Can Used Cars Make You Rich?

For many automotive enthusiasts there exists this odd notion that the objects of their affection can make them rich. All too often I hear from friends, and colleagues that they’re interested in a particular vehicle because it is a good investment. I shudder, and shake my head when this happens because these friends, and colleagues are not 1%’ers shopping the very upper echelon of the used vehicle market. They’re average folk, some of them doing better than others, all of them obsessed with buying, and selling a variety of vehicles. No matter how good of a deal they manage to negotiate, they’re not making a good investment, in fact, they’re not making an investment at all. What they’re doing is rationalizing a risky purchase by selling themselves the idea that there might be some sort of significant financial gain to be had. In reality the best case scenario is that they’ll break even by the time they decide to sell the vehicle, and there is absolutely nothing wrong with that.

The number of affordable vehicles on the used market that are also affordable to own, are disproportionate to the number that are affordable to to purchase, and will then drain your bank account faster than a spouse with an Amazon Prime addiction. Speaking from personal experience, it is easy to get lured in by the low price on a aspirational vehicle, and then get slapped with hefty repair bills. Even when you’ve done your homework, and are somewhat mechanically inclined, that rock bottom priced ‘Bahnstormer is going to end up dinging your wallet one way or another.

In my case it was something completely out of my control, and ain’t that just always the way? I was 9 months into owning an appreciating vehicle that I had picked up at a very good price. I had fixed the things that needed to be fixed myself, or with help from a local shop, and I was poised to make a nice little profit on the vehicle. Note that I said nice little profit, not huge chunk of change. That’s because I’m just an average person, with average means, I will not ever get rich off selling a car, unless of course rusty Subarus skyrocket in value.

But I digress, back to my dream ride that the majority of my peers would call a money pit. As I mentioned, I was 9 months into ownership when I quite literally took an unexpected hit. A woman of advanced age, and by her own admission, little skill behind the wheel, struck my vehicle with her Bavarian tank, thus dashing my hope of making a nice little profit. It was a minor incident, the damage to my vehicle was limited to the drivers side front fender, headlight, and fascia. Her insurance covered everything, and I was reimbursed for my $500 deductible, but the damage had been done, the car was no longer accident free, no longer original.

There are few things worse than having to include “was involved in a minor collision” in the listing for a vehicle, especially one that had such a razor thing profit margin to begin with. Fickle as the used car market may be in general, it’s infinitely worse for German hot rods that aren’t 100% original, and free of any smudges on their record. Given the choice between an high mileage, cosmetically rough car, and a high mileage, cosmetically perfect, but not original vehicle, you should always choose the former, because OEM reigns supreme, or so says the market anyway.

When I did end up selling the car, I managed to break even, but only because the buyer understood that there was no structural damage, and because he was really, really into the car. I got lucky, and when it comes to investing, I’d really rather not rely on something so unpredictable. So many things have to go right with purchasing, owning, and selling a used vehicle just for you to break even, that the idea of getting rich off doing so seems absolutely nuts. But then again, some people can afford to take crazy risks, buying crazy cars, and listing them for crazy prices. If you’re one of those people, good for you, hopefully you enjoy looking at your Duesenberg SJ in its climate controlled vault.

As for the rest of you, hopefully you’re out there enjoying the feeling of being at the wheel of a vehicle you can drive anywhere, at anytime. When you’re done with it, perhaps you’ll break even, but most likely you’ll be into it for a bit of dough. That’s just the way it goes for most people, and that’s fine, so long as you enjoyed the vehicle while you had it. In that way used cars do make you rich, just not financially, but instead by teaching you a valuable lesson. I certainly felt that was the case after selling my last car, and in this crazy world, what’s more valuable than experience?

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