5 automobiles that may just be good investments, according to Personal Finance Cheat Sheet.
The Census Bureau estimates that close to 12 million new cars were purchased during the most recently reported year. During a search for a new automobile, appearance of the vehicle, features, and mileage are often characteristics that impact a decision whether or not to buy. A measure that is often overlooked, however, is depreciation.
An automobile purchase is a sizable one. An Interest.com publication says consumers should spend around 10 percent of their monthly income on a car payment. Oftentimes, the one purchase consumers acquire that is more substantial than an automobile is a home, which is an asset that can earn equity for the consumer. With a depreciating asset being a consumer’s second largest purchase, it’s only fitting to search for a vehicle that will offer the greatest value long-term.
Depreciation is based on the vehicle’s future resale value. The lesser the percentage decline in the car’s worth over a time period, like three or five years, the better the value. You’re likely not going to earn a positive return on a car, so a reliable and economical car with low depreciation is thought to be a solid investment.