The biggest material purchase that a typical person makes is their home, of which, homes have historically risen in value over just about any extended period of time. That is to say, for most people, homes are not only necessary as a place to reside in, but also serves the practical purpose of being an important asset, as well as typically being a good investment. The second biggest purchase that most everyone makes, is their vehicle. The thing about vehicles, is that as time goes on, virtually every single vehicle on the road, will depreciate in value – that is to say, the older that the car gets, the more miles that are put on the car, the less that it is valued, and there are virtually no exceptions to this rule. Additionally, the very first hint that vehicles should not be considered to be an investment, comes at the very beginning, when a given person is making their new car purchase, in which, when they go to insure such, they are often offered “Gap Insurance,” which is the type of insurance that will take care of making good on any “gap” in regards to funds so owed, should that vehicle be totaled in an accident or stolen, in which what that insurance policy is thus covering is the difference between what is still owed to the lender of record, for that vehicle, while taking into fair account, the vehicle’s actual depreciated cash value. In other words, most cars, when bought new with a relatively low down payment, are actually considered to be worth less by insurance companies than the monies still owed for that vehicle.
The other thing that needs to be seared into our brains, is that an investment, by definition, is something that over a reasonable period of time, gains value; of which, vehicles, are the exact opposite of this, because time and mileage is not the friend of vehicles, whatsoever; which is why used vehicles always cost less than new vehicles of the same type and hence why cars should never be seen as an investment. The best way to look upon vehicles is to see them for what they are really are; which is a form of personal transportation, and of which, most owners of vehicles understand that despite however good they are in maintaining their vehicle and whatnot, that eventually the vehicle will reach that stage in which it no longer has good utilitarian value.
So then, when it comes to vehicles, its best to see them as an ongoing expense, that will not ever go away, unless the driver of such, simply stops driving. This thus signifies, that when people research and buy cars, that they probably should keep foremost in their mind, that whatever excitement that they may feel in owning their own vehicle, should be tempered by the fact that, the cars’ value will depreciate from day one, and will continue to depreciate until it is disposed of. This would seem to indicate that those that are most savvy, are the type that fundamentally know that cars are never an investment, and thus will make their purchasing decision of such consistent with that important knowledge.