You will find this article useful if you are interested in electric vehicle stocks, or already have investments in the real, ageless automotive businesses of various classes.
The income generated from the auto business is much higher than a deposit in the bank or renting out real estate.
From the very beginning of investing with Gainy, you are the owner of the car and continue to be until it is sold.
Our team will answer you how to invest, what are the “desirable” and “undesirable” niches in the car investment market, which cars will disappoint you with their profitability, and many other questions. And now let’s talk about used cars. Is it really a profitable investment?
Introduction
Table of Contents
Have you visited a car bazaar or watched online deals lately? If so, you must have noticed the rise in used car prices. It may be hard to believe for many, but the best investment right now may be used cars. In times when the economy is riddled with inflation, and you have spare cash that you would like to make the most of, buying a used car may be the best strategy. Or even three. Why do you ask? We’ll tell you more than that.
The price of used cars isn’t dropping due to two main facts – historical value retention and a persistent chip shortage. It’s likely that used car values will outpace other investments in the coming year and continue to rise instead of fall. This is confirmed by financial indicators, where used cars are winning.
Persistent chip shortage
Wondering whether falling inflation will stop car prices from rising? Probably not. Traditionally, falling inflation does not cause a related fall in the value of used cars. The reason used car prices remain high is because of the continued high consumer demand for buying used cars.
As many consumers realize, one of the most significant commercial effects of the Covid-19 pandemic is the shortage of automotive semiconductor chips (or “microchips”) that control nearly every aspect of the modern automobile. Why hasn’t supply caught up with revised demand, you ask? The answer is simple: it takes years and billions of dollars to build new plants. So the current chip shortage is creating a vehicle shortage that shouldn’t subside anytime soon.
Will the price of cars in car dealerships drop anytime soon?
Probably not. The situation during the pandemic that started it all has an impact. In 2021, used car prices and trade-in values at auto bazaars skyrocketed. This was due, as we noted above, to a short supply of vehicles and increased demand to buy them.
Unfortunately, not much change is expected this year. Available stocks of new and used cars will remain low until 2023. So if you browse online classifieds, you’ll soon notice that prices are stable and will continue to be so for the rest of the year.
Stop by the car dealership for classic cars and vintage cars
Although classic cars were once considered risky, they have become increasingly popular and a worthwhile investment in recent years. With the finite number of examples and models produced becoming rarer every year, the vast majority of investment-grade classic cars are increasing in value. Not only do these vintage vehicles provide a long-term return on investment, but owning a classic car is also much more fun than having its value in cash in your bank account.
We’ve all heard stories about cheap barns that are bought only to increase in value exponentially later. The same is true of automobiles, there are still dozens of historic models that increase in value year after year.
Should you get a hybrid, electric or traditional internal combustion engine car?
The current decade is bringing transformative innovations that have the potential to reshape the structure of the light vehicle industry. One of them is the electric car, which has expanded the range of not only new but already used cars in car dealerships. Are innovative electric cars worth buying? Or is it better to bet on the classics?
Most existing electric cars are modifications of existing combustion engine vehicles. Many have limited range and are full of design compromises. Petrol-electric hybrids have proven to be very reliable. The problem with all-electric vehicles is their range, the remaining power of the manufacturer, and their higher cost compared to conventional models. Their advantage is the cost of fuel compared to the ever-increasing price of gasoline or diesel.
How to choose a reliable used car
Choosing a reliable used car may not be easy. With older vehicles, you need to think about the fact that they are no longer under warranty and will need to be repaired. For example, servicing some types of automatic transmissions can cost tens of thousands of crowns. You will have to pay for any repairs you need out of your own pocket. Therefore, you should think carefully about selecting a vehicle from a car dealership.
The most commonly purchased used vehicles over 10 years old include:
- Volkswagen Golf or Passat
- Skoda Octavia
- Ford Fusion
- Audi A3
- Honda CR-V
There are several risks when buying a used car from a used car dealership or online classifieds.
You should definitely only buy a vehicle that has:
- Original documents. If the owner does not have them, walk away from the purchase immediately.
- The information in the service book, on the vehicle, and when you enter the VIN number online, should match.
- The bill of sale. For you as the buyer, the bill of sale is proof of purchase of the vehicle.
- Buying a used four-wheeler at an auto dealership may be the quickest way to a new vehicle. However, don’t just look for the car with the lowest mileage. The main thing is to make sure it’s in the best possible condition and has a proven maintenance history. When buying used cars at a used car dealership, you have countless options for what vehicle to opt for. The choice is yours. And it doesn’t pay to wait to buy today.
