Investing in a car is an exciting prospect, but predicting when they’ll go up in value can be tricky. There are some car models that are more likely to increase in value than others. Look for cars that have been critically acclaimed, are not mass produced, or are currently undervalued. Some of these vehicles may already have classic status, but they could be on their way there in 10 to 20 years.
One such example is the BMW 740i. This low-budget supercar first debuted in 1999 and was head-turning when it hit the road. It had a 7,000-rpm redline, and was immediately sought after by collectors. The demand for these cars surpassed their initial production, resulting in a massive rise in their price. Its popularity led to the production of a number of other high-performance cars, including the Ferrari California, Porsche 918 Spyder, and the NSX.
Another factor that will influence car prices is the shortage of microchips. This will ease as the year draws to a close. Meanwhile, a global pandemic or war in Ukraine could cause car prices to increase even more. As long as the shortage of microchips does not ease, analysts expect used car prices to continue to rise in value. Although this could be a double-edged sword, it’s still worth considering.
As the war in Ukraine continues to escalate, the number of vehicles on the market is already dropping. Volkswagen, BMW, and Porsche rely heavily on Ukraine for wiring harnesses. Because of the shortage, they will most likely limit their exports to the U.S., which will increase their prices. Nevertheless, the market will likely continue to improve this year. But if the shortage does not end soon, the demand for used cars is still very high.
Some of the most popular vehicles are Land Rover Defenders from the 1983-1997 period, which were sold in millions but are now rare in the United States. Land Rover Defender insurance quotes jumped 55% in 2021, and Hagerty predicts that these vehicles will continue to increase. For those who prefer electric cars, a 2012-2011 Tesla Roadster could be worth double as much as a model in condition two.
While these price increases are largely the result of higher gas prices and lower labor costs, the markups that dealers charge their customers aren’t the only culprit. According to IHS Markit’s Stephanie Brinley, the car industry is suffering from a pandemic that has hit the industry. Supply chain issues and semiconductor shortages have caused significant setbacks in production. Prices have gone up, too, because manufacturers need to spend more money to produce them. But without sufficient demand, the higher prices won’t be sustainable.
A prolonged inventory crunch has turned the used car market upside down. Many previously depreciated cars are now worth more than their original cost. The prolonged shortage has forced many dealers to go out of business, which has left the market with a lack of new cars. As a result, many buyers are forced to look at used cars as the only option. These prices are likely to stay high for the rest of the year.