Justifying an "expensive" car purchase...

Justifying an "expensive" car purchase...

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Discussion

Deva Link

26,934 posts

244 months

Friday 13th July 2012
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Biccaroo said:
You make some good points. How do so many people justify buying new cars though? They depreciate as soon as they roll off the forecourt! What I'm trying to get my head around is the purchase of, for example, a basic Ford Fiesta hatchback. Now, this'll cost about £9,795 new. So, you buy the car, drive it home and already it's lost £500-£1000. This is commonplace. Lots of people spend this sort of money on cars that are really not that special at all. So, why is buying a 6-year-old Porsche Boxster more of a risk or less appealing? It seems that it's one rule for sensible cars such as the Fiesta, another for exotica like a Porsche?
It's only lost £500-£1000 (probably more in reality) if you try and sell it. Keep it 5yrs and in good nick and reasonable mileage it could be worth £4K, so it's lost £100/mth.

Buying a 6yr old Boxster is a completely different kettle of fish from an road tax, insurance, service and maintenance point of view. If you could buy one at 6yrs old and then run it as if it was brand-new, then no-one would ever buy new ones. They're cheap for a reason.

Herbs

4,912 posts

228 months

Friday 13th July 2012
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Elise all day long - everybody should own one at some point in their life smile

It sets some very good bars and is extremely hard to beat for handling and MPG (compared to other sports cars) as well as running costs.

McAndy

12,339 posts

176 months

Friday 13th July 2012
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kambites said:
Marginally, yes. If you're not sure about whether to spend the money though, I'd stick with what you have. Personally, I think the MR2 is a better drivers' car than the 350Z, Boxster or 3-series and it's not a million miles behind the Elise.
I've owned the MR2 and driven the Elise (S2 variant) and 3-series and I concur.

If you want something more practical then buy the 3-series. If you want a toy then any of the others will do. It's your dough and only your conscience can give yourself the 'permission' to spend it! thumbup

Lordglenmorangie

3,053 posts

204 months

Friday 13th July 2012
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Luke. said:
I hate to piss on your chips, but most people will say get a mortgage instead.
Most people are boring farts, that think they are on the planet for ever , get the car of your dreams biggrin

james_gt3rs

4,816 posts

190 months

Friday 13th July 2012
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LuS1fer said:
Why not just buy a newer MR2?
confused Why would you do this...?

Debaser

5,665 posts

260 months

Friday 13th July 2012
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Deva Link said:
Biccaroo said:
You make some good points. How do so many people justify buying new cars though? They depreciate as soon as they roll off the forecourt! What I'm trying to get my head around is the purchase of, for example, a basic Ford Fiesta hatchback. Now, this'll cost about £9,795 new. So, you buy the car, drive it home and already it's lost £500-£1000. This is commonplace. Lots of people spend this sort of money on cars that are really not that special at all. So, why is buying a 6-year-old Porsche Boxster more of a risk or less appealing? It seems that it's one rule for sensible cars such as the Fiesta, another for exotica like a Porsche?
It's only lost £500-£1000 (probably more in reality) if you try and sell it. Keep it 5yrs and in good nick and reasonable mileage it could be worth £4K, so it's lost £100/mth.

Buying a 6yr old Boxster is a completely different kettle of fish from an road tax, insurance, service and maintenance point of view. If you could buy one at 6yrs old and then run it as if it was brand-new, then no-one would ever buy new ones. They're cheap for a reason.
I owned a 986S for 18 months, when I got it it was about 6 years old. Adding up all costs (including petrol for 1000 miles a month) it cost me £18000 to run.

It's the running costs of older performance cars you need to consider.

Fastdruid

8,623 posts

151 months

Friday 13th July 2012
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Debaser said:
Deva Link said:
Biccaroo said:
You make some good points. How do so many people justify buying new cars though? They depreciate as soon as they roll off the forecourt! What I'm trying to get my head around is the purchase of, for example, a basic Ford Fiesta hatchback. Now, this'll cost about £9,795 new. So, you buy the car, drive it home and already it's lost £500-£1000. This is commonplace. Lots of people spend this sort of money on cars that are really not that special at all. So, why is buying a 6-year-old Porsche Boxster more of a risk or less appealing? It seems that it's one rule for sensible cars such as the Fiesta, another for exotica like a Porsche?
It's only lost £500-£1000 (probably more in reality) if you try and sell it. Keep it 5yrs and in good nick and reasonable mileage it could be worth £4K, so it's lost £100/mth.

Buying a 6yr old Boxster is a completely different kettle of fish from an road tax, insurance, service and maintenance point of view. If you could buy one at 6yrs old and then run it as if it was brand-new, then no-one would ever buy new ones. They're cheap for a reason.
I owned a 986S for 18 months, when I got it it was about 6 years old. Adding up all costs (including petrol for 1000 miles a month) it cost me £18000 to run.

It's the running costs of older performance cars you need to consider.
Yes but include petrol and I've spent over 12k on petrol alone on a mondeo!

The Moose

22,821 posts

208 months

Friday 13th July 2012
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What about a nice Mk1 Audi TT 225 - reasonable insurance, VED, economy, performance available for about half your budget. Tesco are doing an interest free for 16 months period so buy it on that (the bit you were going to borrow for anyway) and pay that off.

It's not that I've just bought one of those or anything whistle

Jasandjules

69,825 posts

228 months

Friday 13th July 2012
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I use the old

"you only live once"

Method.

Biccaroo

Original Poster:

393 posts

215 months

Friday 13th July 2012
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Debaser said:
I owned a 986S for 18 months, when I got it it was about 6 years old. Adding up all costs (including petrol for 1000 miles a month) it cost me £18000 to run.

It's the running costs of older performance cars you need to consider.
£18,000 to run a 986 S over 18 months?? Are you kidding me?! That's got to be a joke. Also, I do nowhere near 1000 miles/month. 500 max.

TwigtheWonderkid

43,248 posts

149 months

Friday 13th July 2012
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I hate to be a bore but....never borrow money to buy a depreciating asset. (Unless it is necessary to make money, like a suit for an interview, or a taxi if you're a cab driver.)

Making this lifestyle choice may cause you pain in the short term, but in the medium to long term you will be far wealthier and probably end up with better cars than most, paid for in full!

otherman

2,190 posts

164 months

Friday 13th July 2012
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Here's my two part test

do you want one?

can you afford it?

two yes's is all you need to justify any purchase

Biccaroo

Original Poster:

393 posts

215 months

Friday 13th July 2012
quotequote all
TwigtheWonderkid said:
I hate to be a bore but....never borrow money to buy a depreciating asset. (Unless it is necessary to make money, like a suit for an interview, or a taxi if you're a cab driver.)

Making this lifestyle choice may cause you pain in the short term, but in the medium to long term you will be far wealthier and probably end up with better cars than most, paid for in full!
But surely people are "borrowing" against a depreciating asset every time they purchase on finance? And there are lots of people who buy used cars having acquired a loan. Are these people just being foolish then? I'm not saying you're wrong, just questioning the difference. I do actually agree with what you're saying, but this is where people differ greatly. Some want to enjoy the here and now whereas others are happy to wait, play it safe, save and fully enjoy life later on.

Biccaroo

Original Poster:

393 posts

215 months

Friday 13th July 2012
quotequote all
otherman said:
Here's my two part test

do you want one?

can you afford it?

two yes's is all you need to justify any purchase
Yes, I want one. Yes, I can afford one. Can I justify it? No! wink

Debaser

5,665 posts

260 months

Friday 13th July 2012
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Biccaroo said:
Debaser said:
I owned a 986S for 18 months, when I got it it was about 6 years old. Adding up all costs (including petrol for 1000 miles a month) it cost me £18000 to run.

It's the running costs of older performance cars you need to consider.
£18,000 to run a 986 S over 18 months?? Are you kidding me?! That's got to be a joke. Also, I do nowhere near 1000 miles/month. 500 max.
I can't really remember the exact figures, but if I take out the petrol then it cost £14500 over 18 months. Remember petrol costs more now than it did a few years ago too.

You'll be able to run one for less than mine cost, especially if you're not too bothered about the quality of the parts you use (using cheaper tyres and brakes would have saved me a lot). I had a Porsche warranty on mine which probably cost about £1000 a year, but it meant I used main dealers for everything.

I decided to get rid when I took it in for a major service and the bill was a third of the value of the car.

Teocali

235 posts

186 months

Friday 13th July 2012
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Biccaroo said:
But surely people are "borrowing" against a depreciating asset every time they purchase on finance? And there are lots of people who buy used cars having acquired a loan. Are these people just being foolish then? I'm not saying you're wrong, just questioning the difference. I do actually agree with what you're saying, but this is where people differ greatly. Some want to enjoy the here and now whereas others are happy to wait, play it safe, save and fully enjoy life later on.
Yes most people are but that doesn't make it a good idea!

I speak as someone with a car loan and with a car thats depreciating faster than I am paying it off - having come from a car I owned outright. With hindsight I wouldn't have bothered.

On the flip side you are unlikely to suffer new car levels of depreciation with your selections and £400pa interest beats a 4 year wait in my book.....

Totally depends on the person and their attitude to debt. Just make sure its for something special not a tarted up FIAT wink

HeatonNorris

1,649 posts

147 months

Friday 13th July 2012
quotequote all
TwigtheWonderkid said:
I hate to be a bore but....never borrow money to buy a depreciating asset. (Unless it is necessary to make money, like a suit for an interview, or a taxi if you're a cab driver.)

Making this lifestyle choice may cause you pain in the short term, but in the medium to long term you will be far wealthier and probably end up with better cars than most, paid for in full!
This.

Get the house paid off ASAP - mortgage rates are low, so you can make some massive inroads into clearing the debt in a much shorter timescale than may be possible in the future.

The odds are you're going to be earning significantly more money in 20 years time, so if you're debt free at that point, you will have silly amounts to spend on toys.

My theory, though, is lots of cheaper toys, rather than one expensive one.

Debaser

5,665 posts

260 months

Friday 13th July 2012
quotequote all
Biccaroo said:
£18,000 to run a 986 S over 18 months?? Are you kidding me?! That's got to be a joke. Also, I do nowhere near 1000 miles/month. 500 max.
And you won't suffer as much depreciation as I did.

I'm just saying you need to get a good idea of what your new car will cost to run and make sure you're happy with the costs.

FLGirl

1,177 posts

190 months

Friday 13th July 2012
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HeatonNorris said:
This.

Get the house paid off ASAP - mortgage rates are low, so you can make some massive inroads into clearing the debt in a much shorter timescale than may be possible in the future.

The odds are you're going to be earning significantly more money in 20 years time, so if you're debt free at that point, you will have silly amounts to spend on toys.

My theory, though, is lots of cheaper toys, rather than one expensive one.
He doesn't have a house biggrin

But your last point is most salient. If you're comfortable with the monthly payments but it still feels like a 'spend', I'd hazard a guess that any big bills (hello Porsche...!) will start to become a burden. You sound a bit like me in terms of research and thinking things through, and what marred my ownership experience of a relatively expensive sports car (yes, you, Porsche, again!) was the nagging worry in my mind of something going wrong.

I hated parking in public places, potholed roads, being asked to drive through heavy traffic to give lifts etc... It was my only car, ergo very fun but impractical and eventually I began to resent running it.

Now I own 2 cars worth around 15% of what I spent on the expensive car, but I have at least 100% more fun! Ironically I now have the income to justify a much more expensive car, but it doesn't appeal in the slightest.

I don't regret it for a second, but my petrolhead lust is more than sated at the moment. You could buy a really fun car that you never have to worry about for less than £4k. If you need practical, buy a snotter for £500 and rag it around. Added bonus = some savings for the (eventual) mortgage and no need to "justify" your choices. More is not always better.

That said - early 996s are well within your budget and I'd (almost) recommend one wink