Navigating the financial waters of adulthood can be a treacherous journey, with many potential pitfalls along the way. One such hazard, as highlighted by the cautionary tale of an Australian dad, is the allure of purchasing a brand-new car straight out of the dealership. Eric Ho Pham, a father from Reservoir in Melbourne's north, has come forward with a stark warning for young Aussies: buying a new car might be one of the worst financial decisions you can make.


Eric's story begins with the completion of his apprenticeship and the start of his career as a qualified electrician. Like many young professionals, the increase in income seemed like a green light to upgrade his lifestyle. He recalls the days when he would balance his tools on his motorbike, making do with what he had. But once qualified, the temptation of a shiny new vehicle proved too strong to resist.


At a Mazda dealership, Eric's eyes were drawn to a gleaming BT-50. The excitement of the moment, coupled with a lack of experience in car buying and the persuasive tactics of a salesman, led him to sign off on a $70,000 loan for the ute. At the time, the burden of a car loan didn't faze him; he felt confident that his salary could comfortably cover the repayments.


However, the reality of debt soon hit home. Eric found himself trapped by the financial commitment he had made. 'I was tied to the job, and that's when working didn't become fun anymore,' he lamented. The job that once brought him satisfaction had turned into a means to an end – servicing a debt that felt like a weight around his neck.

Now, as the owner of a clothing design business named Cruzado, Eric reflects on his past mistake and urges young drivers to opt for financial freedom over flashy wheels. 'Drive the cheapest, most reliable car that you can afford and save your money,' he advises. The pressure to impress with a high-end car is not worth the financial strain it can bring.

This sentiment is echoed by social media users who have shared their own experiences with car debt. Many feel that it has left them financially stagnant, unable to move forward with their lives. The consensus is clear: save diligently, plan carefully, and make smart purchases to maintain financial independence.


The statistics paint a concerning picture of Australians' love affair with new cars. Finder's Consumer Sentiment Tracker reported that around 12 percent of Australians – approximately 2.5 million people – had a car loan as of July 2024. The Australian Bureau of Statistics further revealed that total new vehicle lending reached a staggering $1.5 billion in the same month, marking an increase from the previous year.

Despite these figures, the country saw a record number of new vehicle purchases in 2024, with over 1.2 million new registrations. This trend underscores the importance of Eric's warning: the initial thrill of a new car can quickly be overshadowed by the long-term financial commitment it entails.

For our members here at the Seniors Discount Club, Eric's story serves as a reminder to approach major financial decisions with caution and foresight. Whether you're considering a new car or any other significant purchase, it's crucial to assess the impact it will have on your financial health and overall well-being.

Watch this video to learn about Eric’s full advice:


We invite you to share your thoughts and experiences with car ownership and debt. Have you ever felt the burden of a car loan, or have you found ways to avoid such financial traps? Your insights could help fellow members steer clear of similar pitfalls. Join the conversation in the comments below and let's navigate the financial journey together, with wisdom and prudence as our guides.