If you have a car, you have an asset that could help generate revenue for as long as you own it. This could be true regardless of how old your vehicle is or how many miles are on it. Let’s take a look at the specific ways that a vehicle could be a money maker.
Image Source: Flickr
Use It to Secure a Loan
A vehicle title loan uses the car’s title as collateral for loans that are worth a significant percentage of the its market value. For example, if you have a vehicle worth $10,000, you could get a loan for up to that amount minus lender fees. Typically, lenders will provide you with anywhere from 50 to 80 percent of your vehicle’s value. This means a $10,000 car could be used to secure a loan of up to $8,000.
Cars Can Appreciate in Value
Typically, vehicles depreciate in value, and they can lose up to a quarter of their worth as soon as they are driven off a dealer’s lot. However, there are some vehicles that will actually become more valuable the older that they get. This can happen if a car or truck is considered to be vintage or is desired by collectors. In many cases, collectors desire vehicles that were popular in their childhood or were popular when their parents or grandparents were children.
Save Money By Eliminating Your Car Payment
Usually, you will spend five or six years paying off a car loan. If the car lasts for longer than your loan period, you now have hundreds of dollars per month that can be put into a bank or brokerage account. Generally speaking, this money will grow at a rate faster than inflation, which means that you are truly growing your wealth over time.
Use Your Car for Ridesharing or Similar Purposes
Your vehicle could be used to work for a ridesharing company to help you make money in your spare time. It could also be used to deliver food for a local restaurant or pizza shop. Depending on where you live, it may also be possible to rent your vehicle to those who need it for an hour or two to run errands or attend a business meeting. If you are going to use your vehicle for business, make sure that your insurance company knows this. It may also be worthwhile to increase your coverage limits and reduce your deductible to be better prepared in case of an accident.
While conventional wisdom says that vehicles are not good investments, this is not always the case. It depends on how the car is used as well as the type of car that is purchased. Furthermore, cars that have not been in accidents or experienced any water damage are likely to hang onto their resale value or appreciate over time. Those who are looking to purchase a car as an investment should also know that car values depend on both local and national used or vintage car market conditions.