When talking about cars, there are many that say they are an investment. This does make sense due to many different reasons. However, the fact of the matter is not as simple as many think. You cannot just buy a random car and expect a very good ROI. In fact, with vehicles, they lose value really fast because of depreciation.
In order to properly understand the topic, we have to first understand what a commodity actually is.
What Is a Commodity?
To make things as simple as possible, a commodity is officially defined as being a primary agricultural product or material that can be sold and bought, like coffee or copper. Another very common definition is simply a thing that is valuable or useful. When we take into account the second definition, we can say that everything we buy can be seen as a commodity if it is valuable or useful, which is definitely the case with cars.
We can easily treat cars as a commodity. We take care of them and want to keep their value as high as possible for the longest possible time frame. We add extras like Olive’s Honda extended warranty online solutions and we make sure the oil is changed on time, along with many other tasks. However, no matter what we do, getting a very good ROI is very complicated.
The Problem with Car ROI
Just take a look at a car depreciation calculator online. You will quickly see that right after a vehicle was bought for the first time, it loses value. In order to get a good return on the investment made, in theory, the value of the asset has to increase. This is not the case when you buy a vehicle. However, the key here is all about what you see value as being.
As you can see, the big problem with car ROI is that if we look at value, it is close to impossible to get a high return on the investment made. However, if we are to look at other aspects, any vehicle can become a great investment. At the end of the day, everything boils to what the car will be used for.
As a very simple example, when you buy a car that you will use for business transportation or as a taxi, it ends up paying itself off. Basically, whenever your vehicle produces income or is useful for you, we can start talking about a return on investment.
Conclusions
To sum up, cars can be considered a commodity when you use them in order to generate some sort of income such as through vehicle advertising. It is also the case when you just look at the vehicle as being valuable for you. Just think about the older sports cars that are nowadays seen as being collector items. They ended up being much more expensive than when they were initially sold. This is because of the perceived value of objects, which practically means that if someone is willing to pay more for an item than the actual value, it becomes more valuable.
