The cost of financing cars

A thread on what this is costing

Its a lot more than the monthly finance costs, and it might be a huge reason why you retirement will be delated for years, read on

Lets say you are couple paying £600pm for 2 cars and you intend to do this throughout your working and retirement lives

If you were 30 now and wanted to retire at 60

You might need £180,000 (inflation adjusted) at 60 just to cover this ongoing finance assuming 4% withdrawal

So that means you need to invest £324pm for 30 years to hit the £180,000, assuming 6%pa growth and 3%pa inflation

a whopping 50%+ more on top of your £600pm!

Those cars really are costing you £924pm in finance if you want to keep it up throughout retirement as well!

Maybe you can afford to pay that extra money, but have you looked at every area of your lifestyle?

Are you investing to ensure they are covered?

Most people don't want to reduce their lifestyle in retirement, if anything now they have more free time they want a better one!

Instead keep the cost of financing / owning two cars to £300pm?

Maybe you buy 2nd hand cars & own them for many years. Even factoring in higher servicing and repairs costs, compared to always having a new car, I bet you could keep it down to £300pm (including repairs)

Only £162pm now needs to be invested, so a total of £462pm

You have £138pm surplus that you can invest to help cover other potentially more important lifestyle costs in retirement like travelling / holidays

Always think what is this costing me to maintain in retirement as well