New luxury cars may seem like an exciting idea, and many people write off the initial cost as a single loss that will leave them with a wonderful car that will make them happy for years. However, most people forget about the recurring costs of purchasing an expensive new car that will quickly lose its newness and become just another car.
Very few people have the ready cash to purchase a brand new luxury car, so if you want to purchase one, you’ll probably need to get a loan and make monthly payments. Unfortunately, car loans have notoriously high interest rates, and even a low interest rate will eat up your cash simply so you can have a car that you can’t actually afford.
Having a nicer and more expensive car means higher insurance costs, both because of basic premiums and because you’ll probably want to be more highly insured in case something goes wrong than you would if you had an inexpensive car. Those higher costs will come out of your monthly income for as long as you own the car, constantly soaking up money you could be using for other things. Between interest and insurance costs, the monthly added expense is much higher than you might at first realize.
Loss of Value
The moment you drive a car off the lot, it loses a large portion of its valued. That means that if you spent $40,000 on a new luxury car, the moment you take it off the lost it’s only worth around half that, making it a net loss and, if you have a loan, puts you immediately underwater. A used car that’s already past the sales lot premium price will keep its value for much longer, meaning if you want or have to sell your car any time after you purchase it you’ll be able to recoup most of your initial costs.
Luxury cars often require special gas, special oil, and all sorts of added expenses that are much more than a simpler car, and if something goes wrong, it’ll be much pricier to fix. A more basic car will be cheaper to run every year, and will get you where you need to go just the same.
It Doesn’t Make You Happier
After a few months, your brand new expensive car will just be another car to you. Humans get used to their situations very quickly, meaning that if you have a luxury every day, it’s no longer a luxury and becomes the norm, and you revert to being just as happy as you were before. Cars are meant to get you from place to place, and as long as your car does that, the added extras and looks just aren’t worth the expense.
Nearly everybody needs a car, but nobody needs an expensive new luxury car that eats up your earnings year after year. Instead of purchasing a car that is simply a status symbol, get something comfortable and reliable that will do its job year after year without the added costs that come with an overly expensive car. Save that money and put it towards your retirement or your family, the areas that extra cash can do the most good.