Owning a car is an object of desire and financial goal for many people. Both for teenagers who turn 18 and want their first car, and for older people struggling to get their first brand new car out of the dealership.
However, leaving aside the question of desire, I can categorically state that the acquisition historically never proved to be financially advantageous, at least until the years 2021 and 2022 and that is what I will write to you in this text.
First of all, let’s get to the personal finance classic. As soon as the car leaves the dealership, it already has a devaluation of 10%, on average (this is an account for popular cars — luxury models that have less liquidity can depreciate more than 30% right away).
Subsequently, over the years, it is a good that ends up depreciating more and more, usually 10% per year in the first years, not to mention the expenses with revisions, maintenance, fuel, any fines, taxes, licensing and insurance.
It is clear, however, that the decision to have a vehicle of your own is not just financial and involves several aspects of your lifestyle. People with pets, for example, report greater difficulty using car services by app, for example.
However, at ParMais, we developed a few years ago a calculator to help you make the decision whether it is more advantageous to have a car of your own or to use apps.
All that said, the truth is that this whole story about cars not being valued has fallen apart in recent years. Given a unique combination of bottlenecks in the production and distribution of parts thanks to the crisis imposed by Covid-19, exchange rate appreciation and high demand, the reality is that cars have gone up (and a lot) in price in Brazil.
Do you doubt what I’m saying? Check the value of your model that you have in your house at Fipe table and have a pleasant surprise.
So, speaking of the financial aspect only, certainly selling your car now is an interesting idea. After all, you will be getting rid of a used asset with a beautiful appreciation. Popular cars have shown the highest price increases, which can be even more advantageous.
And the trend, when we overcome the pandemic, is accommodation and a return to the reality of before, that is, cars devalue over time.
The problem with this equation is that zero cars have also gone up a lot in price in recent years, which means that swapping your used one for a new one won’t make that much difference compared to what happened in previous years.
In practice, the big point to be addressed in this question is: is it worth having your own car? My proposal is to carry out an evaluation. Try going 15 days without using the car under any circumstances and see how you and your family feel about it.
If the lifestyle change makes sense to you after this test, without a doubt my recommendation is to sell. The time is extremely opportune for this. However, if you don’t feel comfortable living without a car, I suggest you stay as you are. After all, money has to serve us, not we serve it.
About the author
Annalisa Blando is a Planar Certified Financial Planner (CFP) and Founder and CEO of ParMais, the first Wealth Management Tech in Brazil. She is also the leader of the Mulheres do Brasil group in Florianópolis.