Most of us like flashy cars – is it always a waste of money to buy a brand new one?

Oooh, I haaaate flashy cars! Cars – beautiful shiny cars … are, the greatest way Gen Xers can waste money on this planet.

New cars are gigantic wealth suckers. The flashier, the suckier. Financial vacuum cleaners, souped up by Tim “The Tool Man” Taylor. They clean out wallets, bank balances and credit ratings like little else, except maybe poker machines and owning race horses.

Some people might find the following admission embarrassing. I don’t. I bought my first new car aged 38. And, given the above, why didn’t I buy a second-hand one?

Because it was the bottom of the GFC and then-PM Kevin Rudd was offering “obscene” bonus tax deductions to encourage businesses to buy new cars. It was almost cheaper to buy new than second hand.

Cars are depreciating assets in a class of their own. Try 20-30 per cent as soon as you sign up. Then another 20 per cent in year two.

The more money you spend on cars, the poorer you will be. I can safely say my bottom line is $100,000 better off today than if I’d bought 3-4 affordable new cars over my working life.

Cars bring enormous joy to some people. If so, go ahead and buy new ones. But understand the huge impact they have on your finances. Regularly updating your wheels to new will cost you $10,000-15,000 a year, per car, EVERY year.

Bruce Brammall is the author of Debt Man Walking (www.debtman.com.au) and principal adviser with Castellan Financial Consulting.