How the hell do people afford cars these days?
Discussion
I genuinely think PCP is great for many people. A single mom can not deal with the hassle of finding a shed and chasing MOT or service for it on budget. It's a great product for them just give a sensible deposit and managable monthly payments, all inclusive, service warranty and etc. Repeat every 3-4 years without the hassle of car problems. Same for many self employed or business owners, can simply afford to use business lease or PCP, rather than drawing massive sums. It is always the balance though I also find it bizarre some young-ish chaps asking me for property financing or buying advice while they are spending massive sums on jags or LR monthly. * not to mention they keep breaking down so double crap show 
okgo said:
You make out like it’s some sort of voodoo to buy a decent used car. It really really isn’t.
Surely HP on something a touch older makes so much more sense?
I think for us*petrolheads yes, but for most, they really could not care less. They have never been interested in, so that's it. The amount of super basic car recommendation I gave to some colleagues at work, you would be suprised really and they are quite smart people.Surely HP on something a touch older makes so much more sense?
okgo said:
You make out like it’s some sort of voodoo to buy a decent used car. It really really isn’t.
Surely HP on something a touch older makes so much more sense?
Until it goes wrong?Surely HP on something a touch older makes so much more sense?
A four figure bill for a clutch or a head gasket or something can make a big dent in any savings.
Also 3 year old cars are not super cheap, and can depreciate a lot in the next 2 or 3 years.
Very often the new car can work out not that much more expensive.
Personally I think it can be wise not to have debt on anything that's out of warranty.
The car market is not one uniform thing, it varies across different sectors.
The way some people are banging on about ordinary median-earning people buying new cars, you'd think everyone was buying new.
It's really not like that, there are 30+ million cars in the UK and only 1.9 million new registrations last year.
Of those new cars, a very big slice were fleet buyers.
Also I don't think some people realise how much lots of people are paid. There are about 10 million people in the UK earning more than £40k a year.
Given that lots of people who buy new cars are older people who've beaten (or at least tamed?) their mortgage, it's not as if we're "on average" splurging too much on cars.
I know retired people who are probably on about £25k, house paid for, their cars and their holidays are their main indulgences.
I think we have more of a problem with the UK fleet ageing, and cars post about 2010 not being built to be cheap to run when they are old.
I'm sure there are a load of muppets who have committed too much on PCP, in conjunction with high rent or mortages and a modest income, but it's not that many people in the scheme of things.
The thing to understand is that most people are not buying/<paying monthly for> the cheapest thing that does the job, they are choosing to buy bigger newer shiny premium things when a Dacia would do the job.
okgo said:
I mean - there is right and wrong - tell me how that lady working reception, renting a house, and paying £600 a month out (likely a massive proportion of her post accommodation salary) for that X3 is anything other than completely stupid?
Have you bothered to read anyone's posts? Life choices. Perhaps she doesn't go clubbing or partying much, which would likely cost the same a month. Perhaps she doesn't dine out often.Show us a breakdown of your monthly expenditure, both now and when you were younger. No doubt there will be items some would class as unnecessary (or stupid).
okgo said:
SWoll said:
Knowing nothing else about her personal circumstances it's impossible to judge.
Maybe she's just young and enjoying life before eventually settling down? Maybe she's a divorcee sitting on a substantial settlement and isn't ready to commit to anything for a while? Maybe her parents are very well off and supporting her? Maybe she plans to snag a rich fella at some point and never work again? Maybe she already has but isnlt ready to move in with him yet? etc. etc.
Maybe. Probably not though. Maybe she's just young and enjoying life before eventually settling down? Maybe she's a divorcee sitting on a substantial settlement and isn't ready to commit to anything for a while? Maybe her parents are very well off and supporting her? Maybe she plans to snag a rich fella at some point and never work again? Maybe she already has but isnlt ready to move in with him yet? etc. etc.
Edited by SWoll on Monday 6th May 12:05
nickfrog said:
Maybe the story is not true in the first place. Quite an unlikely story IMO.
I used to sell cars. It’s not unusual at all for people to not be in a decent financial state but MUST have the car. I can’t tell you how many young and foolish buyers we had to use horrible rate finance on to get approved (no reputable lender would touch them). I worked for Audi for 5 years and the completely junk rates we used to put customers on just to get a new car was insane at times.
I worked in York and we used to get tons of customers from Harrogate as their Audi dealer in the 00's was dog s
t. Loads of fur coat, no knickers types that acted like the big shots until they failed Audi finance and we had to use 3rd parties to get them the car.
By the end of my tenure, you could spot them a mile off. Lots of them with decent £100k+ incomes but financed up to their eye balls and wanting to take on more because of shiny shiny.
I worked in York and we used to get tons of customers from Harrogate as their Audi dealer in the 00's was dog s
t. Loads of fur coat, no knickers types that acted like the big shots until they failed Audi finance and we had to use 3rd parties to get them the car. By the end of my tenure, you could spot them a mile off. Lots of them with decent £100k+ incomes but financed up to their eye balls and wanting to take on more because of shiny shiny.
Thought I’d look up some info on spend on car payments, sharing here in case of interest…
According to AM Online in March 2023, the average monthly payment for a personal contract purchase (PCP) is £432 with average deposit of £6,487.
This is somewhat more than what what Leasing.com recommended in October 2023, which was 10-15% of disposable income, and they propose the following cars by income…
According to AM Online in March 2023, the average monthly payment for a personal contract purchase (PCP) is £432 with average deposit of £6,487.
This is somewhat more than what what Leasing.com recommended in October 2023, which was 10-15% of disposable income, and they propose the following cars by income…
I think they need to update that 
It seems £600 buys you fk all. I imagine these days you need to throw a grand or more at it to get something interesting, not the behaviour id imagine someone on £70k is exhibiting?
Obviously the website is designed for a certain buyer hence they stopped at £70k.
It seems £600 buys you f
k all. I imagine these days you need to throw a grand or more at it to get something interesting, not the behaviour id imagine someone on £70k is exhibiting?Obviously the website is designed for a certain buyer hence they stopped at £70k.
I forget to mention. I remember back in 2015 or 2016, when Boxster GTS just came out you could really get one with super average monthlies on PCP and by the end of your period, most have positive equity in the car *more than GFV due to the popularity of that specific model (and low supply). There were a few models like these, People literally enjoyed these cars with good fun, as always with right financing and right car.
OutInTheShed said:
Until it goes wrong?
A four figure bill for a clutch or a head gasket or something can make a big dent in any savings.
Also 3 year old cars are not super cheap, and can depreciate a lot in the next 2 or 3 years.
Very often the new car can work out not that much more expensive.
Personally I think it can be wise not to have debt on anything that's out of warranty.
.
I'm not sure about that logic - a clutch is £1500 tops worst case, head gasket is unlikely on a 3-6 year old car. Yes I can see a modern car throwing up the odd c£2000 bill if you're unlucky which is a dent in savings, however compared to the cost of a new car and it's c40-60% depreciation in the first 3 years and the cost of finance those costs for a clutch etc are relatively small. A four figure bill for a clutch or a head gasket or something can make a big dent in any savings.
Also 3 year old cars are not super cheap, and can depreciate a lot in the next 2 or 3 years.
Very often the new car can work out not that much more expensive.
Personally I think it can be wise not to have debt on anything that's out of warranty.
.
In recent years where prices of cars have gone mad then I agree the costs of buying new vs second hand has been close but that was a one off event unlikely to happen again.
OutInTheShed said:
I think we have more of a problem with the UK fleet ageing, and cars post about 2010 not being built to be cheap to run when they are old.
.
This is a very good point and one I think about as well. Cars are so complex and borkage factor at +10 years old is enough to write it off. I find buying something 3/4 years old and running for 3-4 years is the sweat spot in cost to buy vs risk of bills. Usually these cars are within current ULEZ rules too. .
My current car was less than half of it's original value at 4 years old (Audi A4 estate). Even if the gearbox, steering rack, dpf, quattro system shat itself during my ownership it still wouldn't make up that 50% lost on buying it new.
VeeReihenmotor6 said:
This is a very good point and one I think about as well. Cars are so complex and borkage factor at +10 years old is enough to write it off. I find buying something 3/4 years old and running for 3-4 years is the sweat spot in cost to buy vs risk of bills. Usually these cars are within current ULEZ rules too.
My current car was less than half of it's original value at 4 years old (Audi A4 estate). Even if the gearbox, steering rack, dpf, quattro system shat itself during my ownership it still wouldn't make up that 50% lost on buying it new.
You seem to ignore the value of your time in fixing faults on an older car, even if you are not fixing them yourself, it's the time and effort to take it a trustworthy place to get it fixed. A lot of people seem to view costs of using a car as financial only, which is a flawed approach, unless of course, they place zero value on their time. My current car was less than half of it's original value at 4 years old (Audi A4 estate). Even if the gearbox, steering rack, dpf, quattro system shat itself during my ownership it still wouldn't make up that 50% lost on buying it new.
Speaking of "Sheds", this lovely Italian gone not bad (considering today's inflated prices)
https://www.swva.co.uk/classic-car/ferrari-f355-f1...
(Being LHD also another positive while ordering from drive through in Europe)
https://www.swva.co.uk/classic-car/ferrari-f355-f1...
(Being LHD also another positive while ordering from drive through in Europe
)I'm increasingly of the view that you are screwed whichever car-buying route you take.
Buy an older (10-15 years) car and it WILL throw up unforeseen bills and hassle. Even if this may be the cheapest option overall, it's tiresome getting in your car and wondering what this week's new dashboard warning light will be, and annoying to have to fork out several hundred pounds at random intervals throughout the year. It's also risky, as a bad failure that could write off the car is not impossible. If you are not buying cash, by the time you've paid off the small (say £5k) loan, the car may be worthless.
Anything newer (say 3 years old) still feels like very poor value for money since the pandemic - a basic econobox is £9k+, anything "premium" or more interesting £15k+. Monthly loan payments on those kind of sums are pretty significant, with high interest costs. You could also still lose a chunk of money in depreciation, particularly if you back the wrong fuel source. Faults and repairs, although rarer, are far from unheard of and the car may be out of warranty. 3 year old EVs are good value, but only relative to very high new prices and choice of models is still very limited.
Buy new (or PCP or lease new) and you pay through the nose for depreciation, with new car pricing having gone mental in the last couple of years. Dealers aren't interested in cash buyers. PCP's have crazy deposits and double digit interest rates. Barring the odd deal on something you have to convince yourself you want, leasing is £350+ for anything half decent that isn't a city car.
In short, cars are expensive things. You'll pay for the privilege of having one whichever route you pick.
Buy an older (10-15 years) car and it WILL throw up unforeseen bills and hassle. Even if this may be the cheapest option overall, it's tiresome getting in your car and wondering what this week's new dashboard warning light will be, and annoying to have to fork out several hundred pounds at random intervals throughout the year. It's also risky, as a bad failure that could write off the car is not impossible. If you are not buying cash, by the time you've paid off the small (say £5k) loan, the car may be worthless.
Anything newer (say 3 years old) still feels like very poor value for money since the pandemic - a basic econobox is £9k+, anything "premium" or more interesting £15k+. Monthly loan payments on those kind of sums are pretty significant, with high interest costs. You could also still lose a chunk of money in depreciation, particularly if you back the wrong fuel source. Faults and repairs, although rarer, are far from unheard of and the car may be out of warranty. 3 year old EVs are good value, but only relative to very high new prices and choice of models is still very limited.
Buy new (or PCP or lease new) and you pay through the nose for depreciation, with new car pricing having gone mental in the last couple of years. Dealers aren't interested in cash buyers. PCP's have crazy deposits and double digit interest rates. Barring the odd deal on something you have to convince yourself you want, leasing is £350+ for anything half decent that isn't a city car.
In short, cars are expensive things. You'll pay for the privilege of having one whichever route you pick.
Lil_Red_GTV said:
I'm increasingly of the view that you are screwed whichever car-buying route you take.
Buy an older (10-15 years) car and it WILL throw up unforeseen bills and hassle. Even if this may be the cheapest option overall, it's tiresome getting in your car and wondering what this week's new dashboard warning light will be, and annoying to have to fork out several hundred pounds at random intervals throughout the year. It's also risky, as a bad failure that could write off the car is not impossible. If you are not buying cash, by the time you've paid off the small (say £5k) loan, the car may be worthless.
Anything newer (say 3 years old) still feels like very poor value for money since the pandemic - a basic econobox is £9k+, anything "premium" or more interesting £15k+. Monthly loan payments on those kind of sums are pretty significant, with high interest costs. You could also still lose a chunk of money in depreciation, particularly if you back the wrong fuel source. Faults and repairs, although rarer, are far from unheard of and the car may be out of warranty. 3 year old EVs are good value, but only relative to very high new prices and choice of models is still very limited.
Buy new (or PCP or lease new) and you pay through the nose for depreciation, with new car pricing having gone mental in the last couple of years. Dealers aren't interested in cash buyers. PCP's have crazy deposits and double digit interest rates. Barring the odd deal on something you have to convince yourself you want, leasing is £350+ for anything half decent that isn't a city car.
In short, cars are expensive things. You'll pay for the privilege of having one whichever route you pick.
Funnily enough I'm having the exact same turmoil in my own head between selling the do-it-all for a more expensive 'do it all' in the 8-10 year old range, or simply buying a fun toy for the 20 year old car in the £5k range knowing it's going to throw expensive bills...Buy an older (10-15 years) car and it WILL throw up unforeseen bills and hassle. Even if this may be the cheapest option overall, it's tiresome getting in your car and wondering what this week's new dashboard warning light will be, and annoying to have to fork out several hundred pounds at random intervals throughout the year. It's also risky, as a bad failure that could write off the car is not impossible. If you are not buying cash, by the time you've paid off the small (say £5k) loan, the car may be worthless.
Anything newer (say 3 years old) still feels like very poor value for money since the pandemic - a basic econobox is £9k+, anything "premium" or more interesting £15k+. Monthly loan payments on those kind of sums are pretty significant, with high interest costs. You could also still lose a chunk of money in depreciation, particularly if you back the wrong fuel source. Faults and repairs, although rarer, are far from unheard of and the car may be out of warranty. 3 year old EVs are good value, but only relative to very high new prices and choice of models is still very limited.
Buy new (or PCP or lease new) and you pay through the nose for depreciation, with new car pricing having gone mental in the last couple of years. Dealers aren't interested in cash buyers. PCP's have crazy deposits and double digit interest rates. Barring the odd deal on something you have to convince yourself you want, leasing is £350+ for anything half decent that isn't a city car.
In short, cars are expensive things. You'll pay for the privilege of having one whichever route you pick.
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