What portion of your income should be spent on cars ??
Discussion
Audemars said:
Average UK salary is £27k ish so approx.£30k. Whats a few £ when it is so low.
People are not smart enough to know that true disposable income is about 10% of what they think it is.
Did I mention that those on such salaries should NEVER drink at coffee shops nor eat out more than once a month? The number of poor people paying £5 daily for a coffee and cake is mind blowing.
Buy a decent reliable £3k used car and run it till it gets unreliable.
There is no prestige in a £70k range rover nor a German V8 saloon so why waste your future on one.
Also my numeracy most be ok as I get paid handsomely for that skill.
People are not smart enough to know that true disposable income is about 10% of what they think it is.
Did I mention that those on such salaries should NEVER drink at coffee shops nor eat out more than once a month? The number of poor people paying £5 daily for a coffee and cake is mind blowing.
Buy a decent reliable £3k used car and run it till it gets unreliable.
There is no prestige in a £70k range rover nor a German V8 saloon so why waste your future on one.
Also my numeracy most be ok as I get paid handsomely for that skill.
Edited by Audemars on Sunday 2nd April 03:14
Top trolling!
A car only costs you the difference between what you buy it for and sell it for.
My Aston was £52k but I sold it a year later for £50k, so it cost me £2k that year.
My M5 cost me £30k and I sold it a year later for £31k, so it paid me £1k.
Measuring it this way, I would not want to spend more then 5% of my net income on a car per year. Obviously if you finance your cars and on an average salary, this is nearly impossible as even on a £25k car, you'll pay nearly this is interest alone.
You can definitely own some amazing cars for next to nothing if you're smart about it. If you finance, are one of these people that need to have the facelift model or a car under 3 years old, you can forget it!
My Aston was £52k but I sold it a year later for £50k, so it cost me £2k that year.
My M5 cost me £30k and I sold it a year later for £31k, so it paid me £1k.
Measuring it this way, I would not want to spend more then 5% of my net income on a car per year. Obviously if you finance your cars and on an average salary, this is nearly impossible as even on a £25k car, you'll pay nearly this is interest alone.
You can definitely own some amazing cars for next to nothing if you're smart about it. If you finance, are one of these people that need to have the facelift model or a car under 3 years old, you can forget it!
Edited by R8VBV on Sunday 2nd April 07:28
I love Audemars. He only pipes up on threads about money (other people's lack of) where he will happily look down over us 'peasants'. The reality is that you are no better than anyone else and you have no idea how wealthy many people are on here or what many do for a living so get back in your box. 'Paid handsomely'. Who gives a s
t?
Most importantly, do you actually have a car? Not once have I seen you talk about cars. Not that I am expecting you to reply to this at all.
t? Most importantly, do you actually have a car? Not once have I seen you talk about cars. Not that I am expecting you to reply to this at all.
Edited by SidewaysSi on Sunday 2nd April 08:24
swerni said:
SuperchargedVR6 said:
Roger Irrelevant said:
SuperchargedVR6 said:
Stupid numbers anyway. Someone earning £100K is only going to spend £10K on a car?! Yeah right!
Er, my friend earns around that amount and drives an Outback that's worth £3k on a good day. In fact I know quite a few people earning well into six figs who don't give a toss about cars and who drive the same runabout they've had for years. There's a high court judge in my village who's still driving an Escort (a st one, not a Cossie or anything like that). If you want proof, just drive down any wealthy street in your area. Nearly all will be driving 5-10 year old cars that they own. Down my road it's all last gen RR's, old Golf's and one house has two pristine M reg 320's. Yet if I go past a less wealthy area it's all new cars and new RR's driven by guys living in rented houses etc...
I agree life is short and you should get the things that make you happy, but not at the sacrifice of creating future wealth and a quality of life.
Did you know if you paid that £350 monthly payment in to a compound interest earning ISA, in 25years you would have c£250k? That £140k in lost interest is the true cost you need to add to how much a car is really costing you. Is having the latest SatNav system or slightly different headlights worth that?
As said before, you can have some amazing cars for almost free, but you need to be smart about it!
Edited by R8VBV on Sunday 2nd April 09:15
swerni said:
SuperchargedVR6 said:
Roger Irrelevant said:
SuperchargedVR6 said:
Stupid numbers anyway. Someone earning £100K is only going to spend £10K on a car?! Yeah right!
Er, my friend earns around that amount and drives an Outback that's worth £3k on a good day. In fact I know quite a few people earning well into six figs who don't give a toss about cars and who drive the same runabout they've had for years. There's a high court judge in my village who's still driving an Escort (a st one, not a Cossie or anything like that). I think it is quite age related. At the beginning of your career when you have a very long runway ahead it is more likely that you will spend a higher proportion of your income on more discretionary items. After all you have decades to recover. In the longer term especially when you hit your fifties and you can just get that worrying feeling that you might not work forever then you start to cut back. If you have limited resources at that stage then you are wise to reset and concentrate on how to have a secure future than a highly leveraged present.
I only had my first new car when I was 31. Prior to that I had some interesting well used rust buckets. I had to finance it as I had little disposable cash like many people. I suppose I could have borrowed more and gotten a better car than a Toyota Celica but I did have the fear, even then that things could go pear shaped and i would be burdened with debt.
I only had my first new car when I was 31. Prior to that I had some interesting well used rust buckets. I had to finance it as I had little disposable cash like many people. I suppose I could have borrowed more and gotten a better car than a Toyota Celica but I did have the fear, even then that things could go pear shaped and i would be burdened with debt.
There's way too many variables.
You can always spend more as a % the more you earn as once you cover the fixed costs or bills etc. your going to have more disposable income. Assuming you don't increase your fixed costs.
Plus age, the older you are the more likely you are to put more into a pension.
And relationship status/if you have kids etc.
So many variables.
I can only speak for me, I own my car outright, but i dont know what % of my income that would be as it's hard to measure as not on finance.
But when I was 22 and on a lowish income, I would spend way too much on a car I had on finance which looking back wasn't sensible, but I just wanted a nice car more than anything.
You can always spend more as a % the more you earn as once you cover the fixed costs or bills etc. your going to have more disposable income. Assuming you don't increase your fixed costs.
Plus age, the older you are the more likely you are to put more into a pension.
And relationship status/if you have kids etc.
So many variables.
I can only speak for me, I own my car outright, but i dont know what % of my income that would be as it's hard to measure as not on finance.
But when I was 22 and on a lowish income, I would spend way too much on a car I had on finance which looking back wasn't sensible, but I just wanted a nice car more than anything.
R8VBV said:
If you want proof, just drive down any wealthy street in your area. Nearly all will be driving 5-10 year old cars that they own. Down my road it's all last gen RR's, old Golf's and one house has two pristine M reg 320's. Yet if I go past a less wealthy area it's all new cars and new RR's driven by guys living in rented houses etc...
Hmm...I know that probably applies to some cases but I'm almost certain there's also a large number of people in the UK who live in the really nice houses in the really nice areas and have "normal" cars because they're mortgaged up to their eyeballs and can't afford more expensive cars, having ploughed all their money into these houses in the hope the current housing bubble continues.
ETA:
at Audemarsswerni said:
I'd disagree with that part, however it does depend on where the wealth came from.
I live in a wealthy area, I have four neighbours, all bar one drive old shed, however they are all old and have owned their houses for 25 years plus.
On the surrounding roads where the occupants are someone younger, there's everything from Lambo's to Ferraris, obligatory Ranger Rovers, Q7's to high end Mercs and BMW's.
I am 68 and I buy cars far less frequently than I used to, and hang onto some of them longer. Right now my cars are 14,12,10,10,4,and 2 years old, I have not given up buying cars, but find I am a bit less engaged, and there are only one or two cars that I am going in buy in the next few years.Part of it that when you're much younger there is all that experience you want to cram in...its natural.I live in a wealthy area, I have four neighbours, all bar one drive old shed, however they are all old and have owned their houses for 25 years plus.
On the surrounding roads where the occupants are someone younger, there's everything from Lambo's to Ferraris, obligatory Ranger Rovers, Q7's to high end Mercs and BMW's.
Audemars said:
Average UK salary is £27k ish so approx.£30k. Whats a few £ when it is so low.
People are not smart enough to know that true disposable income is about 10% of what they think it is.
Did I mention that those on such salaries should NEVER drink at coffee shops nor eat out more than once a month? The number of poor people paying £5 daily for a coffee and cake is mind blowing.
Buy a decent reliable £3k used car and run it till it gets unreliable.
There is no prestige in a £70k range rover nor a German V8 saloon so why waste your future on one.
Also my numeracy most be ok as I get paid handsomely for that skill.
£30k is low? People are not smart enough to know that true disposable income is about 10% of what they think it is.
Did I mention that those on such salaries should NEVER drink at coffee shops nor eat out more than once a month? The number of poor people paying £5 daily for a coffee and cake is mind blowing.
Buy a decent reliable £3k used car and run it till it gets unreliable.
There is no prestige in a £70k range rover nor a German V8 saloon so why waste your future on one.
Also my numeracy most be ok as I get paid handsomely for that skill.
Edited by Audemars on Sunday 2nd April 03:14
Okay.
HustleRussell said:
sparks_E39 said:
£30k is low?
Okay.
It's £3k more than average but also low apparentlyOkay.
We're told his numeracy most be okay?
Such as keeping £200k in the bank might not get the best return... silence.
Read to me as someone who has been burnt in the past and has something to prove.
Not that I care tbh, this is the internet, I'm the Queen.
sparks_E39 said:
Well I'd be very comfortable! I figure a small majority of high earners must just live in their own little "bubble".
You say that, but I have a relative who sold up and retired, probs worth around £10m-ish (wealth whispers, drives a battered old volvo etc etc). He was telling me how he uses QuidCo and TCB all the time 
The simple answer is you should spend whatever you wish on your motoring - with the proviso that it should not affect other aspects of your lifestyle unless you actively make the choice to let it. In some people's eyes that means owning outright, never spending more money than you have to on the car and either accumulating money or enjoying another indulgence such as boating, flying, exotic travel, supporting a charity or working part time.
Spending more than someone else isn't wrong, nor is spending less... it's just different. I neither drink nor smoke and elect to spend the money others spend on these pastimes on motoring instead. Nothing wrong with that choice, it's just different to the balances others make and you make a different choice depending on your current income, future income prospects and your liabilities.
If you want an absolute...
- My car invoice price (at time of purchase... new from a dealer) was 69% of my gross salary and 111% of net... if I bought the same value today that would be 62% and 98%
- My monthly car payment is 9% of my net today, was 10.5% at purchase
- My actual cost of ownership at the end of my 4yr PCP assuming I get nothing back will be 12% of my gross salary and 19% of net per annum but based on what equivalent cars are going for on Autotrader right now less say £2k for negotiation room... that becomes 10%/15%.
If that's confusing... yes I intended it to be because car ownership happens over time and your situation is not static over time. I never quite get the "my car lost money" argument. Yes it sold for (in most [i]but not all[i] cases) less than it was purchased for but it didn't lose money... in return the owner had the ability to drive it as many miles as they elected over the time they owned the car. Therefore you paid a certain amount per mile to drive... some cost more, some cost less. If you can afford it, drive what you like!
Spending more than someone else isn't wrong, nor is spending less... it's just different. I neither drink nor smoke and elect to spend the money others spend on these pastimes on motoring instead. Nothing wrong with that choice, it's just different to the balances others make and you make a different choice depending on your current income, future income prospects and your liabilities.
If you want an absolute...
- My car invoice price (at time of purchase... new from a dealer) was 69% of my gross salary and 111% of net... if I bought the same value today that would be 62% and 98%
- My monthly car payment is 9% of my net today, was 10.5% at purchase
- My actual cost of ownership at the end of my 4yr PCP assuming I get nothing back will be 12% of my gross salary and 19% of net per annum but based on what equivalent cars are going for on Autotrader right now less say £2k for negotiation room... that becomes 10%/15%.
If that's confusing... yes I intended it to be because car ownership happens over time and your situation is not static over time. I never quite get the "my car lost money" argument. Yes it sold for (in most [i]but not all[i] cases) less than it was purchased for but it didn't lose money... in return the owner had the ability to drive it as many miles as they elected over the time they owned the car. Therefore you paid a certain amount per mile to drive... some cost more, some cost less. If you can afford it, drive what you like!
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