy that hunk of junk, it’s a terrible investment.”

“Cars make awful financial assets.”

“They immediately depreciate after you drive them off the lot!”

“They’re a waste of money!”

 

Wrong! Believe it or not, cars can make excellent financial investments — you just need to buy the right ones.

Yes, yes, yes, we all know that certain monsters like Ferrari, Bugatti, and Rolls Royce, always draw a big demand from greedy collectors. However, there are a slew of other vehicles that people (surprisingly) are willing to pay top dollar for. Understand the shared characteristics of these cars and you can become a savvy automotive investor.

 

What’s Hot Right Now?

First off, the car you’re looking to flip has to have a manual transmission. This is a must. Automatics are more expensive to maintain and collectors don’t have that same psychotic affection for them. Also, please…keep the mileage down. Automotive aficionados prefer pristine (garage baby) cars that haven’t really been meddled with.

Trendiness is another major factor to keep in mind. People often look for cars, or car styles, that define an era. They want a vehicle that will make them think, “Wow! I remember when I used to see those on the road all the time. Those were simpler (better) days.”

S.U.V. Super. Unique. Value.

As Mr. Power pointed out, folks today are obsessed with SUVs. As a result, there is a massive demand for the oldies. Take for instance the Ford Bronco: in the 1970s and 1980s these vehicles were everywhere. They cost $7,500 for the base two-door model in the 70’s, and now they’re selling for about $70,000[1]. That’s an 833% increase in value. If you want to figure in inflation: $7,500 in 1971 is $45K today, which is expensive, however the Bronco flipped in 2017 still brings in a 55% profit. That’s a pretty solid investment.

Seriously, if you have the cash, and don’t mind waiting, investing in cars can be a fantastic way to make some money. You just have to read what people like, buy one, and stuff it in your garage.

Hmmm…I wonder what kind of car could be the next Ford Bronco (hint, hint, Performance Hatchbacks, baby!)

Buy. Store. Sell.

That’s right; The Powerslide is back at it again hyping hot hatches. They are extremely popular on Europe’s narrow roads and ready to explode in America (if we can just get some more good ones). Most of the performance models, like the Honda Civic Type R, the Ford Focus RS, and the Volkswagen Golf R, already come standard with 6-speed manual gearboxes and distinctive looks.

They also have already garnered a tremendous demand from the younger generation. Kids today think they are cool and wish they could afford the marked up prices. However — they can’t ­— but perhaps you can. Buy a hot hatch now, throw it in the garage for 15 ~ 20 years, and boom. Retirement fund.

Ford Focus RS
A Ford Focus RS from autocar.co.uk http://images.cdn.autocar.co.uk/sites/autocar.co.uk/files/styles/gallery_slide/public/ford-focus-rs-rt-2016-125.jpg?itok=chMaUcOh

 

The same way you youthfully dreamed of the 1970’s Bronco is the same way today’s kids fantasize about hot hatchbacks. They have a strange aura about them. An aura you can capitalize on — they are generation defining.

 

 

 

[1] https://classics.autotrader.com/classic-cars/1971/ford/bronco/100882148

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s