I'll be the first to admit that driving my BMW makes me quite smug. Not for the fact that it is a BMW (which, ironically, stands for Better Man Wins) and I am thus better than the average person. No, that's not considered smug because it is a statistically proven fact.
My BMW makes me smug because it was a very smart buy. I picked up my excellent 2001 E39 M5, for just $9,000 with 129k mile. I'm wagering that the E39 M5 is currently in the depreciation trough.
The depreciation trough is a period of 2-3 years when a vehicle bottoms out in prices before creeping back up. Often associated with modern classics, the trough is the only time "investing in a vehicle" is uttered by people who don't sell those pyramid scheme energy drinks.
The depreciation trough is a phenomenon that only happens to a lucky few cars. Unfortunately, your 2001 Explorer which you picked up for $2,200 last year is not in the trough. Next year it'll be worth a new Blackberry or a six-pack of tallboys. If you're lucky, they'll be Blue Moon tallboys which isn't even a craft beer so stop acting like you have good taste.
To have what it takes to experience this phenomenon, a car must be:
- Somewhat Rare. The '01 Mustang GT is a damn good car, but every hairdresser is Winter Park, Florida has one. It doesn't need to be a unicorn, but if there's two or more in your apartment complex, you're on the wrong track.
- Desireable. The Suzuki Verona satisfies requirement 1, but don't re-mortgage your home to invest in Veronas anytime soon.
- Enthusiast Following: The Acura SLX technically satisfies both of those requirements, but there's no SLX owner's club clamoring for clean, used boxes and paying too much for said boxes.
That's not to say other cars won't bottom out in prices. It just may take them 30 years to do so. What other cars are currently in the trough?
(Yes, I understand Tavarish got his garbage troll M5 for less than half that price, but mine did not require Joan Rivers levels of cosmetic procedures to look presentable.)