Everybody knows that cars instantly depreciate the minute they turn a wheel off the forecourt. Most common vehicles are depreciating assets which deteriorate in value with each mile they are used. However, this is not the full story. While depreciation dominates the narrative, a lesser-known truth still exists. That is, some vehicle and automotive assets not only hold their value but also appreciate significantly with the passing years. Understanding this hidden world will radically alter your views on your next purchase.
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The Rise Of the Modern Classic
Not all cars fall into the depreciation circle. In fact, some increase steeply in value. The classic car is the obvious example, but the definition of a classic car is changing. The 1980’s,1990’s and early 2000’s cars are the icons of the future.
Take, for example, vehicles such as the BMW E30 M3 or the Mk1 Volkswagen Golf GTI, which were quite affordable back in the day, but fetch staggering prices at auctions today. The same can be said of the limited-run Japanese sports cars, such as the Mazda RX-7 FD or Nissan Skyline GT-R. Their rarity, engineering prowess and cultural significance make them rise in desirability and subsequently also in value.
Special Edition and Hidden Gold
Also, beyond full-blown classics, special editions or uncommon configurations have become very sought after by collectors. Certain variants of the Porsche 911 have been selling for more used than they sold for brand new, because of their scarcity and purity of the driving experience.
And the Heritage edition of the Ford Focus RS or the Vauxhall VX220 Turbo in one or two colour options are being appreciated, as collectors are buying them up. Certain unique option packages, manual gearboxes, unusual factory paints, or lightweight configuration, can create a valuation edge.
The message? The normal model depreciates. The special one does not.
The Value of the Unseen
Surprisingly it is not only the motor care that can appreciate in value. Non-mechanical attributes relating to the vehicle can appreciate in value quietly, too. Private number plates are one of these in the much over-looked investment class. A good choice of registration plate can appreciate independently of the car it sits on, providing you an opportunity for personalisation and financial benefit.
Some plates appreciate in the way that fine art will, while desirable formats can fetch up to 6-figure sums in some cases. The short dateless plates, sad to say, are always in great demand, especially if they are made of initials of a well-known name. The secret is to buy from a reputable source and ensure that the purchase has a timeless appeal. If purchased, the private number plate can be passed from car to car or held like a traditional asset.
What All This Means to Purchasers
If you are in the market for a vehicle, it is more important than ever to consider the future value implications. Go for low-production run models, clean examples, or enthusiast favourites. See what unusual factory options are available. Check auction results. And do not overlook apparently unimportant asset classes, such as private plates or original documentation. The right vehicle has become such an important investment feature that it is not only to be considered in terms of passion or speed, but with a bit of reasoning and with great timing they are capable of becoming a sensible investment or asset. While most cares lose value over time, the ones that don’t can reward those who knew what to look for.
So, yes, depreciation plays a big role but the whole truth is more nuanced, and for those paying attention, far more promising.