Should you buy a car?
Updated: Feb 22, 2019
For most people, their two biggest expenses are their car and their house. This makes sense, as they are two of the largest single purchases you can make, and then they have many repeating costs as well. For cars, the monthly payment is only the beginning. You still have petrol, insurance, maintenance, repairs, registration, parking, and those pesky tickets. And the UAE has a huge luxury car culture, with every other car a BMW, Mercedes, or Rolls Royce. So many expats come here and get the fancy car they've always dreamed of because they can finally afford it, but there are huge financial consequences to that decision.
If you don't believe me, actually track your spending on your car for a month or two. Spending tracker apps like "Spending tracker" are free and take about 10 seconds to use after you make a purchase. Try to include the month when you pay your fines and registration and insurance to get a more accurate picture. You can only make a rational decision if you have all the information, and without knowing the actual amount you spend, you don't have that information. For me, I average about 2000 AED a month on my car, and I'm only driving a 2016 Nissan. If you're driving a luxury brand, I'll bet you easily double or triple that number. If you're thinking about purchasing one, be aware of how much of your salary it will eat up. Can you afford to spend an extra 4,000-6,000 AED on transportation? Could that money go somewhere else that benefits you, like stocks or real estate, assets that generate wealth instead of draining it?
For the first 8 months I lived in Dubai, I didn't own a car. I was lucky that my apartment and my job were a two minute walk from one another. I took the metro everywhere else, as I live near a metro stop as well. For the rare occasions I needed it, I took a cab. Not only did I spend 1/5 of what I spend now on transportation, I also lost weight because of my less sedentary life style. This is consistent with findings from the American Heart Association that shows that people who consistently take public transportation have lower rates of obesity, heart disease, diabetes, and unhealthy blood pressure.
Then a friend of mine was moving and needed to sell her car, and I was getting more gigs with my band and needed a convenient way to get my instrument and myself on time to gigs all over the UAE. A car was required. Then, the next year I got a new job in a part of town that I didn't want to live. So I needed a car that could function as a daily commuter; newer, more reliable, better sound system. It was also more than 3 times as expensive as the first car, with the increased costs that went with that as well like the service plan and higher insurance.
If you're trying to decide whether to get a car, or what car to get, think about the following:
Can I move closer to work and either walk or drive less?
Can I use public transportation more? What about things like eCar where you share a car using an app?
How much will the full total costs be? Do I really want to spend that much?
Should I really spend tons of money on a car that is just going to lose value as soon as I drive it off the lot?
You may still get the car, I did, even if I often regret it, but at least you're making an informed decision that is right for you.
Thanks to The National for publishing this article!
If you liked this post, come join the discussion over at The Happiest Teacher Facebook Group! I would love to have your voice added to the discussion! Also, if you're into that Twitter life, come follow me!