--- title: "Buying cars: the worst finance habit?" description: If I had to describe my worst financial habit, along with a number of my friends, it would be buying cars.  A sensible financial choice around cars would be to buy a Toyota and drive it until it dies. I’m not sure I know anyone who does that. image: https://blog.nzhl.co.nz/hubfs/carpurchase-548x350-1.jpg --- [0800 030 646](tel:0800030646) - Search - [Contact Us](https://nzhl.co.nz/contact-us/) - [Find Us](https://nzhl.co.nz/find-us/) - [Client Login](https://nzhl.co.nz/login/) [![NZHL](https://blog.nzhl.co.nz/hubfs/Nzhl_January2019%20Theme/Images/logo-footer-nzhl.png)](https://nzhl.co.nz/) - [Home Loans](https://nzhl.co.nz/home-loans) - - [Change to NZHL](https://nzhl.co.nz/home-loans/switch-to-nzhl/) - [Buying your first home](https://nzhl.co.nz/home-loans/first-home/) - [Buying your next home](https://nzhl.co.nz/home-loans/next-home/) - [Interest rates](https://nzhl.co.nz/home-loans/interest-rates/) - [Home Loan calculators](https://nzhl.co.nz/home-loans/tools-calculators/) - [FAQ](https://nzhl.co.nz/about-nzhl/faq/) - - [How much could I borrow?](https://nzhl.co.nz/home-loans/tools-calculators/) - [Where's my nearest office?](https://nzhl.co.nz/find-us/) - [How much deposit do I need?](https://nzhl.co.nz/home-loans/first-home/getting-a-deposit/) - [Insurance](https://nzhl.co.nz/insurance) - - [Your Life](https://nzhl.co.nz/insurance/your-life/) - [Your Health](https://nzhl.co.nz/insurance/your-health/) - [Your Home and Car](https://nzhl.co.nz/insurance/your-home/) - [Your Income](https://nzhl.co.nz/insurance/your-income/) - [Request a quote](https://nzhl.co.nz/insurance/request-a-quote/) - [FAQ](https://nzhl.co.nz/about-nzhl/faq/) - - [NEW! 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I’m not sure I know anyone who does that. This week I thought I would compare a couple of scenarios and show the difference between a more prudent approach versus a more passionate approach to cars. I will compare the impact on a mortgage of the following vehicle purchase scenarios: 1. Purchasing a new car for $50,000 and repeating this $50,000 purchase every 3 years with a $25,000 trade in (initial purchase $50,000 then $25,000 every 3 years). 2. Purchasing a used car for $20,000 and updating every 5 years with a $8,000 trade in (initial purchase $20,000 then $12,000 every 5 years) In this scenario the starting point is a mortgage of $325,000 (if no cars are purchased, A.K.A. the walk/bike scenario, would mean the mortgage is paid off in 12 years 1 month and total interest paid of $135,000) the purchase of the vehicles will be done as additional borrowing on the mortgage. - Option 1, new car purchase, would mean total interest of $251,000 paid on the mortgage and 19 years 3 months to pay off the home loan. - Option 2, the used car purchase, would mean total interest paid of $162,000 and mortgage paid off in 13 years 9 months. So, the difference between new car and used car is an extra five and half years to pay off the mortgage and $89,000 in interest. Not a compelling case for the new car scenario but it is always better to understand the implications of financials decisions and be comfortable with them going forward. *The information contained in this article is of a general nature and should not be taken as advice. It reflects the opinions of the writer only and does not necessarily reflect the opinions of New Zealand Home Loans.*   *[![New call-to-action](https://hubspot-no-cache-ap1-prod.s3.amazonaws.com/cta/default/5029003/15f9b75f-b0b2-4fde-a7e7-54af0db03053.png)](https://hubspot-cta-redirect-ap1-prod.s3.amazonaws.com/cta/redirect/5029003/15f9b75f-b0b2-4fde-a7e7-54af0db03053)* - NZHL *Author* **Share this article** - LinkedIn - Facebook - Twitter - Google - Reddit - Tumblr ##### Related Articles Get in Touch With Us ##### Popular Posts [![Should you break your loan?](https://blog.nzhl.co.nz/hs-fs/hubfs/shutterstock_1233077740.jpg?width=300&name=shutterstock_1233077740.jpg)](https://blog.nzhl.co.nz/articles/should-you-break-your-loan) [**Should you break your loan?**](https://blog.nzhl.co.nz/articles/should-you-break-your-loan) 11 June 2015 In my recent article I spoke about the[impact of the OCR if you are floating](http://www.nzhl.co.nz/are-you-benefiting-from-the-ocr-drop/). Today I’ll... 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