Wananchi Opinion: A car can seriously ruin your finances

Many people dream of owning a car. It's often seen as a symbol of success, comfort, and independence.

In many societies a car signals that someone has “made it.” Yet this belief has pushed many individuals into serious financial trouble.

The truth that many people refuse to accept is simple: a car is not for everybody. If you are not financially ready, draining your savings or taking a loan just to own a car can push you toward financial ruin.

A car is not only a purchase. It is a long-term financial commitment. The price you pay at the showroom is only the beginning. After buying the vehicle you must deal with insurance, fuel, servicing, repairs, parking, and annual licensing. 

These costs never stop. Even a modest car can consume a significant portion of a person’s income every month. Many people only think about the buying price and ignore the endless stream of expenses that follow.

Another harsh reality is that a car loses value quickly. The moment you drive it out of the dealership, its value begins to fall. Within a few years it may be worth far less than what you paid.

In financial terms, a private car is not an investment. It is a depreciating asset. When someone empties their savings or takes a loan to buy such an asset, they are essentially exchanging financial security for a liability that keeps demanding money.

Loans make the situation even worse. Borrowing to buy a car means committing part of your future income to repay a rapidly depreciating item.

Every month the loan repayment must be made whether your income is stable or not. If unexpected expenses arise or your income drops, the loan quickly becomes a burden.

Some people end up struggling to pay school fees, rent, or medical bills because a large portion of their salary goes to servicing a car loan. What looked like a symbol of progress becomes a trap.

Depleting savings to buy a car is equally dangerous. Savings exist for emergencies, opportunities, and long-term goals.

They are meant to protect you during difficult times such as illness, job loss, or family emergencies. When someone wipes out their savings to purchase a car, they remove their financial safety net. The next unexpected expense forces them to borrow or sell something valuable just to survive.

There is also a psychological trap associated with car ownership. Once people buy a car, they feel pressured to maintain a lifestyle that matches the image.

They drive more often, spend more on fuel, and sometimes even upgrade prematurely to maintain status. Instead of improving their financial stability, the car silently drains their resources month after month.

Public transport, car pooling, ride sharing, and occasional car rentals can be far more sensible options for many people.

These alternatives allow individuals to move around without carrying the heavy financial burden of full-time car ownership.

The money saved can be invested, used to start a business, or directed toward education and family needs.

Financial readiness for a private car means more than simply affording the purchase price. It means having stable income, sufficient savings, and the ability to meet all running costs without strain.

If buying a car will leave you struggling to meet basic financial obligations, then you are not ready. Waiting is wiser than rushing into a decision that could weaken your financial future.

A private car can be useful and convenient, but it is not a necessity for everyone. Owning one should be the result of financial strength, not financial desperation. Do not sacrifice your savings or tie yourself to a heavy loan simply to keep up appearances.

If you do, the car you hoped would improve your life may instead become the reason your finances collapse.

Mr. Abol Kings is a former banker and a personal finance advisor.

E-mail: abolkings2018@gmail.com