Turn Your Car Into a Financial Asset
A car is something that most of us need - be it to commute to work, enjoy road trips with family, or just for the pleasure and convenience of driving. However, a car can be either an asset or a liability, especially if not properly managed or not leveraged to its full potential. Fortunately, there are many ways to increase the value of your car and make it work harder towards your financial goals.
In this quick-start guide, we’ll look at a few strategies to leverage your car to build an additional income stream, boost your finances, and ultimately, turn a cost into an asset. Let’s dive in.
Buy and Sell Your Car at the Right Time
Did you know that a new car will use 20% of its value within its first year on the road? Depreciation is a key concept to understand when buying or selling a car - and it can be the main liability associated with a vehicle. However, you can also use this concept to your advantage by learning to buy and sell your vehicle at the right time.
For instance, you may consider purchasing a second-hand car within its second or third year on the road. The car will be practically new, but it would have already depreciated. This means that you can purchase it for a lower price and avoid the steep losses associated with the first-year value dip.
Rent Out Your Car When You’re Not Using It
If you don’t need your car on a daily basis and it is often stored away in your garage, you may consider renting it. This can generate income and put your asset to use. However, it is essential that you gain comprehensive insurance coverage targeted specifically to protect rental cars and the drivers. So, before opting for this alternative, be sure to work with a specialised insurance provider.
Sign Up for a Rideshare or Delivery Service
In the sharing economy, there are many ways that allow you to make some extra money off your car without having to rent it out for days or months at a time. For instance, if you have been looking for a side gig to build additional income, you may consider signing up for rideshare or delivery services. These may not be able to substitute your main salary but they have some obvious benefits: they are in-demand, flexible, and allow you to earn when you want. Be sure to compare different companies and offer packages before signing up!
Advertise With Car Wraps
Advertisement is key, and not just in the digital world. Business owners understand this, especially if their target market is local. So, you may consider offering your car for local advertisement, especially if you often drive in a certain area. When choosing a business to work with, consider someone who is local and trustworthy, understand their advertisement needs, and set out a clear contract. You may also choose a business that aligns with your own values to feel more comfortable about what you are advertising!
Upgrade Your Car With Performance Parts
If you own a car, you can increase its value with quality performance car parts. These can increase acceleration - but also improve mileage and reduce carbon emissions. Be sure to partner with an expert who understands your car’s needs and can provide you with the best solution to increase the market value of your vehicle. Keep in mind that a lot will depend on the type of car, your driving habits, and local regulations.
Consider Investing in a Classic or Antique Car
If you have a capital ready to invest and you understand classic cars - or you are ready to learn more about this topic - purchasing an antique vehicle can be an investment to consider. However, keep in mind that this type of investment comes with some risks that should not be overlooked. For instance, it can be difficult to foresee how the market will develop and what the future value of your car will be. Ideally, you’ll want to partner with a specialist and only invest what you are prepared to lose. You may also use your vintage or classic car to build different income streams by lending it to fairs or exhibitions or entering it in can shows and events. Don’t wait to sell it to reel in profit and learn the basics of caring for it!
Negotiate When Buying or Selling Your Car
Whether you are buying a new or used car, or when you are ready to sell your vehicle, be sure to put in place all of the best practices to ensure that the transaction takes place at fair value. Some golden rules include:
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Research the car’s value online
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Set your highest or lowest price
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Be polite but stand firm
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Be ready to walk away
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Mention issues to lower the price (when buying)
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Show service records or upgrades (when selling)
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Negotiate after inspection or test drive
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Don’t reveal your full budget or urgency
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Be open to compromise
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Get agreements in writing
Keep Up With Regular Maintenance
One of the best ways to increase your savings on your car is to keep up with regular maintenance. This safeguards the value of the car and increases safety on the road. Plus, it may help improve mileage and ensure that all systems work correctly, reducing the risks of costlier breakdowns down the line and preventing you from having to get a replacement vehicle.
If you are unsure how to take the best care of your car, be sure to partner with an expert mechanic who you can trust and keep up with yearly maintenance checks!
Trade in for Value
Last but not least, consider finding ways to reduce your expenses when buying your next car. While upgrading your vehicle is something that will happen regularly throughout your car, you can lower and optimize this expense by trading in your current car at the right time and in the best conditions. Be sure to work with an expert dealer who will protect your interests, choose a new car that won’t weigh heavily on your finances, and enjoy the new driving experience!
