Take out finance or save up and just buy outright

[Justin Case]

My advice to OP - get the car, pay for it over three years say, but keep the car when you have finished paying for it and put the same amount into a savings account every month. I did this with the first decent car that I had; after another 18 months I had enough saved to buy the next car outright.

[TVRJAS]

Thank you WB,

I have a very large collection... Here is one of the beach i lived on. Bottle beach Kohphangan.

Which very unfortunately was just last week in the newspapers as a 5yr old french boy was killed by a box jellyfish.

I lived 10 years on that beach,have seen numerous types of jellyfish but a box is just so not supposed to happen. In 2002 there were some deaths by box jellyfish but 30kms south from my location.

Edited by TVRJAS on Monday 1st September 21:59

[djc206]

TVRJAS said:

Agreed if you buy a packet of 20... But many still spend £100 a week or more on alcohol,so stop the drink and they could lease a Jaguar XF.

Strange for me as I used to drink on a regular basis and could spend over £100 just on a Friday night including taxi.

I can go months without consuming any alcohol so for me it's a massive saving,and far more than if i quit the smoking. We all have our vices and pleasures in certain areas and if we didn't life could get pretty boring.

So OP... stop smoking stop drinking and stop looking at nicer cars and stop smiling and live a sad boring life

Do you enjoy the flavour of cigarettes? Genuine question I'm not taking the piss. Personally I love red wine, just polished off a bottle of Beaujolais and it was bloody lovely, the fact that's it's alcoholic is merely a bonus, I've never looked at smoking cigarettes in the same way, cigars are obviously different, that's about flavour.

[Welshbeef]

TVRJAS said:

Thank you WB,

I have a very large collection... Here is one of the beach i lived on. Bottle beach Kohphangan.

Which very unfortunately was just last week in the newspapers as a 5yr old french boy was killed by a box jellyfish.

I lived 10 years on that beach,have seen numerous types of jellyfish but a box is just so not supposed to happen. In 2002 there were some deaths by box jellyfish but 30kms south from my location.

Looks stunning what an amazing adventure - kudos to you.

[TVRJAS]

Welshbeef said:

Looks stunning what an amazing adventure - kudos to you.

I can assure you I have also had more than my fair share of crap hands dealt to me along the way which you wouldn't be envious of..

But thank you again.


DJC206

Seriously... yes i do but have been smoking rolling tobacco for many years even when living in Thailand where a pack of 20 was less than £1.

There is a different taste between rolling tobacco and a machine rolled cigarette,I find them a bit chemical flavored.

As said i'm not a teetotal and my preference is also a glass of red.. I notice the flavor difference same as you would buying a £4 box of red wine opposed to a "Night Harvest John George Cabernet Sauvignon, Margaret River, Australia 2010 or any quality wine opposed to a bottle/box of plop.

For me yes I like the taste but if you are a non smoker then i understand you finding it strange I think more people i meet are confused for my love of TVR than my smoking habbit

[Pit Pony]

Nervasport said:

ikarl said:

Why do you keep saying meggy?? What's a meggy?

Short for S-meg-ane

I've fixed that for you.

Lets treat the finance payments as RENTAL.

I think you should do the "stters Finance Challenge" - Lets say your monthly payments on your target car are £250 a month. Save £250 a month for 3 months. Then Buy the best stter for £750.

Then save £250 a month, and when the first stter dies, take the weigh in value, plus the money saved and buy another stter.

Now the last person I suggested this to, spent £700 on a 51 reg 2.0 Accord which was 5 months ago. and he NOW has a still working Accord, still worth about £700 and £1250 saved.

Assuming the accord lasts a year, He'll have the option to buy another £750 stter, or spend the full amount saved (£3000).

[vinnie83]

DJP said:

lauda said:

And where do you live whilst you're saving for the house?

Well, back in the day, one was something of a young entrepreneur and saved plenty of money while living with Mummy and Daddy.

I then bought my first house, sans mortgage, and saved for my next property whilst living there... and so on.

Can be done, y'know.

Edited by DJP on Friday 29th August 16:10

Baby boomers, you lot have a lot to answer for!

You really believe you could do that today in London?

ETA - can I nominate this for one of the most cringeworthy threads?

Seriously, people saying others are mugs for having mortgages? You were lucky chaps, property prices were far lower and the economy far kinder to you all.

Have some humility and stop being billy big balls on the forums trying to wave your mortgage free cards in peoples faces - well done, you were born at the right times.... You (most of you) weren't as smart as you think, believe me.... How much is your house worth now? Would you be quite so cocky if you had to start on the ladder now as a 20 year old or a recent graduate?

Grow up people...

Edited by vinnie83 on Tuesday 2nd September 01:16

[b0rk]

vinnie83 said:

Baby boomers, you lot have a lot to answer for!

You really believe you could do that today in London?

ETA - can I nominate this for one of the most cringeworthy threads?

Whilst it would be highly unlikely that someone could buy a first home mortgage free today within the M25. The market wasn't all roses back in the 70's, 80's or even most of the 90's remember interest rates where much higher at typical 8% to 10% and access to credit was far more regulated. Shared ownership didn't exist as a concept for example. You either rented with little safe guarding against properly evil landlords or purchased having saved a substantial deposit and accepted that interest rates would be high and variable. There where no cheap fixed rate "deals" to save borrowers from base rate increases.

I'm not a boomer BTW and do have a sizeable mortgage but do understand how difficult it was for my folks even when they had good incomes and safe jobs.

[vinnie83]

b0rk said:

vinnie83 said:

Baby boomers, you lot have a lot to answer for!

You really believe you could do that today in London?

ETA - can I nominate this for one of the most cringeworthy threads?

Whilst it would be highly unlikely that someone could buy a first home mortgage free today within the M25. The market wasn't all roses back in the 70's, 80's or even most of the 90's remember interest rates where much higher at typical 8% to 10% and access to credit was far more regulated. Shared ownership didn't exist as a concept for example. You either rented with little safe guarding against properly evil landlords or purchased having saved a substantial deposit and accepted that interest rates would be high and variable. There where no cheap fixed rate "deals" to save borrowers from base rate increases.

I'm not a boomer BTW and do have a sizeable mortgage but do understand how difficult it was for my folks even when they had good incomes and safe jobs.

I appreciate your POV, but I disagree - the usual arguments from baby boomers to defend themselves (I know you're talking parents generation)....

I would take a 10% interest rate and their property prices any day.... Yes, I know wages were also less but, the ratio of income to house prices were significantly better.

I think the average house price is now £250k+, the average salary £26.5k, that's nearly 10x the average income.

In 1980' average house price was approx £22k and average income about £8k - less than 3 x average income.

Even high interest rates don't account for very much of that difference!!

ETA my point isn't to belittle the struggles of those who worked hard to get what they have, but to point out to those cocky about having paid outright for properties and that those with mortgages must be idiots that it's hardly a fair comparison.

Edited by vinnie83 on Wednesday 3rd September 02:27

[Dr Jekyll]

b0rk said:

Whilst it would be highly unlikely that someone could buy a first home mortgage free today within the M25. The market wasn't all roses back in the 70's, 80's or even most of the 90's remember interest rates where much higher at typical 8% to 10% and access to credit was far more regulated. Shared ownership didn't exist as a concept for example. You either rented with little safe guarding against properly evil landlords or purchased having saved a substantial deposit and accepted that interest rates would be high and variable. There where no cheap fixed rate "deals" to save borrowers from base rate increases.

I'm not a boomer BTW and do have a sizeable mortgage but do understand how difficult it was for my folks even when they had good incomes and safe jobs.

Inflation was much higher in the 70s though. People would take out mortgage that seemed crippling at first, then after 3 years they would hardly notice it.

[Devil2575]

otolith said:

That's really the question - how do people on modest incomes justify the depreciation costs of new cars, however they fund them?

Why should they need to justify the depreciation costs?

If they can afford the car/repayments and still live comfortably then why does it matter? Lots of things we own depreciate, in fact pretty much the only thing that doesn't is a house. How do people justify spending 1k on a television or £500 on fridge etc? After all, these things are pretty much worthless after a few years.

[Devil2575]

0a said:

We're all different, but I could never imagine enslaving myself to finance for a car like that. Get onto the sub £1,000 bargains thread, there have been some great (and interesting!) cars there.

One poster just bagged himself an XJR!

Indeed, why enslave yourself to finance when you can become a slave of the filling station and your local car repairer

[Dr Jekyll]

Devil2575 said:

Why should they need to justify the depreciation costs?

If they can afford the car/repayments and still live comfortably then why does it matter? Lots of things we own depreciate, in fact pretty much the only thing that doesn't is a house. How do people justify spending 1k on a television or £500 on fridge etc? After all, these things are pretty much worthless after a few years.

A new car depreciates much more in a month that those items would in a year.

[daemon]

Dr Jekyll said:

A new car depreciates much more in a month that those items would in a year.

His point was "things depreciate"

If you've budgeted £200 for a car to get you reliably to work and the kids to school and to drive around in and you know there will be no unplanned maintenance bills what's the problem?

[Dr Jekyll]

daemon said:

Dr Jekyll said:

A new car depreciates much more in a month that those items would in a year.

His point was "things depreciate"

If you've budgeted £200 for a car to get you reliably to work and the kids to school and to drive around in and you know there will be no unplanned maintenance bills what's the problem?

The original point was 'how do people on modest incomes justify the depreciation', in other words the additional depreciation compared with a second hand car. So comparing with a new telly misses the point.

[otolith]

Devil2575 said:

otolith said:

That's really the question - how do people on modest incomes justify the depreciation costs of new cars, however they fund them?

Why should they need to justify the depreciation costs?

If they can afford the car/repayments and still live comfortably then why does it matter? Lots of things we own depreciate, in fact pretty much the only thing that doesn't is a house. How do people justify spending 1k on a television or £500 on fridge etc? After all, these things are pretty much worthless after a few years.

We are talking an entirely different scale of costs. You could change TVs several times a year for the depreciation costs of even a fairly modest new car. I don't mean "how do they justify the fact that it is lost to depreciation", I mean "how does someone on a modest income justify spending so much money on something of so little worth". It's obviously worth it to them, which is of course all that matters, but the opportunity cost is enormous relative to income. The issue is what they are getting for their money compared to what they could get for very much less money. Swallowing the first couple of years of depreciation on a car seems an extravagance disproportionate to the standard of living many people who do so enjoy.

[shalmaneser]

Nervasport said:

Test drove the Monte Carlo edition yesterday and my god it was brilliant! Seriously considering putting my deposit down ASAP!

This is a wind-up.

No one ever has said a Skoda Fabia 'Monte Carlo editon' is brilliant.

[vinnie83]

otolith said:

We are talking an entirely different scale of costs. You could change TVs several times a year for the depreciation costs of even a fairly modest new car. I don't mean "how do they justify the fact that it is lost to depreciation", I mean "how does someone on a modest income justify spending so much money on something of so little worth". It's obviously worth it to them, which is of course all that matters, but the opportunity cost is enormous relative to income. The issue is what they are getting for their money compared to what they could get for very much less money. Swallowing the first couple of years of depreciation on a car seems an extravagance disproportionate to the standard of living many people who do so enjoy.

Some people genuinely believe that a used car is bound to cost them thousands when it keeps breaking. Some want to impress the neighbours. Some want the convenience of walking into a showroom and pointing at something and saying "I want that one". Some are just suckers for salesmen.

There are a few examples of when new is a good option though.. When my father and I got our 911 turbo, used cars were ~5k cheaper than new cars, albeit with a 8 month wait. I figured I would rather wait the 8 months and spec to order (there's another reason some want new) and pay under 5% more for a brand new car.

I generally disagree with the economics of buying a new car - I always try to pick up something a lot older for similar money that is significantly more impressive! SL55 for under the cost of a well specced golf anyone?

[lord trumpton]

vinnie83 said:

b0rk said:

vinnie83 said:

Baby boomers, you lot have a lot to answer for!

You really believe you could do that today in London?

ETA - can I nominate this for one of the most cringeworthy threads?

Whilst it would be highly unlikely that someone could buy a first home mortgage free today within the M25. The market wasn't all roses back in the 70's, 80's or even most of the 90's remember interest rates where much higher at typical 8% to 10% and access to credit was far more regulated. Shared ownership didn't exist as a concept for example. You either rented with little safe guarding against properly evil landlords or purchased having saved a substantial deposit and accepted that interest rates would be high and variable. There where no cheap fixed rate "deals" to save borrowers from base rate increases.

I'm not a boomer BTW and do have a sizeable mortgage but do understand how difficult it was for my folks even when they had good incomes and safe jobs.

I appreciate your POV, but I disagree - the usual arguments from baby boomers to defend themselves (I know you're talking parents generation)....

I would take a 10% interest rate and their property prices any day.... Yes, I know wages were also less but, the ratio of income to house prices were significantly better.

I think the average house price is now £250k+, the average salary £26.5k, that's nearly 10x the average income.

In 1980' average house price was approx £22k and average income about £8k - less than 3 x average income.

Even high interest rates don't account for very much of that difference!!

ETA my point isn't to belittle the struggles of those who worked hard to get what they have, but to point out to those cocky about having paid outright for properties and that those with mortgages must be idiots that it's hardly a fair comparison.

Edited by vinnie83 on Wednesday 3rd September 02:27

Well you should have been born earlier then

Take London prices out of the equation and then see what the average price is. There are lots of amazing places and properties for a lot less than average. Thing is, most young people want everything on a stick and more these days (not referring to you vinnie83) and are not prepared to compromise.

[daemon]

vinnie83 said:

Some people genuinely believe that a used car is bound to cost them thousands when it keeps breaking. Some want to impress the neighbours. Some want the convenience of walking into a showroom and pointing at something and saying "I want that one". Some are just suckers for salesmen.

You're missing the main truth - some people like the idea of a monthly payment on a new car that wraps up depreciation, maintenance and moreoften servicing now into one set amount.

Its a convenience thing. They'll look for the best deal for their monthly budget.

Most other things these days are paid for monthly - mortgage, mobile phone, electic, heating, sky, broadband - and we get paid monthly so why not allocate a set amount to pay for a car?

Works for a lot of people.