Are we putting too much of our hard-earned into the cars of our dreams? New research by AA Cars reveals as many as a third of car buyers have found themselves in financial strife after buying a car outright.
Half of that one-third had to take a dip into savings or money put aside for other things, while a third said they were left entirely without a cushion of cash. Talk about blowing your savings… Furthermore, a third said they actively cut back on expenditures such as gym memberships and nights out. A quarter even said their purchase meant sacrificing holidays.
Who is most likely to fall victim to whimsical spending? Why, it’s millennials (18-44-year-olds) of course.
Indeed, many young used car buyers said they regretted purchasing a car outright, and that doing so had led to financial issues down the line. This despite most being aware of the many financing options available.
As many as 48 percent of 18-24-year-old car buyers, 50 percent of 25-34 year-olds and 50 percent of 55-64 year-olds said they ran into trouble after buying a used car.
“Buying a car, whether used or new, is a big financial commitment,” said James Fairclough, CEO of AA Cars.
“Buying a car outright can be a great option for many, but you should be careful not to dedicate all your savings to one single purchase and potentially leave yourself short further down the line”.
“Before taking the leap and dipping into your hard-earned savings to buy your next car, it’s worth thinking about saving up more funds or shopping around to see if there are better-suited car finance deals to be had first.”
You will save money overall if you buy a car outright rather than finance it. It’s a simple matter of calculating interest – but regardless of how you buy a car, budgets have to be calculated carefully. What’s in the bank and what you can afford to spend should always be considered two very different things.