We as humans are emotional beings, we love great memories, feelings of success, appreciation, and status. All of this, and more plays into why some cars appreciate in value. The general rule of thumb as to why some cars appreciate over time is because society demands it that way.
Some cars appreciate the moment they leave the production line, or even before that. Those types of cars are usually made by high-end exotic car manufacturers and are produced in limited quantities. This means that the demand is much larger than the supply, which in turn boosts the value.
However, most cars tend to appreciate slowly and steadily. Sometimes a certain car model defined an era like the 1950s Chevy Bel Air, this means that today a 1950’s Bel Air in decent condition is worth increasingly more. Furthermore, people who lusted after certain cars that were produced when they were kids are also appreciating now.
If you want to know if a certain car is going to appreciate or not, you should primarily focus on popularity, rarity, overall condition, and cars that have pioneered certain types of technologies. However, no one can guarantee that a certain car will ever appreciate because only time can tell.
Exclusive new supercars and sportscars – Perfect short-term investment cars
Whenever someone sees a high-end Ferrari model, they initially think that the person driving it is comfortable with spending a few hundreds of thousands if not millions of dollars on a depreciating asset. However, in most instances, that’s not the case because these cars are often viewed as short-term investments.
For example, pretty much every high-end limited production supercar is unattainable for most people because they deem them as excessive and unnecessary. They usually cost obscene amounts of money while only being offered to a certain amount of most loyal customers.
However, these cars often appreciate 20%, 30%, 50%, or even 100% or more even before they hit the roads. So if you can allocate a build slot for such a car, you might as well drive it for a while and sell it down the line without losing a single cent, or in the best case, even earn a decent profit.
Popularity and rarity – Indicators of appreciation
All the current prices on every consumer item in existence are mostly defined by supply and demand. This means that society as a whole decides how much a certain item should cost. So whenever specific items become more popular due to many different reasons, the value of such items is likely to go up.
Furthermore, if such items are also rare, the rarity works as a catalyst of value appreciation. You can find many different examples of these cars, and this is a trend that will never cease to influence the car market. For example, a 1960s Ford Mustang is a car known to virtually anyone, and as such, the values of 1960s Mustangs in good condition are always high.
If the cars in question are both extremely popular and rare while still being great at what they do, they are usually the most expensive cars in existence. A perfect example of such a car is the Mercedes 300SL or the Ferrari 250 GTO. It’s worth mentioning that these two cars have also defined an era of motoring.
Pioneering cars and ‘’last of their kind’’ cars – Perfect long-term investments
The world of motoring is at a brink of a revolution. With the addition of electric cars, many aspects of road traffic, in general, are shifting towards a more sustainable and cleaner future. This is, of course, a benefit, but the drawback is that certain types of cars are a dying breed.
The perfect examples of such cars are the BMW E46 M3 and the Ferrari 458 Italia. The E46 M3 was the last true light-weight manual BMW M car. After the E46 came a different era of the BMW M3 or the entire sports sedan segment in general. All of this means that the E46 is a time capsule and is bound to become a classic one day.
The Ferrari 458 on the other hand is the last naturally aspirated serial production Ferrari V8. Besides being the last mid-engined Ferrari V8, it was also the last mid-engined Pininfarina-designed Ferrari. All of this further reiterates that the 458 is destined for greatness.
Are cars good investments?
Investing in cars is a pretty sound idea because there are many cars out there that can either be flipped or kept for a long time until they appreciate. It takes some serious knowledge, luck and determination to earn huge sums of money through investing in cars, but the more you know the market, the easier it becomes.
The best investment cars are already high in value, and access to these cars takes serious financial umph. However, you can invest in cheaper popular cars to flip them for profit.
Can anyone guarantee that a car will appreciate in value?
Cars that appreciate in value and weather forecast have a few things in common. Even though there are factors that can sometimes almost undeniably indicate that a certain event is bound to happen, things tend to change in the meantime, and so do the forecasts.
This means that if the weather forecasts indicate a sunny afternoon, there is still a chance that it might rain, no matter how certain they might be. It’s very much the same with cars as some factors might suggest that a car will undeniably appreciate, but absolutely no one can say that for sure.
What makes a car depreciate in value?
Mass production, low quality, cheapness, accessibility, lack of popularity, unreliability, technological inferiority, an overall bad condition, and so on. Whenever an item saturates the market, and there are loads of options for sale, it makes the values of such items susceptible to change.
If someone is unable to sell a car for $15k because there are many similar options in a lower price range, the prices of such cars are also nearing the lower spectrum. Cars that are often considered tools are also prone to depreciating severely after they cross a certain point of time when they become obsolete for a set purpose.