Expert explains why millionaires don't buy cars as she issues advice

Millionaires, according to property investment influencer Abi Hookway, almost never buy their cars outright.

In a TikTok video that’s racked up over 6.8 million views, she claims that the wealthy see vehicles as ‘depreciating assets’ and prefer to lease them instead.

Hookway points out that most people either purchase cars or take out loans, but she insists that the rich avoid doing either of these.

Her reasoning? Cars lose value, but assets like property can generate passive income to pay for the lease of a brand-new ride.

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She claims millionaires spend their money on assets

In her TikTok video, Hookway stood in a parking lot, and told her followers that contrary to popular belief, millionaires do not lease cars.

Instead, they buy assets with their money, which generates passive income.

With that passive income, millionaires then use the money to lease a brand new car.

Her reasoning is simple: while a a car loses value the moment you drive it off the lot, an appreciating asset, such as property or investments, can generate income that offsets the cost of a lease.

“Say it with me: We lease liabilities, we buy assets,” she declared.

Some financial experts agree with her logic.

CNBC has quoted self-made millionaire David Bach calling the purchase of a brand new car ‘the single worst financial decision millennials will ever make’.

Cars can lose as much as 20 percent of their value in the first year and up to 60 percent within five years, depending on make and model.

In fact, the Tesla Model S has topped a study measuring EV value loss over 10 years, and the actual depreciation numbers are pretty shocking.

Buying or leasing: The real trade-offs

However, whether you consider buying or leasing a car isn’t quite some simple.

While leasing avoids the sting of depreciation, it isn’t for everyone.

Many leases limit annual mileage, which is typically around 12,000 miles, and exceeding that can trigger costly penalties.

Lease agreements also require drivers to return the vehicle in good condition, with wear-and-tear charges possible at the end.

Buying, on the other hand, gives you ownership and the freedom to keep the car for as long as you want without monthly payments once it’s paid off.

Purchasing a lightly used model, ideally between three and five years old, can help buyers avoid the steepest depreciation.

However, a recent study shows that affordable used cars are basically disappearing, so this might be tough.

But the decision between buying or leasing ultimately comes down to lifestyle.

Those who value always having the newest models with the latest tech may lean toward leasing, while drivers focused on long-term cost savings often find buying a better financial move.

In any case, while she claims that millionaires never buy cars, it’s unlikely that the people who can afford to buy a McLaren Le Mans hypercar will be leasing it from the British carmaker.

If you go one step up, it’s also quite implausible that the Sultan of Brunei, who has $300 million worth of McLaren F1s alone, will ever be spotted leasing a car.

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