(Vroooom. I am expensive and shiny.)
I want to be clear and upfront about something right now: I am not here to judge. If it was easy to make our money work for us and be sensible with it then we might all be bloody millionaires by now. I don’t know about you, but that definitely hasn’t happened for me yet.
So chances are we’ve all made financial errors along the way and some silly money mistakes too. Sound familiar? Yeah, me too.
So – no judgement here.
But there is one financial decision that thousands of people make every day that I just don’t get it.
Why, tell me WHY, do people ever buy brand new cars?
I mean, really? I can’t think of any other situation where you would happily hand over anywhere between £10,000 to £50,000 (or more) of your hard earned money (after tax!) and gain an asset that is IMMEDIATELY worth approx 10-20% less the moment you get it, 40% less after the first year and 60% less after three years! Seriously – WTF?!
You have just overpaid by thousands of pounds and you will never ever see that money again. You have gained nothing for the benefit of those lost thousands. The moment you sign the papers and are handed the keys, that brand new car is no longer brand new. It’s worth a whole ton less and will continue to lose value far quicker than a second hand car would.
I just don’t get it. It seems to me to be the most baffling thing that anyone could choose to do with their cash, regardless of how much money they have.
But even more mind-boggling is the fact that people are buying new cars on finance because they don’t actually have the money to afford the full amount. This is even more strange to me – why, oh why, are you buying an asset you can’t afford, and losing thousands of pounds in the process?
On what planet does that make sense?
So yes, as I said, no judgement here. We’ve all done silly things. But this financial decision seems to me easily one of the worst you can make. If you want to throw away thousands of pounds for the sheer hell of it, just send it to me instead. I promise to do better things with it than the car salesman you were going to give it to.
On the other hand, I’m nothing if not open minded, so please – if you can explain this one to me in any way that makes sense, I’m all ears.