Last Updated on July 24, 2022 by The MediFi Guy
A car is not an asset. Assets make money. A car is a liability. Liabilities lose money. A car loses money in the form of the initial depreciation hit, ongoing depreciation, and ongoing expenses in the form of petrol costs, parking costs, insurance costs, cleaning, maintenance, and repairs. The more expensive the car, the more expensive these costs. If you add debt on top of that you’re adding the expense of debt slavery (interest) as well.
It costs more to insure a new car than an older car because it costs more for the insurance company to pay the full replacement costs of the car.
It costs more to repair and maintain a new car because you have to take it to a certified repairer/dealership, whereas older cars tend to have a broader aftermarket repair network in place which uses cheaper parts. Also, you tend to feel the need to repair older cars less. One of the best features of second hands is that they come pre-dented, hence less of an urge to fix every tiny new dent you may get.
It costs more to clean a new car because if you got a new car in the first place you’ll want to spend money on car washes to keep it clean and impress your friends. You won’t care as much about keeping your second-hand clean hence less spent on cleaning 🙂
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