Spend savings on brand new car
worksmarter
Forumite 14 Posts
A friend of mine recently purchased a brand new car even though they told me they were very happy with their previous car. Although it was 8 years old, it had a very low mileage and nothing wrong with it
The only reason they traded it in for a new car was that their financial advisor told them it made sense to use some of their savings on a brand new car now, in order to beat inflation.
I am wondering if I should do the same? (my car is 6 years old with a very low mileage and nothing wrong with it)
The only reason they traded it in for a new car was that their financial advisor told them it made sense to use some of their savings on a brand new car now, in order to beat inflation.
I am wondering if I should do the same? (my car is 6 years old with a very low mileage and nothing wrong with it)
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If the demand of cars drop (due to people having less disposable cash etc) then it could mean better deals on cars etc. I must admit I have seen more garages local to me offering discounts and deals recently than in the past couple of years. This could mean more/better deals are on the way, possibly?
Personally I would keep the car you have and ensure I have the money in the best savings account possible but thats up to you
Will your money in the bank increase by 20%
Problem with chinese whispers is that key elements are missed... it could be the advisor suggested using savings -v- finance rather that saying a car is some form of investment vehicle
A financial advisor informed your friend to trade in a perfectly running, low mileage, 8 year old car and get a brand new vehicle (which depreciates several thousand within a week of sale) just to 'beat inflation', rather than leaving the money in a savings account, or investing it elsewhere so that he/she can actually make a return on the investment??
Does that sound right to you?? Because it sounds pretty silly to me unless I'm missing something here???
However new car prices had already gone up quite a lot before this bout of general inflation, due to chronic supply problems.
So with a recession looming, maybe they will not go up as much in the coming year.
If you are sitting on savings earning up to 5% and will spend the next 12 months waiting to buy a new car, which in the mean time could go up by 10%. Then sure buy it now.
However there is nothing to say that cars will definitely go up by 10%.
If you buy the car from a dealer then it will probably depreciate faster than inflation.
In recent times this has been turned on its head due to the car supply shortage. Some owners of new cars find they have actually gone up in value.
18 months ago I bought a 'nearly new' car . 3 months old with 100 miles on the clock. After a year I could have sold it for the same price with 8000 miles on the clock. It is not anything special either.
This situation will not last indefinitely of course.