How the hell do people afford cars these days?
Discussion
pb8g09 said:
But then you have to drive a Citroen C4. You could use a loan and pay £250 a month to drive a £15-20k 16 plate Golf R, I30N, 308 GTi, BMW m140i…. Etc. and not have to have the risk of driving a joyless shopping trolley just to reward yourself being ‘risk free’. You’d still have to £10k residual left after 3 years.
£15k loan at £250/month = 60 months, or 5 years.How much is it then going to cost to maintain (servicing, repairs) and fuel those cars over those 5 years.
Incredibly optimistic a '16 plate Golf R is going to be worth £10k after 3 years, considering there are '12 plate Golf R's for under £9k on AT.
Regardless, typical PH strawman to have a thread discussing how the general public can't afford to buy a new car, only to be countered by a solution with "But that's stupid when you could buy something fast, old, and unreliable on finance instead!"
OutInTheShed said:
How do you know people are 'struggling to afford' new cars?
Lots of people I know could easily afford a new car, but they don't actually want one.
There are plenty of other things to spend your money on.
Some people seem to have lost interest in having the latest model.
Some people have less need for a car, due to working from home. They may have a 3 year old car on the drive which is really low mileage but the trade-in they are offered is offensive compared to the cost of new.
If the major thing in the market was people decling to get new cars, then there would be a shortage of 3 year old cars. We're not seeing that.
What we are seeing is more fleet cars. Less private sales, slight growth overall.
That seems to suggest some people are choosing to have a company car when a few years ago they might have opted for the car allowance?
We are in a fortunate position where we own both our vehicles outright (both worth about £15k) and have no other debts than the mortgage so could easily afford brand new cars on lease/PCP. My wife wants a newer car (current one is 9 years old) and we decided to go down the EV lease route costing around £200pm if you factor in fuel savings and we then stick the £15k the current car is worth in the bank earning some interest.Lots of people I know could easily afford a new car, but they don't actually want one.
There are plenty of other things to spend your money on.
Some people seem to have lost interest in having the latest model.
Some people have less need for a car, due to working from home. They may have a 3 year old car on the drive which is really low mileage but the trade-in they are offered is offensive compared to the cost of new.
If the major thing in the market was people decling to get new cars, then there would be a shortage of 3 year old cars. We're not seeing that.
What we are seeing is more fleet cars. Less private sales, slight growth overall.
That seems to suggest some people are choosing to have a company car when a few years ago they might have opted for the car allowance?
10 years ago we had two £300pm lease/PCP cars but when we looked at what it cost over a 3-4 year period paying depreciation alone, it made me realise it wasn't worth it just to own a brand new car.
All cars depreciate, used ones just depreciate less overall but they still do depreciate.
I can't see how a brand new car on a PCP/Lease is ever going to be cheaper than buying a used car over a 3 year period, even when you account for maintenance but if nobody bought brand new cars, there would be no used ones for everyone else down the line!
People generally buy a car because they need one. A car is going to be less than you paid for it when you come to sell it several years down the line. Most used cars don't cost anywhere near what a brand new one one, even accounting for maintenance (unless you happen to be very unlucky)
Wagonwheel555 said:
....
I can't see how a brand new car on a PCP/Lease is ever going to be cheaper than buying a used car over a 3 year period, even when you account for maintenance but if nobody bought brand new cars, there would be no used ones for everyone else down the line!...
Try looking at the depreciation from:I can't see how a brand new car on a PCP/Lease is ever going to be cheaper than buying a used car over a 3 year period, even when you account for maintenance but if nobody bought brand new cars, there would be no used ones for everyone else down the line!...
Buy retail at 3 years old
Sell WBAC at 6 years old
The extra cost of having a new car may not be always be that bad.
If you look at it as 'a lot of money' vs ' just a bit more', I ca nsee why some people see it as better value.
More so for peple who are notwell paced to sort issues on cars and don't want to spend their lives dealing with garages.
OutInTheShed said:
Try looking at the depreciation from:
Buy retail at 3 years old
Sell WBAC at 6 years old
The extra cost of having a new car may not be always be that bad.
If you look at it as 'a lot of money' vs ' just a bit more', I ca nsee why some people see it as better value.
More so for peple who are notwell paced to sort issues on cars and don't want to spend their lives dealing with garages.
Fair point but I disagree about the garage thing, people make out used cars spend half their life in a garage which with modern cars, is really not the case. Buy retail at 3 years old
Sell WBAC at 6 years old
The extra cost of having a new car may not be always be that bad.
If you look at it as 'a lot of money' vs ' just a bit more', I ca nsee why some people see it as better value.
More so for peple who are notwell paced to sort issues on cars and don't want to spend their lives dealing with garages.
Many brand new cars have issues, plenty of people have nothing but problems with them.
Many used cars have no issues, our 335D is 9 years old, we have owned it 4 years and not been into a garage once other than its MOT and servicing.
Wagonwheel555 said:
Many used cars have no issues, our 335D is 9 years old, we have owned it 4 years and not been into a garage once other than its MOT and servicing.
But you're talking about running a car between the ages of 4 years and 9 years. A car that would have been, what, £20k-£25k from a dealer at 4 years old. What will WBAC give you for it now? You may have avoided repair bills but you have done that by buying a relatively young used car. You will accordingly have taken a hit in depreciation instead. Try running it for another 5 years and see if it is still trouble free. Lil_Red_GTV said:
But you're talking about running a car between the ages of 4 years and 9 years. A car that would have been, what, £20k-£25k from a dealer at 4 years old. What will WBAC give you for it now? You may have avoided repair bills but you have done that by buying a relatively young used car. You will accordingly have taken a hit in depreciation instead. Try running it for another 5 years and see if it is still trouble free.
I think we were fortunate with the used car market going up, we bought for £18k from a BMW as AUC with only 14k on the clock, was an ex showroom car so private sale now is about £14-£15k based on the mileage and therefore has cost us very little over 4 years of ownership. WBAC is showing £12750 so even at that value, its still only around £110pm depreciation.Wagonwheel555 said:
Lil_Red_GTV said:
But you're talking about running a car between the ages of 4 years and 9 years. A car that would have been, what, £20k-£25k from a dealer at 4 years old. What will WBAC give you for it now? You may have avoided repair bills but you have done that by buying a relatively young used car. You will accordingly have taken a hit in depreciation instead. Try running it for another 5 years and see if it is still trouble free.
I think we were fortunate with the used car market going up, we bought for £18k from a BMW as AUC with only 14k on the clock, was an ex showroom car so private sale now is about £14-£15k based on the mileage and therefore has cost us very little over 4 years of ownership. WBAC is showing £12750 so even at that value, its still only around £110pm depreciation.Wagonwheel555 said:
Fair point but I disagree about the garage thing, people make out used cars spend half their life in a garage which with modern cars, is really not the case.
Many brand new cars have issues, plenty of people have nothing but problems with them.
Many used cars have no issues, our 335D is 9 years old, we have owned it 4 years and not been into a garage once other than its MOT and servicing.
New cars have far less issues on average than 3+ year old used cars. And if new cars do go wrong those issues get fixed under warranty for free which isn't always the case with used cars obviously unless you buy approved.Many brand new cars have issues, plenty of people have nothing but problems with them.
Many used cars have no issues, our 335D is 9 years old, we have owned it 4 years and not been into a garage once other than its MOT and servicing.
Funnily enough in my personal experience used BMW's are the worst of the lot. We've had 3 over the years adding up to a total ownership term of around 8 years , and all of them had significant and expensive to resolve issues at < 5 years old. Fortunately all were AUC bought so didn't cost me a penny, just a lot of hassle.
E46 330i - 3 years old, issues with power loss and dropping into limp home mode after fueling. Electrical gremlin which required a new engine harness to eventually resolve after multiple visits to the dealer.
E60 530D - 4 years old. Needed a new gearbox after it chewed itself up due to an ATF leak.
F10 530i - 3 years old. Misfire requiring replacement of coil packs, injectors and a ruined catalytic converter due to overfueling.
We've had plenty of new cars over the years, both private and company, and never had any problems with them.
What in god's name are people buying if they think a car ouside warranty is a ticking time bomb or a car over 10 years old WILL throw up large bills? There are loads of cars around at 5-10+ years that are perfectly reliable. Smaller, simpler cars all the more so.
The UK average mileage is about 7.5k a year so at 10 years old the average car will have 75k miles. Hardly knackered mechanically and in reality corrosion isn't likely to be much of an issue at that age/mileage. The average lifespan of a car is about 15 years old so your 10 year old car will have 3-5 years of useable life left in it. Average length of ownership is about 4 years so that would suggest you can expect it to survive until many people will be looking to offload.
If safety is your argument then the statistics suggest road casualty KSI figures have been fairly flat from about 2010 onward so unless you are looking at something appreciably older than 12-15 years you are gaining a minor advantage.
This unreliability in 'older' cars just does not happen - at least on any scale. The suggestion that older cars are unreliable and can throw up big bills is just a variation on the man-math argument for getting the latest shiny (or something larger/with a German badge). I suspect what people need differs hugely from what people want and 'affordable' means of getting into newer cars facilitates this.
As always the cheapest way to own a car is to keep it for a long time - ideally to just before it expires.
The UK average mileage is about 7.5k a year so at 10 years old the average car will have 75k miles. Hardly knackered mechanically and in reality corrosion isn't likely to be much of an issue at that age/mileage. The average lifespan of a car is about 15 years old so your 10 year old car will have 3-5 years of useable life left in it. Average length of ownership is about 4 years so that would suggest you can expect it to survive until many people will be looking to offload.
If safety is your argument then the statistics suggest road casualty KSI figures have been fairly flat from about 2010 onward so unless you are looking at something appreciably older than 12-15 years you are gaining a minor advantage.
This unreliability in 'older' cars just does not happen - at least on any scale. The suggestion that older cars are unreliable and can throw up big bills is just a variation on the man-math argument for getting the latest shiny (or something larger/with a German badge). I suspect what people need differs hugely from what people want and 'affordable' means of getting into newer cars facilitates this.
As always the cheapest way to own a car is to keep it for a long time - ideally to just before it expires.
Not that anyone thinking of leasing a base model Citroën will care, but the cost is enough to cover owning far more special cars.
My McLaren has not depreciated at all in the time I owned it. My R8 appreciated. My Range Rover has depreciated about £8,000 in four years, my brand new SL63 dropped £3k in two years and brand new 911 GTS dropped by the same.
None of them have had massive repair bills or had to be off the road.
I understand the peace of mind that will come with leasing, but not those arguing that it makes financial sense relative to buying something four years old.
My McLaren has not depreciated at all in the time I owned it. My R8 appreciated. My Range Rover has depreciated about £8,000 in four years, my brand new SL63 dropped £3k in two years and brand new 911 GTS dropped by the same.
None of them have had massive repair bills or had to be off the road.
I understand the peace of mind that will come with leasing, but not those arguing that it makes financial sense relative to buying something four years old.
Tonberry said:
ARHarh said:
Why do you all assume an old car will throw massive bills?
I have always bought cars at about 8 to 12 years old, since my first car in 1980. Many have well exceeded 150k miles by the time I let them go. Ok i fix them myself but have rarely had bills of more than a couple of hundred quid, if i had to pay labour that would would probably double the cost. Yes there is a risk, but if you keep an eye on things and service properly the chances of the cost of repair being more than cost of replacement, is minimal.
I can see some not liking the worry your car might break down but that can even happen on new cars, it why breakdown services exist.
Depends on the car.I have always bought cars at about 8 to 12 years old, since my first car in 1980. Many have well exceeded 150k miles by the time I let them go. Ok i fix them myself but have rarely had bills of more than a couple of hundred quid, if i had to pay labour that would would probably double the cost. Yes there is a risk, but if you keep an eye on things and service properly the chances of the cost of repair being more than cost of replacement, is minimal.
I can see some not liking the worry your car might break down but that can even happen on new cars, it why breakdown services exist.
Large SUVs will start throwing big bills at that age as will large German saloons.
To be fair, the newer stuff is getting better. So I'd be slightly less concerned about a 2014 X5 than I would have been about a 2007 X5 when it was 10 years old.
Engines, transmissions, drive shafts, transfer cases, suspension components, DPFs, EGRs, coolant leaks, oil leaks(!), stretched timing chains, electrics....I could go on.
Many of these cars have specific faults which you'd only know about with research.
Most people still don't know that crankshafts commonly snap on 3.0 diesel Land Rovers....
I wonder if the divergent views on reliability here are caused by some people buying older "sensible" cars and some older "interesting" cars. It may well be that spending £8k on a 10 year old cooking-spec Golf is indeed the way to go for affordable, reliable motoring. But Jesus Christ, as a car enthusiast I'd find that pretty soul-destroying.
Good to know that a McLaren is an option instead, though. Who'd have thought that one could be had for the same cost as a leased Citroen.
Good to know that a McLaren is an option instead, though. Who'd have thought that one could be had for the same cost as a leased Citroen.
Lil_Red_GTV said:
I wonder if the divergent views on reliability here are caused by some people buying older "sensible" cars and some older "interesting" cars. It may well be that spending £8k on a 10 year old cooking-spec Golf is indeed the way to go for affordable, reliable motoring. But Jesus Christ, as a car enthusiast I'd find that pretty soul-destroying.
Good to know that a McLaren is an option instead, though. Who'd have thought that one could be had for the same cost as a leased Citroen.
Probably a bit less, I think I could sell it for about £5,000 more than I paid for it.Good to know that a McLaren is an option instead, though. Who'd have thought that one could be had for the same cost as a leased Citroen.
Of course, it does come with some risk, but in quite a few years of buying fun cars I’ve never had a huge bill.
I forgot to mention my Yaris. Not cheap two years ago at £34,000, but it looks as though it’s worth similar to that now.
This run of apparently good luck and cheap motoring may be about to come to an abrupt halt as I’ve stepped up in cost for a convertible, buying at the worst time of year, but we’ll see.
As I mentioned earlier I have always bought older cars and never had big bills. They have not been boring hatchback shopping cars either, a 12 years old xjs owned for 4 years cost me some shocks on the rear and a bracket for the expansion bottle, an XKR convertible cost me nothing in parts over 3 years, the latest Lexus RX400h has had a few bits replaced but nothing major, a rad, some bottom ball joints, the handbrake cables and the reversing camera (which was replaced with an ebay special for £12), the rx has gone from 9 years old to 17 years old in my hands and covered 75k miles, it is now just over 160k. It will be px'ed this week. Obviously these cars have required servicing including brakes tyres etc, but then all cars need them even if the are nearly new. The biggest expense on most of the cars is cambelt replacement, but even if you pay someone to do them it will still not be that expensive. There have been many more but the most boring was when bought my first house and ran old metros for a couple of years, followed by an old cavalier. Even the metros caused few issues.
It would be easy to put a 10 year old car into a main dealer and end up with a massive bill, but you would be daft to do that. It would also be easy to be very fussy and pay someone fix every little issue, in which case a 10 year old car is not for you.
It would be easy to put a 10 year old car into a main dealer and end up with a massive bill, but you would be daft to do that. It would also be easy to be very fussy and pay someone fix every little issue, in which case a 10 year old car is not for you.
Lil_Red_GTV said:
It may well be that spending £8k on a 10 year old cooking-spec Golf is indeed the way to go for affordable, reliable motoring. But Jesus Christ, as a car enthusiast I'd find that pretty soul-destroying.
If you're in Scotland that may well be true, but if you drove where okgo does I don't think you'd be nearly as bothered.Ken_Code said:
cj2013 said:
Which is fine, if you have £19k lying around - at which point you're in the wrong thread.
If people are leasing them because they can’t afford to buy it outright then it makes even less sense.I don't get what people's concern is over someone else spending their own money on something they want to buy for themselves, more so on PCP as they know what the payments will be and for the most part will be handing them back at the end of the term for something else, so if they are happy with the payments then surely let them crack on with it.
I've just purchased a car on PCP on a 0% finance deal, and as someone with a young family we wanted something relatively new (3 years or less) we set an agreed limit on what we wanted to pay with an extended warranty, we are happy with the contract agreement, the company gets a sale, the customer is happy, whats the issue?
James_33 said:
Why does it make even less sense? Realistically speaking how many average Joe's have 19k laying about? And even more so on cars of higher value, sure some people will but for the majority they haven't.
I don't get what people's concern is over someone else spending their own money on something they want to buy for themselves, more so on PCP as they know what the payments will be and for the most part will be handing them back at the end of the term for something else, so if they are happy with the payments then surely let them crack on with it.
I've just purchased a car on PCP on a 0% finance deal, and as someone with a young family we wanted something relatively new (3 years or less) we set an agreed limit on what we wanted to pay with an extended warranty, we are happy with the contract agreement, the company gets a sale, the customer is happy, whats the issue?
The issue is that while you may have three months income in an easy-access account and / or very good redundancy insurance many who do what you have don’t, and will set lease payments that leave them with very little spare each month.I don't get what people's concern is over someone else spending their own money on something they want to buy for themselves, more so on PCP as they know what the payments will be and for the most part will be handing them back at the end of the term for something else, so if they are happy with the payments then surely let them crack on with it.
I've just purchased a car on PCP on a 0% finance deal, and as someone with a young family we wanted something relatively new (3 years or less) we set an agreed limit on what we wanted to pay with an extended warranty, we are happy with the contract agreement, the company gets a sale, the customer is happy, whats the issue?
Advising people that this is risky may aggravate you, but may also make someone else think twice about why they are entering into a multi-year commitment that could turn into a disaster if they lose their job.
Lil_Red_GTV said:
Wagonwheel555 said:
Many used cars have no issues, our 335D is 9 years old, we have owned it 4 years and not been into a garage once other than its MOT and servicing.
But you're talking about running a car between the ages of 4 years and 9 years. A car that would have been, what, £20k-£25k from a dealer at 4 years old. What will WBAC give you for it now? You may have avoided repair bills but you have done that by buying a relatively young used car. You will accordingly have taken a hit in depreciation instead. Try running it for another 5 years and see if it is still trouble free. Gassing Station | Car Buying | Top of Page | What's New | My Stuff