Saturday , February 27 2021

Buying a new car is the worst financial decision



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After one year, the car is worth 20-30 percent less, says Bach

This American writer, entrepreneur and motivational speaker, known for the best seller of "Auto Millions", thinks that buying a new car is "the financially worst decision we can make."

When you take your new car from the sales showroom, it has already lost a significant portion of its original value – explains BH for CNBC.

For a year, your car is worth 20-30 percent less than the initial price, and in five years, the drop in value is 60 percent or more.

David Bach feels that the worst is that most people borrow money (take credit) to afford a new car.

Why would you borrow money to get some assets that would nearly lose up to 30 percent of their value almost immediately?

Buyers who want to buy a new car Bah, therefore, recommend that they choose a leasing vehicle at the age of 2-3 years. In his opinion, such a car is "almost the same" and you can buy it at a price that is 30 percent lower. David Bach also advises clients to calculate their annual costs before purchasing a new car.

Do not just focus on monthly repayment costs (if you are buying a loan), but see how much car costs on an annual basis, including insurance, fuel costs, routine maintenance, and so on.

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Bah further states that the calculated amount that the owner must allocate for his vehicle for one year is compared to his monthly income and he is wondering if he really needs a car that costs so much annually or can be something cheaper, maybe a little older, but who is still in good shape?

Despite all the arguments David Bach has made, many buyers (especially in high standards) choose to buy a new vehicle, which in the end is good news for those who follow the logic of this financial guru and buy the same cars after 2 -3 years as a preserved half.

You can comment on this topic in your comments. Would you prefer, if possible, to buy a new car or a younger half, which will bring you significant savings when buying a vehicle?


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