Let's be honest
Buying a new car is usually an emotional decision that we dress up with logic. We tell ourselves we "need" a new car, but often we just want one. And that's fine! But it helps to be honest about what it really costs.
What to think about
The upfront stuff
- What the new car costs
- What you get for your old one
- Registration, taxes, fees
- Interest if you're financing
The ongoing stuff
- Insurance (usually higher for new cars)
- Road tax
- Maintenance
- Fuel or electricity
- How fast it loses value
The money you could have made instead
Here's one people forget: that money could be invested. Put €20,000 in an index fund at 7% for 5 years and you'd have €28,000. That's €8,000 you "lose" by buying instead.
The break-even question
How long until the new car's cheaper running costs make up for its higher price? The ownership calculator can work this out for your situation.
When a new car makes sense
1. Your current car keeps breaking down: Repairs add up, and so does the stress
2. Safety matters: New cars are much safer
3. Your life changed: Bigger family? Different commute?
4. You drive a lot: High mileage means bigger savings from an efficient car
When to stick with what you have
1. It's paid off: No payment is the best payment
2. You barely drive: Savings per mile don't help if you don't drive many miles
3. It still works fine: A well-maintained car can last a long time
4. You're feeling impulsive: Sleep on it
Run the numbers
Try your situation in the calculator. The results might surprise you. Sometimes keeping the old car wins. Sometimes switching makes sense.
It's not just about money
Cars are about more than spreadsheets. Safety, comfort, what you enjoy, environmental impact. Use the financial stuff as one piece of the puzzle, not the whole thing.