Think about some of the investments you make in life – many of them are much smarter than others. A house is the perfect example of something you invest in that provides wealth over time. You benefit from a comfortable place to live and raise your family, but property prices dictate that it usually grows in value. The majority of people will sell their house for more than they bought it. Therefore, it’s a frugal bit of business!
By contrast, look at your car. Generally, most people make poor decisions when buying cars as they never turn into a profitable investment. Unlike property prices, the value of a car will decrease as soon as you drive it. Thus, most of you will sell yours for a loss. Today’s post is all about turning this loss into a profit, making your car a more frugal investment. Yes, it can be done, but only if you’re savvy. Here are a few thoughts to help you out:
Buy as cheap as can be
Never buy a brand new car if you want it to be a good investment. The value will only ever go down, whereas a used car has the potential to increase. Have you ever seen shows like Wheeler Dealers? Effectively, two guys buy a cheap used car and transform it into something a lot better. Sometimes they make aesthetic improvements, other times it’s more technical upgrades to the engine, etc. Either way, the cost of making these changes increases the car’s value. In turn, they sell it for more than they bought, making a profit – even when including the cost of repairs.
Consequently, you could do a similar thing with your vehicle. Buy one for as cheap as possible – but make sure it still works and isn’t a complete state. Then, you can make changes yourself and improve the car if you want. In doing so, the resale price goes up, so you could make a profit when you eventually decide to sell. Some people will actually just buy and sell cars like this to make money on the side, so you could do that if you want some extra income and have spare time!
Make your car last for as long as possible
A car is a terrible investment if you buy it, drive it for a year or two, then sell it for a significant loss. However, if you sell your car for a slight loss after having it for ten years, is that a bad investment? By all means, making a profit is ideal, but you should also consider how much use you got out of your vehicle.
Think about it; you pay for a car and use it every day for ten years. That’s an incredible investment as it definitely proved to be worth every penny. So, you can rest easy knowing that the loss you make isn’t that bad. Again, if you make some improvements and sell it for a profit, then you’re laughing all the way to the bank! Still, focus on increasing the longevity of your vehicle to make the investment worth it.
Here are a few common maintenance tasks that will help you do just that:
- Check and maintain the correct tyre pressure
- Change the oil regularly
- Take your car in for yearly servicing
- Be gentle when driving and don’t force the accelerator down or jerk the gearstick
- Be a sensible driver so you avoid accidents
Use your car to make money
Next, you can boost this investment by making money from it. This is probably the best way that you can turn a car into a profit. Instead of driving around in it without a care in the world, use your car to actually provide a source of income.
It may sound crazy, but there are dozens of ideas you can use in this scenario. For starters, you could become a driving instructor and earn loads of cash in your spare time. Or, get a part-time job as a delivery driver and rake in the money. You could even do something as simple as advertising for other businesses via your car. Many companies pay good money to have a wrap placed on your vehicle that advertises for them. If you don’t care about how this looks, it can be easy money as you don’t have to do anything.
As you can see, there are lots of fun and interesting ideas to explore. Everyone should think about this as it makes your car a better asset. You’ve invested in something and can use it to make more money. In a few months, you may have already reclaimed what you paid for the car! These ideas are particularly useful if you’re currently redundant due to the pandemic. Delivery driver jobs are definitely in demand, but consider any other ideas that only involve a car. It can be a smart way to keep earning money as you look for a permanent job.
Reduce the running costs
Lastly, your car will be more valuable when it costs less money to run. That’s one thing you forget about cars; they cost money to buy, but you also have the ongoing costs. Thankfully, many of these can be reduced by following the tips in the earlier bullet points. Certainly, regular maintenance prevents repairs and keeps the costs as low as can be.
Nevertheless, you should still explore ways to cut the running costs by reducing your fuel consumption. Learn how to be an economical driver, and you will spend less money on your vehicle every single month. Over time, this all adds up and makes your car a much better investment.
See, it’s not that hard to turn a car into a frugal investment! If you play your cards right, you can actually make a profit on this purchase. Even if you don’t, it’s still a savvy investment if you can use it for as long as possible. Follow some of these ideas if you want to get more bang for your buck and make your car more valuable.