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Novelty wears off, and I learned that before I turned 22, with a car I loved and a monthly payment I came to hate.
It’s one of the biggest money lessons I’ve ever learned, and I’m so glad it came early. I use it on most of my money decisions now.
In this post, I’ll tell you what happened with the car and explain why the excitement of a purchase fades. I’ll also cover how voluntary termination works if you ever want to hand a car back on finance, and the questions worth asking before any big spend.
I first shared this lesson in the first Matcha Mini on my Instagram, where I talk about money lessons while I make a matcha. I’ll admit I can’t talk and make a matcha at the same time.
My car finance story: from loving it to hating the payments
When I first got a car on finance, I was living at home and I could afford it. I was paying nearly £350 a month.
At first, that car was my baby. I loved it. It felt like the best thing ever.
Then the payments kept arriving and the feeling faded. I started to hate those payments. The car wasn’t giving me anywhere near the satisfaction it gave me at the start, and that’s when it clicked. Novelty wears off, and it wears off with everything.
I handed the car back as soon as I could. I almost did myself out of £10k by doing that. Then I found out about voluntary termination and handed it back at no cost. I explain how that works below. Your result depends on your own agreement, so please don’t assume it would match mine.
Since then, I’ve bought my cars outright. A monthly payment just doesn’t feel nice to me as a savvy lady.
Why the novelty wears off on big purchases
What is hedonic adaptation?
Psychologists call this hedonic adaptation. You will also see it called the hedonic treadmill. The basic idea is that people get used to a change, good or bad, and the emotional effect fades over time. The idea goes back to Brickman and Campbell in 1971, as a recent paper in Philosophical Psychology explains. The same paper argues that the term covers a range of different processes, so I won’t pretend there is one neat rule.
For spending, the useful point is simple. The thrill of something new is real. It is also short. The cost can last far longer.
Why a monthly payment makes it worse
With a one-off purchase, the cost is behind you by the time the excitement fades. With finance, it isn’t. My excitement peaked in the first weeks. The bill kept coming every month after that.
That mismatch is the trap. Each payment pulled my attention back to a car I had stopped noticing. Close to £350 a month adds up to around £4,200 a year.
If you want to see what a monthly amount like that could grow to if you saved it instead, try my free compound interest calculator. It’s an illustration, not a forecast. If you invest, your capital is at risk and returns are not guaranteed.
Voluntary termination: how to hand a car back on finance
Voluntary termination is the route that let me hand my car back. Here is how it works in general.
Who can use it and what it costs
It is a legal right under the Consumer Credit Act 1974. Section 99 lets you end a regulated hire purchase or conditional sale agreement by giving notice before the final payment falls due. Section 100 sets what you owe. If you have paid less than half of the total price, you pay the difference, unless your agreement asks for less.
MoneyHelper puts it in plain terms. You can return the car and end the contract once you have paid at least half of its value, and this works for both HP and PCP.
Half of what, exactly? The whole contract value. For a PCP, MoneyHelper says that includes the balloon payment, so you may only reach half near the end of the deal, if at all. If you have not reached half, you can pay the gap and then end the deal. If you have already paid more than half, you won’t get the extra back, according to MoneyExpert.
This right does not cover leases. MoneyHelper says you can’t end a Personal Contract Hire lease with voluntary termination.
What to check before you hand the car back
- You lose the car: You hand it back, so you need another way to get around.
- Condition matters: You must return the car in acceptable condition, and some companies try to charge for damage. Check your contract for wear and tear terms.
- Expect some pushback: The dealer loses out, so they may make it difficult. You are acting within your rights, and National Debtline has a template letter you can use to apply.
- Check your credit file: Moneybarn, a car finance lender, says voluntary termination shows on your credit report but shouldn’t affect your score if you haven’t missed repayments.
Ask your lender for a settlement figure and read the termination clause in your agreement before you decide. I’m not a financial adviser, and this is general information, not advice for your situation.
Is car finance worth it? Buying a car outright vs finance
Finance can be the right call. If you need a car and don’t have the cash, it may be the only realistic route. MoneyHelper’s guide to how to buy a car lists cash, borrowing, finance and leasing as the main options. It says paying cash is usually a good choice if you have the money to spare.
I buy mine outright because a monthly payment doesn’t feel nice to me. There is a money reason to think about too. A car loses value. A new car depreciates quickly and can be worth about half its original price within a few years.
If you do use finance, know the two main types. MoneyHelper calls PCP popular with dealers but quite complicated. You pay a deposit and monthly payments, then choose whether to make a large balloon payment to own the car. It adds that people often move onto a new PCP at the end rather than make that final payment. That is the novelty cycle built into a contract. HP is simpler. You own the car at the end, and it is often better value overall because you usually pay a bit less interest.
Look at the total amount payable on any agreement, not only the monthly figure. That total is also the number a voluntary termination is based on.
Running costs matter as well. Insurance, tax, fuel, MOTs and repairs all sit on top of the payment. I broke down what a family SUV costs to run in a car review. If you want to see where a payment would sit in your month, my post on how to budget without a spreadsheet is a low-effort place to start.
How to tell if the novelty will wear off before you buy
I can’t tell you which purchases will still feel good in a year. Sometimes the answer is yes, and sometimes it’s no. What I can do is give you a few questions that help you tell the difference.
Questions to ask before a big purchase
- Will I still want this in six months, on an ordinary day? Picture the boring version, not the day it arrives.
- What will it cost each month, and for how long? A payment can last far longer than the excitement.
- Does it solve something I deal with every week? Something you use constantly keeps earning its place after the shine goes.
- Could a day out, or something I already own, give me the same lift? In two surveys, Van Boven and Gilovich found that people said experiences made them happier than material purchases. That doesn’t make everything a bad buy, but it’s a useful nudge.
The same thinking helps with smaller, seasonal spending. My article on how to enjoy autumn without spending money is a good example.
When the answer is yes
Novelty wearing off doesn’t mean you should never buy anything. A car you need for work or the school run can be worth every penny once the shine wears off. The lesson is about buying on purpose. If you decide something is worth it, decide with the monthly cost in your head, then enjoy it without guilt.
It’s also normal to feel flat after a big win. I wrote about a similar pattern with goals in how to celebrate financial wins, where the lift is brief, and you soon return to your usual baseline.
Questions about novelty and spending
Why do I get bored of things I buy?
Psychologists call it hedonic adaptation. You get used to a change, and the emotional boost fades. It’s a common human pattern, not a personal failing.
Can you hand a car back on finance without paying extra?
You can if it’s a regulated HP or PCP agreement and you have already paid half of the total amount payable. If you haven’t, you pay the gap to reach half. Check your agreement and ask your lender for a settlement figure.
Is it cheaper to buy a car outright than on finance?
Often, because you avoid interest. But a new car loses value quickly whichever way you pay. Keep savings ready for unexpected costs. Compare the total cost, not just the monthly payment.
The money lesson in one line
Novelty wears off, and the bill doesn’t. Before you buy something big, picture how you’ll feel about it when it’s ordinary. If the answer is yes, spend with a clear head. In my experience, most times it’s no.
What’s something you bought that lost its shine? Tell me in the comments.
If you want more ideas, have a browse through more ways to save money or more money mindset posts.
