It is a question a lot of people face at some point. You have saved up a decent chunk of money. Your old car still runs. But you want something newer. Is it a smart move — or a mistake you will regret?
One person recently asked financial expert Eoin McGee exactly that. They are in their mid-20s, have been driving a 2013 Honda Civic with 200,000 kilometers on it for six years, and spend about $150 a month on fuel. They have $70,000 in savings and low monthly expenses. But they do not own a home and have no pension.
The proposed purchase: a new car costing $23,000 — paid in cash from those savings.
For context, financing that same $23,000 car with a loan would cost roughly $450 per month over five years. Paying cash avoids that monthly hit — but it also means pulling a significant portion of existing savings.
The tension at the heart of this question is one many people understand. Wanting something reasonable and practical does not feel foolish. But when a home purchase and retirement savings are both still on the horizon, every large spending decision carries real weight.
It is the kind of trade-off that does not have one universal right answer. The numbers, the timing, and the personal priorities all matter. Which is exactly why questions like this one are worth thinking through carefully before signing anything.
Whether you are helping a younger family member think through a similar decision — or weighing one yourself — the core question is the same: what does this purchase cost you in terms of the goals you have not yet reached?