What owning a vehicle teaches you about your spending

Most people wouldn’t have any trouble telling you what the repayment is that they make on their car loan each month. But many wouldn’t be able to tell you what their vehicle really costs them to own.

The difference between the two might be more interesting and important than it first appears, and it could offer some deeper insight into how we think about money.

Adding up ownership

You’ve probably seen something like it: A car buyer who goes into a car dealership, spots exactly what they want and sets out to get it, no matter what sacrifice they need to make. But then another buyer might be more focused on finding something at a certain price point – and they care a lot less about exactly which vehicle they buy. Still another sort of buyer might have spent months researching and know exactly what they want, and the price they should be asked to pay for it.

The person who buys the car they really want may assume everything will work itself out. And often it does. The person who buys less than they can afford might value the certainty and peace-of-mind that comes with a bit of extra breathing room. The researcher may be very focused on not making a mistake, or a wrong financial move.

Although these can seem like observations about the different ways people buy a vehicle, they’re really more broadly observations about people’s attitude to money.

Some people think of money simply as a tool to get the things they want. Others value the security that money can give them. Some spend a lot of time making careful financial decisions. Many of us are a mix of all three.

There’s no “right” way to approach it, provided you can afford the vehicle you buy. But it can help to understand your own psychology around the decision, and what it might indicate about your approach to the rest of your financial life.

The cost that surprises people

The purchase price is an important part of the cost of owning a car, but it’s not the only one. Vehicle owners also pay for costs like insurance, maintenance, fuel – and even accessories for their vehicles. It’s things like the registration bill arriving when you’d forgotten it was coming up for renewal or being totally on top of your car repayments until you discover you have to replace all your tyres.

How we plan for those and fit them into our budgets can also sometimes reflect wider money decisions. Some people put money aside each payday to cover car costs that might pop up in future. Others build an emergency fund that can cater for all sorts of unexpected expenses. Some people prefer to decide they’ll just deal with it if it happens. Many of us are somewhere in between.

Again, there’s no right answer but understanding your approach can help you work out what support you might need, or strategies you could put in place to help you keep things running smoothly.

What changes after the first year 

Once you’ve owned a vehicle for a while, you’ll probably notice that you’ve fallen into some patterns. It’s not quite as exciting anymore, and is a bit more routine. Instead of thinking about buying your car, you’re focused on maintaining it. This is when the real picture of the cost of ownership can emerge.

You may no longer be in the “new vehicle” zone of buying new car seat covers and spending every weekend at shops like Super Cheap Auto. Instead, you’re more in the space where you’re booking in a service and completing other maintenance. You’ll have got used to how much fuel you need to buy each month and you’ll be in the habit of making loan repayments.  

This can sometimes be a good time to take stock of how things are working for you, where any pressure points or concerns are and how the overall cost of ownership fits into your life. You knew what the car cost when you bought it, but at this point you’re starting to get a clearer picture of what it will continue to cost through its life.

What sits underneath the urge to change

Sometimes you might find yourself look at new vehicles, even when there’s nothing wrong with the one you have. Vehicles aren’t just four wheels that you get around on. They can represent freedom, success, status, safety for your family, a way to move your business or your pets.

Sometimes, your life might change and it could make sense to think about changing your vehicle. Nothing might have changed about the one you’ve got, it’s just that something else could be a better fit.

The urge to upgrade could be a lot less about the vehicle and more about your family growing, you taking on a new job, a need for a more reliable vehicle in a new stage of your life, or just a reward to yourself after a lot of hard work or a difficult period.

What you tend to notice looking back

Your first car is quite a different experience than a car you might own 10 years later. Most of us remember our first car all of our lives. While the emotions in later decisions may be different, later car-buying decisions can be just as revealing of how your relationship with money has evolved, or hasn’t.

Early on, you were probably full of excitement, dreaming of independence and resolved to make it work, even if it meant a few sacrifices along the way. Later on, you might be more focused on finding something that works for your family, and your family’s budget – the vehicle itself might be secondary.

What’s changed isn’t your vehicle, or even your attitude to vehicle ownership, but rather your priorities and how ownership fits into your wider life. Vehicles reveal a lot about our finances because they’re one of the few purchases we live with every day and over time they can highlight how we handle surprises, trade-offs, priorities and changes.

If thinking about your vehicle, has you thinking about your broader finances, we're here to help - get in touch when it feels right.

Disclaimer: Please note that the content provided in this article is intended as an overview and as general information only. While care is taken to ensure accuracy and reliability, the information provided is subject to continuous change and may not reflect current developments or address your situation. Before making any decisions based on the information provided in this article, please use your discretion and seek independent guidance.