Supply and Demand in the Sports Car Market and How to Take Advantage of it (in my region at least)
Recently I have been procrastinating homework by searching the online postings for used cars and now writing blog posts. I recently stumbled across a 1997 Ford Mustang with the V8 for $2,000. Being a broke college kid I knew this was just dumb daydreaming but I couldn’t help but consider a way that I could possibly buy the car and make some money in the process.
In order to understand my idea, you need a little background about the area I live in. I live in Wisconsin, USA where we experience very harsh winters. Driving any sort of sports car in the winter isn’t really an option. The result is that almost all sports cars get stored over winter and either a beater or truck is driven in it’s place. This causes seasonal shifts in supply and demand for the sports car market in my area.
During the winter months, it is a buyers market for sports cars. Many people are trying to sell their Miatas in order to either avoid paying to store it over winter or to afford a vehicle with AWD. This causes prices to be lower in the fall because of the influx of supply in the market. Meanwhile demand is low because no one wants to buy a fun car just to store it for the winter. When winter ends and spring begins, the demand for sports cars increases dramatically. However, the supply has either decreased or remained constant. This causes prices in the spring overall to be higher than average.
OK, that’s all the time we have for Econ 101 today, we will now be moving onto Finance 103: Introduction to Investments. Investing is all about buying low and selling high. If I had the capital to afford this car, I would confirm I would have a low cost place to store it and then purchase it. I would just store it for the winter and when spring rolls around, I would pay for the registration and insurance for a month and drive it for a few weeks to ensure everything operated properly. After that I would list it for about double of what I would have paid for it. By the time negotiating was over, I would still end up with a solid profit even after my other expenses were factored out.
So what do you think of my crazy scheme that I came up with while procrastinating homework? Let me know how you liked this post and the overall concept.