The fact is that most cars will depreciate in value.
It’s hard to look at a car as an investment especially when a chunk of the car’s value is wiped away as soon as you drive it off the forecourt. In some rare cases, a car can appreciate in value, but these cars usually cost more than most people can afford.
To help you make sense of this harsh reality, I have put together a list of 10 reasons why most cars don’t appreciate in value.
1. Production numbers
Most cars are mass produced. This means that your vehicle is less likely to be viewed as a rare commodity. Valuable cars are normally part of a limited production run. Limited production numbers make a car likely to increase in value over time. Wealthy individuals often see limited edition vehicles as an opportunity to invest and make a profit once the car has appreciated in value. Unfortunately, most cars are not limited edition or rare which means that most cars will depreciate in value, rather than appreciate.
Some cars have a reputation for being unreliable. An unreliable car will depreciate in value because people will not be drawn to purchase something that is likely to experience problems. In fact, most people put reliability high up on their list of priorities when considering which car to buy next. Reliability issues result in repair work which costs money. Most people would rather purchase a car that is known for being reliable because it means they run less risk of having to pay a mechanic to fix it whenever something goes wrong.
Cars that appreciate in value are often very desirable. Whether it is the design of the car, its historical value, or what it represents, someone needs to want the vehicle in order for its value to increase. If nobody likes how the car looks, drives or functions then it is unlikely that they will see value in it.
Generally, people are not cautious about how many miles they do in their car. However, mileage is a huge factor when it comes to a car’s value. The more miles you have driven in your car, the less it will be worth. You will find that owners of rare and valuable vehicles are extremely cautious when it comes to mileage. It’s because they know that the lower they can keep the mileage, the more the car will be worth when it eventually comes time for them to sell.
Many of us drive on a daily basis which can cause the condition of our vehicle to deteriorate. A car that is in poor condition will be of less value. Therefore, it is important to look after the bodywork, interior and engine. The more you drive your car, the more it is exposed to the risk of accident or damage. The only way to avoid this type of risk is to shelter your car from the elements and drive it as little as possible. Most car collectors take great care in preserving their vehicles and will often keep them safely tucked away in a garage or storage facility. Some people even go to the trouble of restoring classic vehicles and although they can be worth a lot of money they will never be worth as much as a well preserved original.