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Why do people say a car is an investment? And I don't mean a classic car or something like that (they might be for all I know), I mean a day-to-day driver.
The reason I bring this up is because I've been car shopping. I finally figured out what I want, but both new and used, I need to save more money before I can buy the car I want. So I am just waiting and saving more. But while test driving a lot of the car salesmen talked about how the car was an investment. I told one (the car salesman I actually liked) that I "politely disagree" and that a car is an expense and maybe an asset, but not an investment. He just didn't agree and said, "no, it really is an investment" and I just dropped it there since I wasn't interested in arguing. I just wanted to learn more about the car I was considering.
I suppose that with car sales, it helps them to sell cars. But I also hear this from other people... mostly acquaintances to whom I mentioned I was car shopping. Where does this idea of a car being an investment come from? With investments you might lose money, but usually in time you gain money on stocks, bonds, and even real estate. But a car always loses money (usually a lot in the first 2-3 years). Just wondering where this outlook on cars comes from and if it can ever be true. Is it just a common misconception? Or are they thinking of the car in something other than monetary terms? I'm just curious.
Largely for the same reasons they and similar others want/need to say a house is an investment.
It feeds their ego enough to allow them to spend/commit well beyond the utility value.
They know empirically that a Buick will more than satisfy their needs... and a four year old Buick at that.
But they waaaaant that BMW soooooo much their gums bleed thinking about it.
From there it's just about playing with the numbers to support their bias.
Because there is a sucker born everyday and some buyers LOVE to hear things like, "you'd be an idiot if you don't buy it now at this LOW price. The sale ends today." A lot of salespeople will say whatever to get you to buy the item. A lot of people are educated in financial terms/matters. It's like when people ask me what my nationality is- I say American, they have this confused look on their face.
I would be more interested in the price of the car that the dealer is selling at comparable to the dealers around the same area for that particular model.
Location: East of Seattle since 1992, 615' Elevation, Zone 8b - originally from SF Bay Area
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Anything can be considered an investment if it is expected to increase in value. Our house cost $190k and is now worth $700k, a decent investment even with the taxes and maintenance. I have owned 3 classic cars and took a loss on both, considering what I paid and what I put into them. I agree, very few modern cars could be an investment, maybe a few super cars made in limited quantities, such as a McLaren F1. Some people are mixing up the words "investment" and "expense."
Many years ago, before automobiles, HORSES were an "investment" and asset, even though it could come up lame adn you'd have to shoot it to put it out of it's misery.
ALso, a vehicle IS an asset, and like any asset, MAY go up or down in value, but it provides value to your bottom line in the meantime, and gee, you get to go places comfortably.
In accounting there is a thing called "expensing the asset". Did you know if a company buys TP for it's restrooms, they have an asset, no matter how temporary or how much could be gotten out of it at fire sale or auctioning off assets when it goes bankrupt, out of business or closes. BUT: since TP doesn't last long, you immediately make it an expense, thusly "expensing the asset"...
You COULD think of a car that way. Expense the asset.
ANd so, since a car CAN be resold, usually as a loss, but it IS an investment. It DOES hold some value for a long time.
Another way to look at it is a CAR HAS VALUE, an INVESTMENT HAS VALUE. Heck, even my '06 Kia Sedona with 95K miles on it is still worth about $3500, so it is STILL an asset I own, as I could potentially get $3500 for it. If I keep it in good shape for another, oh 15 years, it will be a classic, and may, just may, bring me more than I paid for it when I bought it used, or as much as I bought for.
Don't worry over it, consider it an investment in an asset until you dispose of it.
ALso TP is cheap, and is used up and gone once used, a vehicle is NOT, so consider it an investment.
They are just using the word to mean 'something you're putting a lot of money into'. All cars are depreciating assets, but some depreciate more than others so you might feel that one of the kind that holds it's value better is a better 'investment'. (I feel that way).
I used to say it's an investment as in it was a large purchase when I was younger, but I was soon corrected by an old Russian lady at my work. So I know longer say it's an investment.
Why do people say a car is an investment? And I don't mean a classic car or something like that (they might be for all I know), I mean a day-to-day driver.
The reason I bring this up is because I've been car shopping. I finally figured out what I want, but both new and used, I need to save more money before I can buy the car I want. So I am just waiting and saving more. But while test driving a lot of the car salesmen talked about how the car was an investment. I told one (the car salesman I actually liked) that I "politely disagree" and that a car is an expense and maybe an asset, but not an investment. He just didn't agree and said, "no, it really is an investment" and I just dropped it there since I wasn't interested in arguing. I just wanted to learn more about the car I was considering.
I suppose that with car sales, it helps them to sell cars. But I also hear this from other people... mostly acquaintances to whom I mentioned I was car shopping. Where does this idea of a car being an investment come from? With investments you might lose money, but usually in time you gain money on stocks, bonds, and even real estate. But a car always loses money (usually a lot in the first 2-3 years). Just wondering where this outlook on cars comes from and if it can ever be true. Is it just a common misconception? Or are they thinking of the car in something other than monetary terms? I'm just curious.
It's a use of the term that comes from owner's manuals ("How to Protect Your Investment"). It is an attempt the manufacturer makes to make you unconsciously "feel good" about buying a car.
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