Love Is Not Enough: A Smart Woman’s Guide to Money. Merryn Webb Somerset

by consumerism and its corporate cheerleaders, and start looking at your purchases rationally, you’ll find you buy less unnecessary stuff and that your spending will automatically fall. I also hope that when this happens it feels very good indeed.

      You may find that as you stop wasting hours in the shops, your obsession with consumer culture diminishes, the burden of desire lifts from your shoulders and you are suddenly much happier (see Chapter 11 for more on why consumption alone can’t make you really happy). You may be able to see beyond your needs as a consumer (i.e. those implanted in your brain by the corporate world) to your real needs as a person (time spent with your mother as opposed to time spent racing round Ikea at the weekend, perhaps). And as your spending falls you will also find that you have given yourself more choices. The less you spend the less you need to earn and the more you can look for work that fulfils you rather than just fills your bank account. Remind yourself as you go that while you don’t want to be living entirely in the future, everything you buy now that you don’t need or that doesn’t bring you pleasure is effectively money stolen from your future.

      In the rest of this chapter I want to go beyond the small things and look at the big things we pay too much for on a regular basis, such as cars, furniture, utilities and insurance. Houses are another area where we waste vast amounts of money, so much so that I’ve left them out of this chapter and given them a chapter of their own. See p.221.

       New cars: why you don’t need them

      Every time the petrol price goes up we hear endless moaning about how much it costs drivers. The pressure groups looking for the government to ‘do something’ about the high oil price add up how much every penny on a litre costs the average driver and splash the results over the front pages of the papers and the nation gets itself in a tizzy calling for windfall taxes on the oil companies. But a penny on a litre of petrol adds up to well under £100 for the average driver. And that’s absolutely nothing compared to the money most people are chucking down the drain every day just by owning their cars.

      A new car loses 20% of its value as soon as it leaves the forecourt and will be worth 30% less than its list price within three months. A few examples. If you had bought a Citroën Xsara Picasso 1.6 SX in 2004 it would have cost you £14,100. Try to sell it eighteen months later and you’d have got (according to What Car?) around £6,000 for it. That’s a loss of over £8,000 or 57%. You’d have lost a similar amount on a Ford Kaa 1.3 hatchback (£5,000 or 52% of your cash) or a Saab 9–3 1.8 four-door (£9,250 or 45%). On the Saab you’re losing about £17 a day. On a really expensive luxury car you could be losing £100-plus a day.

      This doesn’t make any sense at all. Why would anyone throw that kind of money around just to drive a brand-new car? Particularly as a new car turns into a second-hand car as soon as you drive it off the forecourt. None of the answers to this question is a good one. Some say they just like to have a car that no one else has ever driven. But there’s no such thing. How do you think your new car got to the showroom? It didn’t just drive itself off the lorry – someone else’s bottom has always sat on the driver’s seat at some point. Some say they like that ‘new car smell’. And maybe they do (although given that it is a smell of plastics, metals and various not particularly desirable chemicals I can’t think why) but if that’s the case they could amuse themselves by putting a plastic bag over their heads and ripping up £50 notes. The final effect would be roughly the same as that of buying a new car.

      “I just ordered the new Bentley convertible. How much was it? I don’t know – I didn’t ask.”

      Paris Hilton

      Some say that with a new car they know that nothing is likely to go wrong. They also know that if it does they have a guarantee to ensure peace of mind. This too is nonsensical. If a car has been on the road for five years and been properly serviced there’s no more reason why it should break down than a new car. And if you buy a second-hand car from a reputable dealer of any kind you can get the same kind of guarantee you’d get with a new car anyway. As for the often voiced concern that if you buy a secondhand car you could end up with one that has been in an accident and been reconditioned, this really isn’t a big deal either – you can get any car checked any time by your own mechanic or by the AA before you buy it for a matter of £100 or so.

      The final reason people give (when pushed) for buying a new car is that it shows off their relative wealth and status. I’m not going to start on the stupidity of this except to point out that anyone who really thinks that driving a new Picasso gives them more status than driving a year-old one probably has bigger problems than I can address here. If you are very rich and status is very important to you then go ahead, buy all the new cars you like (there’s nothing wrong with it as a hobby if you can afford it), but if you aren’t and it isn’t (and it shouldn’t be) take yourself down to your nearest car supermarket next time you need a change of car. Then put the ten grand you save in a pension. You’ll thank yourself later (see Chapter 6).

      While I’m on the subject of money wasted on cars I want to go back to petrol. Why do people insist on buying super unleaded petrol at about 10p a litre more than ordinary unleaded? The AA says it makes no difference whatsoever to the performance of a car or to its petrol consumption, so if our average driver uses super instead of normal on a regular basis, they’re throwing away another few pounds every time they fill the tank. And that’s not the end of the car-related waste. Even more comes in the form of the dealer network garages that so many drivers take their cars to. A recent survey showed that these dealer garages charge up to £140 an hour for their labour compared to £35–£40 for an ordinary garage. So let’s say you get your car serviced once a year and it takes four hours. That’s another couple of hundred pounds down the drain. The whole thing is beyond me.

      If you must buy a new car you might want to think about buying it at the end rather than the beginning of the month. Why? Because that’s when dealers are most desperate to hit their monthly sales targets and so most likely to give you a proper discount. Last year What Car? sent undercover buyers to car showrooms at the end of March and then again at the beginning of April. On average they were offered the same cars at £525 less at the end of the month than at the beginning and in some cases the price difference ran into the thousands. And when you do go in to start your negotiations make sure you are tough about it whatever time of the month it is. You may think you live in an equal sort of a world but car salesmen think nothing of the sort: they think women are a bit of a soft touch and so save up all their big discounts for men. What Car? sent both a man and a woman into 45 dealerships around the country last year and discovered that on average women are asked to pay up to £1,800 more for exactly the same car as men (the problem also exists in the US where women are charged on average $1,300 more than men for the same new car). Four out of five of the salesmen approached by What Car? were prepared to cut prices for men but less than half offered any deal for women. If you can’t face fighting this kind of inbuilt prejudice (life is too short to fight every battle) send a man in to do the bargaining bit for you.

      Finally, before you shell out consider if you need a car of your own at all. According to Sainsbury’s Bank the average motorist spends about £2,000 a year on car expenses – insurance, fuel, parking, tax, servicing and repairs. Include depreciation, says the RAC, and that number goes up to around £5,000 a year and higher for real gas-guzzlers (a Porsche Cayenne will cost its owners going on £19,000 a year, according to the RAC’s figures). That’s a whopping amount of money particularly if (like me) you live in a city and don’t use your car that much. So why not consider a sharing scheme of some kind? Join a car club and you can order up whatever kind of car you want whenever you want it, without the bother of tax or maintenance and for a fraction of the price of owning your own car. You pay a monthly fee to the club and are then charged based on how long you have the car for on each outing and on how far you drive. Carplus suggests that driving this way will save you around £1,000–£15,000 a year