Is a new car in retirement a big con?

Planning your retirement can be exciting. Perhaps you’ll take a road trip, help out more with the grandkids, or volunteer at a local charity. A new car might be handy for all these things, but there are pros and cons for every decision. 

Key learnings covered in this topic

  1. The perks of owning a new car in retirement, such as:
    -Better reliability
    -Access to the latest technology
    -Safety first
    -Tailoring to your lifestyle
  2. The big downside: Depreciation
  3. Seeking financial advice at no extra cost


Unless you’re a good mechanic, having your car break down is one of life’s great frustrations. Maybe you’ve broken down in the rain, the dark or at a major intersection — it’s not fun. If you’re planning some road trips in retirement, then maybe a new car is a good idea. That way, you can travel the back roads, the highways, and the windy tracks with a sense of confidence in your vehicle.


Driving around with the latest navigation system can make getting from A to B so much easier. You’ll enjoy features like a bigger screen and better resolution to make seeing maps and hazards easier. You’ll have voice recognition so you can make commands while driving, and the system might even point out accommodation and points of interest along the way. You might also receive automatic map updates, real-time traffic information, and a speed warning system which can save you from a ticket or two.


There’s no denying that the technology in new cars makes them safer for drivers and passengers.  Your reflexes and eyesight might not be what they once were so emergency braking, reverse and side cameras, blind spot and reverse traffic warnings, stability control and lane centring assistance could really make a big difference to your safety on the road.


A new car might give you the opportunity to do more unique road trips, tow a caravan, or enable you to help out more with the grandkids.  With more seats you’re in a better position to help out with school pick ups and drop offs and weekend sport. Whatever your goals for retirement, a bigger car could help create the lifestyle you want.


The advantages of a new car all sound pretty good, so what are the cons? Putting aside the cost, there’s one big one — depreciation.

Did you know a new car can drop up to 15% in value the moment it leaves the showroom? And after the first year, it can lose another 15%.^ After three years, a new car can lose up to 40% of its total value.#

Could that money be better spent in retirement? Perhaps a late- model used car in good condition could be an option. The previous owner has already worn a lot of the depreciation and you still get a car that meets your retirement needs.

Should you get a new car? Ultimately the decision is up to you, your budget and your retirement goals.

We can help build your ideal retirement

As part of your membership, you can talk to a financial planner about tax-effective ways to boost your super, your risk profile and investment options. You can also access more comprehensive advice that’s tailored for you through a specialist planner.**

Book a call-back today.

*Financial advice obtained over the phone, or through MemberOnline, is provided by Mercer Financial Advice (Australia) Pty Ltd (MFAAPL) ABN 76 153 168 293, Australian Financial Services Licence #411766. 
**Advice is provided by one of our financial planners who are Authorised Representatives of Industry Funds Services Limited (IFS). IFS is responsible for any advice given to you by its Authorised Representatives. Industry Fund Services Limited ABN 54 007 016 195 AFSL 232514.
^Budget Direct. Ultimate Car Depreciation Guide. Retrieved 6 March 2024
# Youi. Car Depreciation: 6 Things You Need to Know

Information correct as at 8 March 2024.