For generations, people have been considering luxury cars to be status symbols as they always seem to depict affluence, power, and elegance. However, these cars aren’t just about plush leather seats, premium grilles, alluring curves, and roaring engines; they’re also a financial investment. Although they’re typically more expensive than regular cars, there are certain reasons why you can’t go wrong with a luxury car investment.
1- It Has Depreciation Resilience
Luxury cars are usually built with cutting-edge technology and exceptional craftsmanship that make them stand the test of time. Their exteriors, for example, are built with high-quality materials, such as carbon fiber, which enables them to withstand the stresses of extreme conditions. Some manufacturers even use bamboo and bio-fabricated silk, both of which not only make the cars more environmentally friendly but also durable. All these factors reinforce the perceived value of these vehicles, resulting in slower depreciation rates over time.
2- It Has a Limited Production
Luxury vehicles, such as many Rolls Royce models, are usually expensive to manufacture. The target market also tends to be smaller than that of regular cars, and that’s why manufacturers produce them in limited numbers. Besides making them highly desirable among enthusiasts and collectors, this drives up their resale value in the secondary market. Therefore, getting yourself a coveted and rare luxury vehicle is a good way to make money later on when demand has outstripped supply even further.
3- You Can Use It as a Loan Collateral
You never know when you might have to secure a loan to pay for an emergency expense, such as an expensive medical procedure. Thankfully, owing to their high market value and exclusivity, luxury cars often serve as excellent collateral for secured loans. For example, having such a vehicle allows you to access an auto equity loan, which enables you to borrow against your car’s equity. The fact that some lenders can offer as high as 125% of your equity (the difference between your loan’s balance and the amount of money your car is worth) means that a luxury car would get you more money compared to a regular car.
4- It Can Generate Additional Revenue
Lastly, owning a luxury car is a great opportunity to generate extra money by renting it out for special occasions, such as corporate events, film and photo shoots, and weddings. Firstly, renting the vehicle out can help you offset most or all the costs associated with ownership, such as maintenance and insurance. Secondly, you can recoup a part of the initial purchase price and potentially make a profit in the process. Thanks to their premium features, performance, and prestige, luxury cars usually command higher rental rates than standard vehicles, allowing you to earn more every time you rent them out.
If you’ve been thinking of treating yourself to a luxury vehicle, you don’t have to write off the idea based on the price tag alone. Try looking at the bigger picture and consider the ways the luxury car could be a good investment in the long run.
