Your financial advisor might have repeatedly advised you over and over again to go for something within your reach when buying a car.
Experts have also insisted that a car is a liability that depreciates at astonishing levels and that the amount you spend on a car should reflect your current financial situation.
However, this narrative has changed over the years, especially with our fathers( Boomers generation) and Gen X and millennials. Now more than ever, especially in Nairobi, an expensive car is being treated as an asset that can potentially give you thousands in return.
Let’s start off by saying your car may be considered an “asset.” yes, because you can sell it for a large amount of money.
This can help in emergency situations and may help you to get out from underneath the loan. But your car is not an investment. It depreciates over time. Kenyans, however, believe that buying an expensive car is an important step in making money, especially in Nairobi where life has been materialized.
So how does a big car help make more money according to a majority?
- Better negotiations
It has become increasingly impossible to negotiate for a better salary or deal without a nice car in Nairobi.
People have aired their frustration after meetings and interviews whereby the interviewer demanded to know what they drive.
John Kuria, a top manager in a telecommunication firm in Nairobi told Marketcap that he has lost a couple of lucrative jobs he had been shortlisted because of what he drives.
Things however changed when he ditched his Mazda Demio for a Mercedes C200 which now cost almost Ksh 4 million.
“Whenever interviewers asked me what I drive, or peeped too see what car I came with, they’d automatically switch off when they saw it was a Demio.
“They also didn’t believe I was worth the pay I was asking for, despite my deep portfolio, given the car I drove. But this changed when I got the C200 after a friend advised me.”
2. Status symbol
A lot of employers now believe some positions want people who look the part.
Top managers are now being forced by companies into buying these expensive cars to fit the profile.
3. Sign of prosperity
Recruiters are now opting to use lifestyle analysis as a gauge of talent.
In an era marred with high unemployment rates, fake CVs and half-baked graduates, it’s becoming increasingly hard to to verify who can do the job before giving them a contract.
Recruiters, therefore, are using such things as cars, phones and other material things when judging a person’s success in the field before they bring them on board. It’s not a secret cars are now being used to judge someone’s success not just in the city but in the world in general.
There’s a misconception that people driving nice, expensive cars are doing well financially. According to self-made millionaire and bestselling author David Bach, however, buying an expensive car, especially if it’s brand new, is one of the worst financial decisions one can make.
“Nothing you will do in your lifetime, realistically, will waste more money than buying a new car,” he tells CNBC. “It’s the single worst financial decision millennials will ever make.”
“That’s because the moment you drive it off the lot, the vehicle starts to depreciate: Your car’s value typically decreases 20 to 30 percent by the end of the first year and, in five years, it can lose 60 percent or more of its initial value.”
