When you retire, it’s important to reevaluate your financial needs and priorities.
Here are five reasons why buying a new car might not be the best option for retirees.
1. Reduction in the need for transportation
Scott Lieberman, founder of Touchdown Money, says retirees tend to need fewer vehicles.
“If you’re retired, there’s a good chance you won’t need an additional vehicle in your golden years,” he said.
With fewer daily obligations and no need to commute, one car per household is often sufficient.
2. Financial restrictions
Many retirees live on fixed incomes, making big purchases like a car complicated.
Chris Pyle, automotive expert at JustAnswer, said, “Most retired workers are barely getting by on Social Security and some savings, maybe even an IRA or 401(k).”
A new car payment could put a strain on an already tight budget.
3. High cost of new vehicles
“It’s a bad time to be buying cars, and new cars are quite expensive even in good times,” Lieberman said.
With car prices at record highs, the investment may not make financial sense for retirees, especially when you factor in higher insurance premiums for older drivers.
4. Health considerations
Pyle also noted that health can influence car ownership: “Your reflexes and eyesight are not good enough to drive. Your body is fragile and it is difficult to get in and out of the vehicle.”
As we age, driving can become more challenging and even dangerous.
5. Prioritization of essential expenses
Retirees should prioritize their essential needs before considering purchasing a car.
“Food, shelter, utilities and medicine are more important than a car, a loan, maintenance and insurance,” Pyle said.
Alternative transportation options
Instead of spending hard-earned money on a car, Lieberman suggests saving by researching alternative transportation options.
“Ride-sharing options are often cheaper than owning a car,” he said.
With services like Uber and Lyft, plus excellent public transportation in many areas, it may be more beneficial to go without a car.
Furthermore, using shared and public transport is a more environmentally friendly option.
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