Written by Sally Perkins
Today’s retired Americans – ‘Baby Boomers’ – own 70% of the country’s disposable income, making them the most likely to be able to spend out on expensive holidays or valuable assets. One asset retirees may want to invest in is a car. This may be particularly relevant to those who want to make the most of various road trips. Or it might just be that certain retired people want to update their car as a way of celebrating such a significant milestone. Whatever the reason, it is important to weigh up a number of key considerations before deciding what type of vehicle to go for.
Consider the purpose of your motor
The most suitable car for you will depend on the size and style of vehicle you need. This, in turn, will depend on what you will be using the car for the majority of the time. If, for example, you are likely to be using your car most days, or have family you’ll often be giving lifts to, you may find a larger automobile the most appropriate. With 80-97% of American vehicles projected to be SUVs or trucks by 2022, this would be a popular choice. On the other hand, if you are only likely to be using your car occasionally, or for short journeys, a smaller car that is probably cheaper to run may be the best option for you. It is also worth considering how long you want the car to last. Are you, for instance, looking for something that will last for a considerable number of years, or are you likely to want to update the car again in a few years’ time? These factors will influence how much you should be looking to spend and whether you should for a used car or something new.
Don’t forget about maintenance costs
It goes without saying that the upfront cost of a car is just the beginning; the maintenance of the car is where the real costs start to quickly add up. This can be particularly true in the case of used cars, when the risk of problems arising is higher than with new cars. Drivers will often be covered by a three year warranty when buying a new car; used cars don’t come with this benefit, making them more of a risk in that sense. With maintenance costs for new cars (including tire changes) hitting an average of $99 per year, it is imperative you get an up-to-date history of any car you are interested in buying. Whether you opt for a new or used car, large or small, be sure to research thoroughly any aspects that are known to be problematic and pricey to maintain. This can help you gain clarity and lessen the chance of you having unexpected costs early on.
Prioritize the safety features of a car
Of prime importance when it comes to purchasing a car is safety. Strict safety regulations for new cars, along with the focus on safety features in the design of modern cars, mean that new cars are likely to be a safer option than older models. The emergence of features such as Automatic Emergency Braking (AEB), Blind Spot Detection and lane assist helps keep drivers and pedestrians safer on the roads, whilst also helping to keep you more relaxed and confident behind the wheel. This might be particularly appealing for older drivers who tire more easily, particularly when it comes to lane assist, which recognizes when the car is veering out of a lane and immediately guides the steering wheel back into the correct lane.
Consider leasing a car
One option to consider when it comes to updating your car is to lease one, rather than buying it. This is increasingly popular among drivers, with over 30% of new cars leased in America in the second quarter of 2018. Leasing involves paying a monthly cost for a car and offers you the benefit of driving a brand new car for a given number of years. Whilst you wouldn’t actually own the car, leasing has the advantage of providing you with a reliable vehicle under a manufacturer’s guarantee at a cost far lower than the depreciation of the vehicle. The downside of leasing is that you do not end up owning the car and you must have the car for a fixed term. It is also extremely costly to end the contract early.
The takeaway: take your time to decide
If you are retiring and fancy treating yourself to a car, then you no doubt deserve it. However, purchasing a car is an important decision that obviously involves parting with a lot of money. For this reason, be sure to think carefully about your circumstances and the types of vehicles that will best accommodate your needs. Safety and affordability are key, so make sure you do your homework on the sums involved and the safety record of any model you are interested in. Think carefully about whether to buy a new or used car, or whether to lease. Finally, test drive any car you are considering, preferably at different times of day and with at least one passenger on board. This will give you a sense of what driving the car is like in different conditions, whilst also enabling you to receive honest feedback from others on their experience in the car.