Buying a car is one of the biggest purchases an individual will ever make. Before buying a car, you need to know its value. Most cars depreciate as years go by after purchase compared to a piece of land or a home that will appreciate as years go by. This is what we may consider as an investment. Buying a car because of your job may not necessarily be considered an investment because it has no returns. However, if you are buying a car for commercial use such as for a taxi service; it automatically becomes an investment.
Before you invest in a car of before you purchase one, you need to analyze the value of the car. Putting your money in something that has less value is an automatic loss.
To avoid incurring a loss when investing in a car, the following are some of the reminders that you need to check before any transaction.
- Written contract
- Car’s condition
Knowing the value of cars before selling it or before buying it will enable you to have a clear perspective on how to go about either purchasing it or buying it. Since a car’s value depreciates from the day of its purchase, it may not be sold for the same price it was bought.
Look out for any potential modifications
When you are buying a car whether new, slightly used or second hand, remember that it is your money that you’re putting in it. You need to feel comfortable in your new car. Therefore, check if there could be any modifications to be made on the car before any transaction. For example, you may need to upgrade the car for comfort especially for very tall individuals; they may need to modify the car seats to suit their height and ensure they get the comfort they deserve while driving.
The car’s insurance value
If you are buying a slightly used car or a second-hand car, you need to check the car’s insurance value. This is very useful during price negotiations. Another important thing is to transfer the seller’s car insurance policy in your name or simply buy a new policy. This is however different when purchasing a new car as the car normally comes without insurance. It is upon the buyer to get a new policy the moment they buy the car.
When buying a car, there should be legal documents as proof of ownership. In case you get carjacked or robbed, you have a claim over your car when it is found. The documents will also enable you to know when the car was bought therefore determining its price value becomes even easier. Therefore, to avoid getting yourself duped always confirm from the relevant authorities that the documents that you have are original.
Whenever you are buying a car or investing in one, its condition should be one of the factors to be considered before pricing.
In conclusion, before you invest in a car, you also need to be conscious of the amount of money that you will use in maintaining it. Buying a car as for be as expensive as maintaining it. Therefore, if it is not for commercial use, just get a car that you can easily maintain without straining your budget.