Anyone into cars but not credit?

[Butter Face]

BigLion said:

Exactly, but these guys are so hooked on their debt fuelled cars they are unable to see clearly.

Let's take a BMW M4 lease as an example - so all the clever debt hungry people on here, what's the cost over 3 years plus the initial payment? Say 8k as initial and then £800 quid a month - so what is that in total over 3 years?

Someone please put the answer down.

Then rinse and repeat over a cycle of 3 car purchases over a 9 year period and put that figure down too (so we have a total 9 year cost)

Then tell me that is a sensible decision to take when you're renting.

Let's get it right. £6k down then 36x £646.80 so over 3 years it's £29,284.80.

Do that 3 times (so over 9 years) and you've spent £87,854.40 to have a new M4 (or whatever) for 108 months of your life. £813.46 all in.

Let's say over that 9 years your average income is £4K net (because you're the right person to buy an M4. But you're working your way up the ladder)

Your income over the same term is £432k, so you're spending 20% of your net income to drive a 425bhp car, which obviously you want to do because you enjoy it. Seems legit.

[daemon]

Granfondo said:

daemon said:

gizlaroc said:

Granfondo said:

Wasn't there someone on here telling us that every estate agent he knew rented because you can get a better house to live in than you can afford to own!
A bit like PCP/lease for a lot of people!

What I don't remember if I said was they also own multiple properties that they rent out, just they are much cheaper to buy and give much better returns.

I am not talking about the people working there, I am taking about the business owners. I haven't got a clue whether their staff/team do similar.

Thats in line with my experience. Theres probably nobody better placed to snap up a cheap house to rent out than an estate agent.

Even in one of the most unethical industries going this I thought was a definite

Edited by Granfondo on Tuesday 25th October 19:35

Maybe it is. As i said, the guy i know has bought up and sold a string of houses over the years. I'm sure he didnt pay over the odds for too many of them. Whether or not any of them were purchased in an unethical way, i dont know.

But lets be honest, if a house is on the market even with another agent, chances are hes going to be better placed to know if its the "right" house at the "right" price, than someone just jumping in there and hoping for the best.

[Devil2575]

twoblacklines said:

daemon said:

+1

I dont lease for similar reasons, however i can see that for a lot of people it makes sense.

Can't you also see that for a lot of people, it makes no sense, yet they still do it anyway?

Just as it probably makes no sense for some people to spend a large chunk of cash on a car, yet they still do it anyway. I mean lets be honest, how many people on PH buy cars that from a logical perspective make no sense?

[ChasW]

RSK21 said:

ChasW said:

Possible as an alarming number of posters forget the etiquette of discussion and debate. There's a distinct correlation between the facile responses and unecessary insults and the camp people align themselves to.

I think that's a biased view, it's not about camps because to me that implies for or against. I haven't seen a poster yet state that finance products are de facto the best way to buy a car. What I have seen is several people say that dependent on circumstances a financial product may be the optimum way to secure a new car. In return I have seen numerous attempts to either debunk this in its entirety (by using generic rather than specific examples), and in some cases a blanket assertion that car finance is dangerous and the preserve of fools.

It is beyond frustrating when people try to post a balanced view, repeatedly being clear that it is an issue of circumstances, situation and specific opportunities and not a one size fits all and others simply refuse to accept that and come out with what is frankly nonsense laced with personal prejudice.

Edited by RSK21 on Tuesday 25th October 11:24

It is clearly about camps. Although the OP started the thread by sharing his feelings that he's being sneered at for owning a modest car by his peers/friends who drive flashy newer financed vehicles, two strands have developed. There are people on this thread who discuss the maths in a given scenario of obtaining a car. That is one strand and it's about the numbers. There is another strand about the wisdom, risks and implications of financing per se. In each strand there is essentially a for and against position which is the basis of a healthy debate and is one reason why forums exist in the first place. I'll put my cards on the table now in that I am in the "finance comes with a health warning" camp. I worry that people are lured into driving beyond their means by the ease of access to finance and clever marketing. It's not that I am against anyone "living their motoring dream" but not if there is a price to be paid later. At the end of the day it's their choice and each to their own. I also have to confess that after owning 20+ cars outright in my driving life I will probably rent my OH's next new car as the maths make it a no brainer. What annoys me, and is the basis of my previous post, is that many of those defending the finance camp do so in such an offensive unconstructive manner. Responses range from

1. I do/don't agree (fair enough you have not added to the debate but in a way you have voted, a contribution albeit minor)
2. I don't agree and you are a b*ll*end for holding such opinions (as juvenile as one can get and adding nothing)
3. "Each to their own" (a way to reconcile many discussions but not adding any new insights that may move it on)
4. A reasoned argument (this adds to, and may inform the debate/discussionand move it on)

In reality there is probably prejudice on both sides but the responses that fall into category 2 would warrant creating a Kindergarten PH for those who need to grow up and learn to behave and post like adults.

[Granfondo]

Butter Face said:

BigLion said:

Exactly, but these guys are so hooked on their debt fuelled cars they are unable to see clearly.

Let's take a BMW M4 lease as an example - so all the clever debt hungry people on here, what's the cost over 3 years plus the initial payment? Say 8k as initial and then £800 quid a month - so what is that in total over 3 years?

Someone please put the answer down.

Then rinse and repeat over a cycle of 3 car purchases over a 9 year period and put that figure down too (so we have a total 9 year cost)

Then tell me that is a sensible decision to take when you're renting.

Let's get it right. £6k down then 36x £646.80 so over 3 years it's £29,284.80.

Do that 3 times (so over 9 years) and you've spent £87,854.40 to have a new M4 (or whatever) for 108 months of your life. £813.46 all in.

Let's say over that 9 years your average income is £4K net (because you're the right person to buy an M4. But you're working your way up the ladder)

Your income over the same term is £432k, so you're spending 20% of your net income to drive a 425bhp car, which obviously you want to do because you enjoy it. Seems legit.

So a person earring £71k gross a year can afford to lease an M4 shocker!!!

[daemon]

ChasW said:

In reality there is probably prejudice on both sides but the responses that fall into category 2 would warrant creating a Kindergarten PH for those who need to grow up and learn to behave and post like adults.

I havent seen any prejudice on the "side" of those people who believe that leasing / PCP deals "can" be an effective way of driving a car.

That same "side" also are merely saying that there are many options available and that people can look at those options and pick the best one to suit their particular circumstance.

I think thats a reasonable stance and not prejudiced. If people want to buy cars with cash, then cool. Heck, i do it myself at times too.

We are not debt hungry monsters, merely people who advocate looking at all the options.

The prejudice almost exclusively comes from those who view those who buy with anything other than cash as "debt hungry" and "stupid" and only interested in the shiny shiny and are likely to end up bankrupt and destitute.

THAT is a prejudiced viewpoint - all I and others have done is to push back on those prejudices and challenge peoples prejudiced views.

[nickfrog]

ChasW said:

It is clearly about camps.

No it's not, it's about rationale.

I own one of my car - I lease another one : please tell me what camp I am in. Serious question.

[daemon]

Devil2575 said:

twoblacklines said:

daemon said:

+1

I dont lease for similar reasons, however i can see that for a lot of people it makes sense.

Can't you also see that for a lot of people, it makes no sense, yet they still do it anyway?

Just as it probably makes no sense for some people to spend a large chunk of cash on a car, yet they still do it anyway. I mean lets be honest, how many people on PH buy cars that from a logical perspective make no sense?

And therein lies the fatal flaw - "i always buy with cash". Oh, so does that mean your car doesnt depreciate and cost you a significant amount of money anyway?

[rxe]

Granfondo said:

So a person earring £71k gross a year can afford to lease an M4 shocker!!!

I'll put it a slightly different way.

A person earning 71k gross takes home 48k.

Is it sane for someone taking home £48k to buy (whether lease or outright purchase) a car costing north of £60k when you start to option it up?

Now if that person has no other obligations .... maybe. But most people have obligations (such as paying for the roof over their head).

In the absence of finance, the answer would be a resounding no, unless you were a single person who'd paid off their house already. As 30 pages of postings have showed us, there is sod all difference between finance and purchase, so why does finance make so much sense?

[anonymous-user]

nickfrog said:

No it's not, it's about rationale.

I own one of my car - I lease another one : please tell me what camp I am in. Serious question.

Exactly

My very point

I have seen people implying and I paraphrase "financing is bad full stop all cars should be purchased outright " but I don't recall anybody implying "buying outright is bad all cars should be procured using some form of finance".

So maybe I see am overthinking it and seeing camps as meaning opposing rather than merely different entities. What I am confident in saying though is that i honestly haven't seen two diametrically opposed views here and I think that the use of the word "rationale" very neatly sums up one of those positions.

[Granfondo]

rxe said:

Granfondo said:

So a person earring £71k gross a year can afford to lease an M4 shocker!!!

I'll put it a slightly different way.

A person earning 71k gross takes home 48k.

Is it sane for someone taking home £48k to buy (whether lease or outright purchase) a car costing north of £60k when you start to option it up?

Now if that person has no other obligations .... maybe. But most people have obligations (such as paying for the roof over their head).

In the absence of finance, the answer would be a resounding no, unless you were a single person who'd paid off their house already. As 30 pages of postings have showed us, there is sod all difference between finance and purchase, so why does finance make so much sense?

Coz it gets you into cars you can't afford to own!
PCP/lease not HP which at least gets you there in the end!

[CS Garth]

This thread isn't really about leasing. It's about people choosing to prioritise how they spend their monies in different ways.

Regardless, the Evening Standard had a piece tonight saying that even if car costs increased due to sterling stting itself the manufacturers would simply offset this amount by reducing interest on finance. Now I'm as against debt fuelled over leveraging as much as the next right wing middle class Telegraph reader but this does suggest we are likely to see more, not less, of leasing in the short term. What happens after that - fk knows

[Devil2575]

daemon said:

The prejudice almost exclusively comes from those who view those who buy with anything other than cash as "debt hungry" and "stupid" and only interested in the shiny shiny and are likely to end up bankrupt and destitute.

THAT is a prejudiced viewpoint - all I and others have done is to push back on those prejudices and challenge peoples prejudiced views.

This.

[daemon]

rxe said:

Granfondo said:

So a person earring £71k gross a year can afford to lease an M4 shocker!!!

I'll put it a slightly different way.

A person earning 71k gross takes home 48k.

Is it sane for someone taking home £48k to buy (whether lease or outright purchase) a car costing north of £60k when you start to option it up?

Now if that person has no other obligations .... maybe. But most people have obligations (such as paying for the roof over their head).

In the absence of finance, the answer would be a resounding no, unless you were a single person who'd paid off their house already. As 30 pages of postings have showed us, there is sod all difference between finance and purchase, so why does finance make so much sense?

If i was (only?) on £71K, i'd find it hard to justify leasing or saving and buying outright a £60K car, irrespective of my outgoings.

And if you did buy a £60K outright thats going to depreciate, you're not going to be able to sustain that when you're due a change anyway.

Therefore i'm inclined - in this example - to agree with you. Once you factor in depreciation and setting aside monies to replace the car like with like, someone on £71K gross a year leasing / buying / PCPing / Financing an M4 probably cant afford it.

Edited by daemon on Tuesday 25th October 20:42

[anonymous-user]

Granfondo said:

Coz it gets you into cars you can't afford to own!
PCP/lease not HP which at least gets you there in the end!

Where do you stand on 0% pcp ?

[BigLion]

Butter Face said:

BigLion said:

Exactly, but these guys are so hooked on their debt fuelled cars they are unable to see clearly.

Let's take a BMW M4 lease as an example - so all the clever debt hungry people on here, what's the cost over 3 years plus the initial payment? Say 8k as initial and then £800 quid a month - so what is that in total over 3 years?

Someone please put the answer down.

Then rinse and repeat over a cycle of 3 car purchases over a 9 year period and put that figure down too (so we have a total 9 year cost)

Then tell me that is a sensible decision to take when you're renting.

Let's get it right. £6k down then 36x £646.80 so over 3 years it's £29,284.80.

Do that 3 times (so over 9 years) and you've spent £87,854.40 to have a new M4 (or whatever) for 108 months of your life. £813.46 all in.

Let's say over that 9 years your average income is £4K net (because you're the right person to buy an M4. But you're working your way up the ladder)

Your income over the same term is £432k, so you're spending 20% of your net income to drive a 425bhp car, which obviously you want to do because you enjoy it. Seems legit.

So you buy a base m4 - ok let's go with that example. So say approx 10 grand a year to OWN (NOT RUN) - let's assume higher rate tax payer, NI contributions etc. - so very simplistically let's call that £20k of gross salary.

Say someone is earning 50k a year - they almost have to work 6 months of each year to simply pay for the car. Or put another way, they can take 6 months career break a year in place of having a M4.

9 years and 100k later - you have no equity in any car or property if renting.

Yes you can top and tail the figures - but the reality is if you guys think that is a great idea, then please carry on and get your next hit of debt. I'm sure the finance houses staff love you when bonus time comes around !!!

[Granfondo]

RSK21 said:

Granfondo said:

Coz it gets you into cars you can't afford to own!
PCP/lease not HP which at least gets you there in the end!

Where do you stand on 0% pcp ?

Further up the thread Daemon had a story about 0% deal but you could get £6k discount so the guy was a mug to use the PCP! HTH.

[daemon]

BigLion said:

So you buy a base m4 - ok let's go with that example. So say approx 10 grand a year to OWN (NOT RUN) - let's assume higher rate tax payer, NI contributions etc. - so very simplistically let's call that £20k of gross salary.

Say someone is earning 50k a year - they almost have to work 6 months of each year to simply pay for the car. Or put another way, they can take 6 months career break a year in place of having a M4.

9 years and 100k later - you have no equity in any car or property if renting.

Yes you can top and tail the figures - but the reality is if you guys think that is a great idea, then please carry on and get your next hit of debt. I'm sure the finance houses staff love you when bonus time comes around !!!

I personally dont think its a good idea. Likewise i dont think buying a new M4 on that sort of wage is a good idea either.

I certainly wouldnt advocate either.

I am sure there are exceptional circumstances why some people "might" chose to lease one on that salary or splurge £60K of their own hard earned / inheritance / windfall on one, but its not sustainable on that sort of salary.

[anonymous-user]

BigLion said:

So you buy a base m4 - ok let's go with that example. So say approx 10 grand a year to OWN (NOT RUN) - let's assume higher rate tax payer, NI contributions etc. - so very simplistically let's call that £20k of gross salary.

Say someone is earning 50k a year - they almost have to work 6 months of each year to simply pay for the car. Or put another way, they can take 6 months career break a year in place of having a M4.

9 years and 100k later - you have no equity in any car or property if renting.

Yes you can top and tail the figures - but the reality is if you guys think that is a great idea, then please carry on and get your next hit of debt. I'm sure the finance houses staff love you when bonus time comes around !!!

You keep saying guys or these guys

Who do you mean ?

You never answered the q about your mate who earns enough money to splurge £800 a month on an m4/c63 and matching watch and trainer set. How does somebody with little common sense get paid what's probably a fairly handsome whack ?

[daemon]

Granfondo said:

RSK21 said:

Granfondo said:

Coz it gets you into cars you can't afford to own!
PCP/lease not HP which at least gets you there in the end!

Where do you stand on 0% pcp ?

Further up the thread Daemon had a story about 0% deal but you could get £6k discount so the guy was a mug to use the PCP! HTH.

He didnt. I said he used a 0% finance deal couple with cash to buy the car. It was an HP deal.

He thought just because it was 0% he was getting a great deal. Forgetting to "do his homework" on the price of it...

daemon said:

I saw another thread on MSE a while ago where a bloke laughed at those who took out loans / PCP deals to buy cars, as he, personally only ever [u]bought[/u] with a combination of cash and 0% finance. It turns out the car he'd bought - a Peugeot 308 CC 2.0 Diesel - and had got 0% finance on, he had paid the £25,000 LIST PRICE of the car after he cannily took their 0% finance offer. He went a bit quiet when someone pointed out he could have got the car for £6,000 less off a broker....

Edited by daemon on Tuesday 25th October 20:54