A lot of people will tell you a new car is important in retirement, but is it really? Let’s have a look at some good reasons to buy a new car, and one big reason not to.

You deserve a reward

If you can see yourself darting about in a shiny new car when you retire, great! New cars can offer a sense of achievement after a lifetime of working, so if you feel like rewarding yourself, and you can afford it, then it could be a great addition to your lifestyle.

It will enhance your lifestyle

Depending on your plans for the future a new car might expand your options. Perhaps you see yourself looking after the grandkids more regularly and helping out with the school run, so a car with more seats is required. Or your future might entail caravanning around Australia so you need a car that can handle heavy loads. Whatever the scenario, if your current car is not up to the job then a new car might just give you a better lifestyle.

You need something dependable

Perhaps you’ve been holding on to your current car for a while and it’s started to let you down, it’s out of warranty or the mechanic has become your best friend with the amount of times you visit. In this case a new car could offer you the peace of mind you need for your retirement years. Afterall, no one wants to break down when it’s raining and you’ve managed to forget your mobile phone.  

You want the latest safety systems

Let’s face it, the older you get the more your sight, reflexes and mobility is likely to deteriorate. You may still feel like a million bucks, but in an emergency situation the newest technology might provide the fraction of a second you need to stay safe. A new car might just give you more driving confidence and all those extra features that make being on the road a dream run.

What’s the big reason not to buy a new car?

One word, depreciation. On average, a new car will lose 25-30% of its value in the first 12 months. In the first three years, it's 50-60%* .

When you're on a fixed income in retirement, that money might be better spent elsewhere. A better option could be a late model used car, in good condition, where the majority of depreciation has fallen on the previous owner. This option could save you thousands and still see you driving around a shiny new-ish car that meets your retirement needs.

Need some help?

If you want to talk about planning your retirement but don’t know where to start, give us a call on 1300 033 166 or request a call back online. 

You can get general and simple advice about your TelstraSuper account for no additional cost – it’s part of your membership and we can speak to you about how to boost your super, your insurance and your investment options.

 

If you want more personal advice make an appointment with Telstra Super Financial Planning . Talking to a professional about money – your income, your savings, your debt, potential for investment and creating wealth outside of super – could help you get a feel for whether you’re on the right track or unknowingly making big mistakes with your hard earned savings. 

*https://www.carsguide.com.au/car-advice/how-to-choose-the-right-car-for-retirement-41211