Sales of sports cars have gone down in the last few years, most likely because of the economic crisis. However, the revenue of the sports car market in the United States is expected to hit over $20m in 2022. If ever there was a time to invest in a luxury car, now would be it. But how does financing your dream car work and what can you do to ensure you get the wheels you want?
Luxury Car Finance Options
It’s no secret that luxury cars are one of the most expensive assets that any individual could possibly invest in. Fortunately, there are a few ways in which to finance a car that’s not quite your average sedan or SUV. The first is what is known as a hire-purchase, whereby the buyer will pay equal monthly installments, for a set period, whereafter the buyer will become the owner.
The next is a lease-purchase, and this is where the buyer pays low-cost monthly installments, for a set period, and then pays a ‘balloon’ sum at the end of the term to complete the purchase. Another way to finance your dream car is to engage in an equity release. This refers to the process of unlocking cash tied up in your already owned cars to fund the purchase of a new car. These are three of the most popular ways in which to purchase an expensive car, but they are by no means the only ones.
Why Do You Need Finance?
You may be thinking at this point what makes a luxury car so expensive that a full financial plan is necessary to fund the purchase. The answer is simple, in most cases, it’s the catalytic converter. Cars with the most expensive catalytic converters such as Ferrari F430 and the Lamborghini Aventador both have catalytic converters that cost close to $10 000. Many people have entire garages full of cars that cost less than that.
A catalytic converter is what converts power from the engine to smoke from the exhaust system, using petrol. The growth of the electric car market is threatening the conventional road vehicle market, as features like the catalytic converter are becoming redundant, and this is driving up their cost even further.
Consider The Running Costs
The cost of supercars and sports cars doesn’t just end with the purchase, the maintenance and service requirements are expensive too. For example, the average Mercedes costs $908 a year to maintain. However, this is something that you need to consider when securing financing. Many luxury cars include a service plan in their costs, so be sure to look for this as it could be the difference between keeping your car on the road rather than in the shop.
Live The Dream
Financing your dream car is not going to be an easy task. But with proper planning and financial advice, it is more than likely that the dream can be achieved. Life is short, and if you want to spend your time driving a car you enjoy, you should take the necessary steps to ensure that’s what you do.