What does the term 'afford' mean to you?
Discussion
To avoid hijacking another thread any further, I thought I would post this question here:
I would like to know what the general consensus for being able to afford something - more specifically a supercar like a Ferrari 458 at ~£200,000 - be.
My opinion is that one should be able to buy the car with cash - whether they then choose to finance it or not is irrelevant. The fact is, they should be able to make said choice.
I feel that the world of easy financing - numerous lease, hire purchase and finance options allow people who can't really afford the car to buy one.
I remember back in ~1988 my father purchased a 944 with cash, and you rarely saw another Porsche on the road - yes his was 'the poor mans porsche' but it was still not affordable for many.
Now, anyone can get into a 320d - even if they earn £20k.
People with a decent salary can get into a Porsche. People with a rather good salary - say £100k - can get into a £200-250k car.
My opinion is that it is a financially unwise thing to do - that they cannot really afford said car, but are using a very large proportion of their salary to get into the car.
This post has come off the back of the comment from another poster that the Ferrari F458 isn't a supercar as the likes of average professionals such as GPs, accountants and solicitors can afford one.
I'm sure they can afford to finance one, but would struggle to pay for one outright.
So PH - what, in this day and age, constitutes being able to afford something - buying it, or paying the drip on it?
ETA:
It seems some people have jumped on my back accusing me of 'disapproving' of those or accusing those who take finance out as being 'wrong'... or to be honest, I don't know what else.
I wish to clarify that the above is my OPINION of the matter, as I ask for fellow PHers opinions.
I do not care whether you have purchased or financed your vehicle - unless you are my client, it is of no relevance to me, nor have I asked you how you have paid for your car.
It's your opinion on affordability I was asking for.
I would like to know what the general consensus for being able to afford something - more specifically a supercar like a Ferrari 458 at ~£200,000 - be.
My opinion is that one should be able to buy the car with cash - whether they then choose to finance it or not is irrelevant. The fact is, they should be able to make said choice.
I feel that the world of easy financing - numerous lease, hire purchase and finance options allow people who can't really afford the car to buy one.
I remember back in ~1988 my father purchased a 944 with cash, and you rarely saw another Porsche on the road - yes his was 'the poor mans porsche' but it was still not affordable for many.
Now, anyone can get into a 320d - even if they earn £20k.
People with a decent salary can get into a Porsche. People with a rather good salary - say £100k - can get into a £200-250k car.
My opinion is that it is a financially unwise thing to do - that they cannot really afford said car, but are using a very large proportion of their salary to get into the car.
This post has come off the back of the comment from another poster that the Ferrari F458 isn't a supercar as the likes of average professionals such as GPs, accountants and solicitors can afford one.
I'm sure they can afford to finance one, but would struggle to pay for one outright.
So PH - what, in this day and age, constitutes being able to afford something - buying it, or paying the drip on it?
ETA:
It seems some people have jumped on my back accusing me of 'disapproving' of those or accusing those who take finance out as being 'wrong'... or to be honest, I don't know what else.
I wish to clarify that the above is my OPINION of the matter, as I ask for fellow PHers opinions.
I do not care whether you have purchased or financed your vehicle - unless you are my client, it is of no relevance to me, nor have I asked you how you have paid for your car.
It's your opinion on affordability I was asking for.
Edited by vinnie83 on Wednesday 30th October 15:00
The Vambo said:
I would like to see the house that you can afford to own.
Houses have always been the exception haven't they. The fact that rents are often higher than the mortgage interest would be means that it's a totally different consideration. It's an appreciating asset, unlike a car.The above is quite obviously a totally different scenario.
Having a home is essential, therefore saving 20 years for a property isn't viable. Besides the fact that you are buying an appreciating asset.
A Ferrari, Lambo etc are depreciating assets and not essential living items.
Houses are the exception only because most of the "can't afford it" crowd have a mortgage. If you do have a mortgage, your "cash purchase" car was bought with money you could have used to reduce your mortgage debt.
You can afford a car if you can cover the total cost of ownership over the period you will keep it without making any sacrifices you don't consider to be worthwhile. How you pay for it is neither here nor there - if it is your habit to put some money away every month to save up for your next car, you will need to put slightly less away than if you support the same car buying pattern with finance.
You can afford a car if you can cover the total cost of ownership over the period you will keep it without making any sacrifices you don't consider to be worthwhile. How you pay for it is neither here nor there - if it is your habit to put some money away every month to save up for your next car, you will need to put slightly less away than if you support the same car buying pattern with finance.
vinnie83 said:
The Vambo said:
I would like to see the house that you can afford to own.
Houses have always been the exception haven't they. The fact that rents are often higher than the mortgage interest would be means that it's a totally different consideration. It's an appreciating asset, unlike a car.The above is quite obviously a totally different scenario.
Having a home is essential, therefore saving 20 years for a property isn't viable. Besides the fact that you are buying an appreciating asset.
A Ferrari, Lambo etc are depreciating assets and not essential living items.
It will in all likelihood appreciate.
Does your head explode?
jonah35 said:
Someone on £100k cant afford a £250k supercar, nor can a run of the mill GP, solicitor or accountant. Yes,a managing partner or surgeon perhaps but theyre at the top of their profession!
£100k is about £5200pm net!
Still a lot of money. A second hand Aston Martin DB9 or Ferrari F430 would likely be in easy reach, I doubt many earning that much buy new £200k car's though. £100k is about £5200pm net!
Hark said:
Studio117 said:
How about you mind your own business?
Wondered if it was just me. ^^^
Nobody is asking about your affordability here are they? I was asking what peoples opinions are on the subject of what, to them, defines affordability.
If yours is that someone who lives in a one bed cheap flat and lives on beans on toast to finance a Lambo, state so - if you wish to. Nobody forced you.
Strange.
sparks_E39 said:
jonah35 said:
Someone on £100k cant afford a £250k supercar, nor can a run of the mill GP, solicitor or accountant. Yes,a managing partner or surgeon perhaps but theyre at the top of their profession!
£100k is about £5200pm net!
Still a lot of money. A second hand Aston Martin DB9 or Ferrari F430 would likely be in easy reach, I doubt many earning that much buy new £200k car's though. £100k is about £5200pm net!
I appreciate that older supercars are within reach now, and could quite easily be 'affordable' to those on more reasonable incomes.
The Vambo said:
vinnie83 said:
The Vambo said:
I would like to see the house that you can afford to own.
Houses have always been the exception haven't they. The fact that rents are often higher than the mortgage interest would be means that it's a totally different consideration. It's an appreciating asset, unlike a car.The above is quite obviously a totally different scenario.
Having a home is essential, therefore saving 20 years for a property isn't viable. Besides the fact that you are buying an appreciating asset.
A Ferrari, Lambo etc are depreciating assets and not essential living items.
It will in all likelihood appreciate.
Does your head explode?
Mastodon2 said:
Not according to some in another thread currently running in general gassing. However, in that thread GPs earn £400,000 a year.
My friend is a top eye doc (if not the very top) here in Australia, he makes millions. His car of choice...... Alfa 156 GTA for the weekend and a 500 abarth for driving to the surgery (obviously a 159 prior to that). He has many, many bottles of wine that cost more than both combined. Photo of wine cellar atached for reference - the cheapest bottle is probably around eqivilent to 500 gbp through to thousands (he has a whole section of rare Penfolds Grange) and yes we drink them.
vinnie83 said:
Having a home is essential, therefore saving 20 years for a property isn't viable. Besides the fact that you are buying an appreciating asset.
Watch yerself, it's that attitude that royally f
ked the country in the first place - not GPs buying supercars on finance. 1) A house isn't necessarily a cast iron investment, certainly not in the short term.
2) There's still every chance of ending up in negative equity
3) Everyone should have the right to somewhere to live - not necessarily the right to invest in an appreciating asset.
Unfortunately many people ignored points one, two and three, leading to price rises while everybody gets in on the act and tries to make a quick buck.
People overstretch themselves, lenders offer 4, 5, 6x people's salaries, the economy collapses/interest rates go mental and suddenly people don't have a chance in hell of paying the mortgage.
Over-stretching yourself to buy something - anything, a house included if you borrow too much, is the very definition of not being able to afford something as far as I see it. It's f
k all to do with whether somebody pays for a car in finance or cold, hard cash. All IMO, of course.
Edited by pthelazyjourno on Wednesday 30th October 00:09
And besides, the idea that it's madness to borrow to fund a depreciating asset but A-OK to spunk your life savings on one is deeply flawed. At least someone running a car on a PCP will have the depreciation factored in up front and will know whether they are going to be able to afford it.
pthelazyjourno said:
Watch yerself, it's that attitude that royally fked the country in the first place - not GPs buying supercars on finance.
1) A house isn't necessarily a cast iron investment
2) There's still every chance of ending up in negative equity
3) Everyone should have the right to somewhere to live - not necessarily the right to invest in an appreciating asset.
Unfortunately many people ignored points one, two and three, leading to price rises while everybody gets in on the act and tries to make a quick buck.
People overstretch themselves, lenders offer 4, 5, 6x people's salaries, the economy collapses and suddenly people don't have a chance in hell of paying the mortgage.
That's the very definition, for me, of not being able to afford something - it's fk all to do with whether somebody pays for a car in finance or cold, hard cash.
All IMO, of course.
Discussion for another thread.ked the country in the first place - not GPs buying supercars on finance. 1) A house isn't necessarily a cast iron investment
2) There's still every chance of ending up in negative equity
3) Everyone should have the right to somewhere to live - not necessarily the right to invest in an appreciating asset.
Unfortunately many people ignored points one, two and three, leading to price rises while everybody gets in on the act and tries to make a quick buck.
People overstretch themselves, lenders offer 4, 5, 6x people's salaries, the economy collapses and suddenly people don't have a chance in hell of paying the mortgage.
That's the very definition, for me, of not being able to afford something - it's f
k all to do with whether somebody pays for a car in finance or cold, hard cash. All IMO, of course.
People overstretching themselves and financing to potentially unaffordable levels, and actually relying on increase in equity to allow them to afford their lifestyles caused the mess.
People who should really have purchased 3 bed semis went and mortgaged up to their eyeballs on 125% or interest only mortgages to buy that lovely 4 bed detached etc.
There was nothing wrong with investing in property, but thinking that you're guaranteed to make money because house prices were going to keep going up quickly was the problem.
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