Just to add to the pent up post-GFC demand, (and pools of cash sitting on the investment sidelines), it seems there are currently zero% finance offers on every second station break if you haven’t got the financial means. Also, adding to the breathing space created by a return to near historical lows for local home mortgage rates is the new generation of Uni graduates who didn’t experience their spending habits being seriously curtailed by the last 5 years of market turmoil.
So what are the off-the-cuff favourites rationalising that 5-6 months of super short term buzz from out doing your family and friends? Well that often depends on your age, perspective or chosen method of employment. See if you recognise any of the following….
1. I deserve it!
Wow, big call, what sort of masochistic tendencies would lead you to deliberately crucify around 20% of your spend in the first 12 months? On an average vehicle buy that means $4-8,000 never to be seen again, and that’s just in the first year!
2. My current car is getting a bit old and I’m worried about maintenance costs!
Well that may depend on whether it has been looked after along the journey, but if you were to keep it, I doubt repairs are going to mount to anything like the above depreciation, annually!
3. There is a clearance sale!
Refer above, they ain’t going to flog cars at a loss, you’ll pay what anyone else will when you buy it, ie market value.
And, that business owner’s favourite…
4. I need the tax deduction! Hear’s a news flash, there are one or 2 other ways to save tax without the capital loss. Try explaining this one to your Accountant, and if they agree with you? Get a new Accountant.
Some simple principals to keep hold of your cash/ home deposit/cashflow for what really matters for the long term:
- Buy what you need, not what you want, and certainly not what will impress your neighbours;
- Let some other goose blow their capital on at least the first 2 or 3 years worth of depreciation (if not 5 or 10 years worth for big name brands) and get a road check done;
- Don’t even think about spending more than 50% of what you’re earning a year on a car, preferably a lot less;
- When those ads are on the channel you’re listening to, change the channel.
and, my favourite,
5. Consider focusing on owing the garage, before the new car, because with the costs over the first 5 years, you may just have been able to build one!
Happy to discuss.
Cheers, and if you know of a family member or friend we can assist, please don’t hesitate to share with them.
Dave Dyson
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