Published on February 28th, 2017 | by Daniel Sherman Fernandez0
Do you actually NEED a 3rd car?
Malaysians are car crazy, just like they are gadget crazy. Smart phones, technology toys, gaming and cars seems to be the ‘must have’ for many young working Malaysians before the need for a roof over their head.
(the need for a classic retro car pictured above can be an investment)
Many people give up financial freedom for their whole lives solely because of the decisions they make with their cars. I know it sounds like a bold statement, but I think it is frightening how true it is.
(or a weekend race car for some serious fun behind the wheel can be very costly)
For most people, a car is the second largest purchase they ever make. Second only to their home. The huge difference is that even if they make a bad home purchase, generally speaking it will go up in value over time. Car depreciation on the other hand, is a beast of burden. Regardless of whether you buy a new or used car, it is going to go down in value (unless it is classic car buy), but the key is how fast does it go down in value?
(the weekend only car for long drives and quick overnight get-aways….the biggest depreciation of all)
So, if you compare a new car vs. a 6-year-old car, the new car will lose a couple thousand ringgit or so in resale value each month. The 6-year-old car on the other hand will lose several hundred ringgit or so each month. If you think about it from an investors perspective, it is easy to see that if you must have an investment that loses value, you will probably pick the one that loses LESS each year.
(the drift car for serious driving fun…..get ready for a healthy bank balance or a thick wallet parent)
So why do many middle class Malaysians on a tightening economy have a 3rd car in their house? We wonder why oh why.
(owning and running a true classic will be an investment)