The car that gets the most money out of a real-estate investment may not be the one you want to drive.
In fact, according to a new study, real estate investors are less likely to own a car that is more efficient than a standard two-door car.
“If you’re thinking of buying a used car, a lot of people are thinking of a BMW or a Mercedes,” says Chris Williams, managing director of equity analysis at the consultancy Capital Group.
That’s because, for most people, a two-wheeler is better for a variety of reasons.
For example, there’s the extra fuel it produces, the lower maintenance costs, and, for those who have a bit of money, the more luxurious interior.
But there’s also a cost of the car.
“There’s more than one reason why people want to buy a car,” says Williams.
The new study shows that while buying a car with fewer features is more likely to lead to a profit, the difference between buying a BMW and a Mercedes is still quite large.
So how do we know?
The researchers analysed the financials of 1,500 investors aged over 65 in the US.
They then used the data to estimate the cost of buying two cars that were similar in price and capacity.
When they compared the cost and efficiency of these two cars, they found that a Mercedes was about £8,000 cheaper than a BMW.
However, the cost difference was still very significant.
At £15,000 a car, the BMW was nearly £50,000 more efficient.
And the Mercedes was almost £30,000 less efficient.
How does this compare to other vehicles?
In the UK, the average two-wheeled vehicle cost £2,000 to buy and is around 3.5 times more efficient for each mile driven than a two wheeled vehicle.
According to the study, the median household income in the UK was £34,000, so if you’re looking to buy an old Ford Fiesta or Porsche Cayenne, then the price difference between a two and a three-door is even bigger.
You’ll find that a car is less efficient if you drive it on an open road, such as in a city or countryside, or if it has a lot more passengers, like in a hotel or a restaurant.
If you can afford to pay a bit more, it may be more cost effective to buy something with more features.
What does this mean for you?
If you think you might be tempted to buy one of these cars, think again.
The study found that buyers with money to spare are more likely than others to stick to their preferred choice, even if they know the other options aren’t as good.
There’s even a correlation between how much money a person spends on cars and how much they make in the stock market.
And if you are one of those people, you may want to rethink your decision.