Am I the only one who thinks winning a car is ironic? Possibly, it seems that a vehicle is one of the most popular prizes these days. From fast food restaurants to charity draws they all seem to tempt you with a shiny new vehicle (usually fancy and top of the line.) Personally, this seems more of a punishment than a win.
Assuming that you actually take the prize instead of asking for the cash equivalent the "win" is probably going to cost you money. Why? In most cases I would assume that the car you win is bigger/fancier than the one the you currently have (otherwise why would you try and win it?) As a result of winning you are going to:
-Pay more for insurance, the car is new and expensive and will cost more to replace hence the hike in your monthly payments. Add extra if the car is sporty since the insurance company assumes that people who drive sporty cars are more dangerous drivers.
-Pay more for gas, I have yet to see a hybrid as a prize but I've seen lots SUV's and vans. Needless to say your fuel efficiency is going down with these vehicles and your costs are going up.
-Pay more for your next car. Let's be honest, when this car wears out are you going to be happy downgrading to what you had before? Or have you adapted to your new normal? If it's the later it's going to cost you.
-Pay more for maintenance (maybe). Ok, I'll admit that this is fairly variable. A new car may need less maintenance at the beginning (especially if you are driving an old car) but the more bells and whistles it has the more there is to break.
In other words why on earth would you want to win a car? On the other hand I would love to win a TFSA or RRSP contribution, but I haven't seen any of those about. What's up with that?
The personal finance blog of a finance enthusiast. Infused with practical tips, personal stories, and a healthy dose of humour.
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