Cars are a liability and always will be
Thursday, 07 January 2010 12:38

There is much concern that motor manufacturers are going to have a hard time in 2010 as various government scrappage schemes come to an end.

Before we go out lavishing our savings on a new car there's some hard thinking that needs to be done.

A car is not an investment, it's a bottomless pit that will cost money to purchase and will never give anything back. There are people who don't hold that view - the car lovers, people who say they need a car for work etc etc. The truth is that people like cars and are willing to spend lots of money on them. We should not confuse that with 'need' there are in fact few of us that need a car, we just like them.

Remember too that as soon as you drive that new vehicle off the forecourt it's lost about 25% of it's value, and within a couple of years it's worth about 50 to 60% of what you paid. An example is the 11 month old car (Peugeot 206) that was bought from a dealer and just 24 months later that same dealer offered exactly half the purchase price in part-exchange against a new car. The cost of depreciation for that car was exactly 100 pounds a week over the period. Add to that the cost of servicing, tax, insurance etc and that car is an extravagant luxury.

Think very hard before you buy, do you really need a car? If you do, how much do you really need to spend?

Chances are that a reasonably priced used car is what you need, and there are plenty of them about. Don't be in a hurry to part with money, don't limit yourself to a particular model or colour and out there will be a real bargain that will give you cheap motoring for years to come.



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