Many retirees would love to celebrate a lifetime of hard work by driving around in a luxury car during retirement. However, there’s one problem. That luxury purchase could quickly start eating away at retirement savings. The costs and trade-offs are something that shouldn’t be ignored.
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Luckily, with a little perspective, you can make a more informed decision on whether a luxury car will add joy to your retirement years or just take away your financial peace of mind. Keep reading to discover some of the reasons you should and shouldn’t buy a luxury car in retirement.
Why You Should Consider Buying a Luxury Car
First, let’s look at some reasons you could consider buying a luxury car in retirement.
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A Reward for a Lifetime of Work
Retirement is the time when you get to finally enjoy the decades you’ve spent saving your money and budgeting everyday expenses. Purchasing a luxury car can help you feel a sense of accomplishment and offer personal satisfaction.
However, even if you decide to splurge, it’s still important to make sure this purchase aligns with your overall goals in retirement. Do you have room in the budget for the monthly car payment? Do you have the cash available to purchase the car outright? Make sure this financial decision will leave you just as comfortable financially after as you were before.
Comfort and Safety Matter More With Age
It’s no secret that most luxury cars are designed for smooth rides, quieter cabins and less road fatigue. This can be ideal for aging joints and longer trips. Plus, advanced safety features like lane-keeping assist, blind-spot monitoring and adaptive cruise control can make driving safer and less stressful in retirement.
Travel Becomes More Enjoyable
Once you retire, you’ll likely have more time to travel. It could be to see kids or grandkids, or it could be to explore a new place. If you’re traveling by car, something luxurious with premium seating, climate control and entertainment options can make the ride nearly as enjoyable as the destination.
Reasons You Shouldn’t Buy a Luxury Car in Retirement
Now let’s consider some of the reasons you shouldn’t buy a luxury car in retirement.
The High Cost Can Eat Into Retirement Savings
Even if you’ve paid off your home and saved a significant nest egg, spending money on a luxury car can still affect your savings. Instead of having that cash generate income for future healthcare needs, travel or unexpected expenses, it will be tied up in a depreciating asset.
Depreciation Hurts
Luxury cars lose value fast. Sometimes, it can be thousands of dollars the moment you drive off the sales lot. Unlike your investments, this money isn’t going to help you earn income; it’s just going to end up costing you in the long run.
Ongoing Expenses Add Up Quickly
While luxury cars can be enjoyable to drive, they often come with some problems that most people don’t talk about. Depending on the manufacturer, they may require specialty parts that are less common, which can lead to higher repair costs. Insurance premiums also tend to be higher.
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This article originally appeared on GOBankingRates.com: 6 Reasons You Should — and Should Not — Buy a Luxury Car in Retirement
