How do people afford cars these days?
Discussion
People are stupid, frittering away their inheritance and neglect paying off their mortgage and filling up their pension because if they turn up to their kids football practice in anything other than a new "premium" SUV they will feel like a failure in life.
I think it all started with brand named trainers when people were at school and has now got a bit out of hand.
Prices have gone up a lot vs wages in the last few years but people can't downgrade, what would the neighbours think!
I think it all started with brand named trainers when people were at school and has now got a bit out of hand.
Prices have gone up a lot vs wages in the last few years but people can't downgrade, what would the neighbours think!
Technotronic said:
We spend maybe another £1000 a month at most on 'living', Eating out, restaurants, taking our kid places, buying clothing, the odd toys or treats, Netflix, cinema, and things like that.
Most people I know with flash cars don't do this. Or if they do they are living from paycheck-to-paycheck.OP, you are, sadly, very unusual, as you don't spend anything like 100% of what you earn. Ask any IFA and they will tell you that the vast majority of the population spends every pound they have. A massive percentage of the population has less than £100 in savings. That is how you see so many people driving shiny new cars - they can afford it, but only by spending all they have. To me that seems a dangerous way to live, and leaves no margin for error, but we all have different attitudes to life and to risk.
People can afford cars because many people are paid well.
In the past you needed cash, a bank loan or HP to buy a car. Now there are numerous financial instruments avail for many people to get decent cars - leasing, PCP, PCH etc etc.
Even if you are not well paid, it is very easy for someone living at home with no rent or expenses to fund a £700pm car from their monthly wage
In the past you needed cash, a bank loan or HP to buy a car. Now there are numerous financial instruments avail for many people to get decent cars - leasing, PCP, PCH etc etc.
Even if you are not well paid, it is very easy for someone living at home with no rent or expenses to fund a £700pm car from their monthly wage
Priorities isnt it.
You could have a cheaper house.
No private school.
Not spend 1k a month on eating out etc.
No/less holidays.
Some people are happy to sacrifice things like the above for a nice car. I'm one of them, although the older i get the more im prioritising holidays/savings etc.
It is sad that people would be spending 2k a month to keep up with the Jones's mind. For most people on here its a hobby.
You could have a cheaper house.
No private school.
Not spend 1k a month on eating out etc.
No/less holidays.
Some people are happy to sacrifice things like the above for a nice car. I'm one of them, although the older i get the more im prioritising holidays/savings etc.
It is sad that people would be spending 2k a month to keep up with the Jones's mind. For most people on here its a hobby.
NH-0 said:
People are stupid, frittering away their inheritance and neglect paying off their mortgage and filling up their pension because if they turn up to their kids football practice in anything other than a new "premium" SUV they will feel like a failure in life.
I think it all started with brand named trainers when people were at school and has now got a bit out of hand.
Prices have gone up a lot vs wages in the last few years but people can't downgrade, what would the neighbours think!
My sister has a friend who involved their children in their lifestyle choices. Have lots of holidays and a normal car, or, one holiday a year and a nice car. I think it all started with brand named trainers when people were at school and has now got a bit out of hand.
Prices have gone up a lot vs wages in the last few years but people can't downgrade, what would the neighbours think!
There's a brand new Q7 on their drive every 2-3 years.
I ask myself, always when looking at cars, do I want to pay 'x' a month for that. The answers always no.
I couldn't give a fudge about what I turn up in, my 5 year old loves my battered A6 Avant in grandad grey (yet to tell him it'll be scrapped) , we just came back from a nice holiday in Greece and that's more where my money likes to go.
I couldn't give a fudge about what I turn up in, my 5 year old loves my battered A6 Avant in grandad grey (yet to tell him it'll be scrapped) , we just came back from a nice holiday in Greece and that's more where my money likes to go.
I am on similar income to you but as a single tax payer as my wife doesn't work.
Still have a mortgage as I only moved into the house in December.
We eat out every other week but I don't spend loads on holidays as simply we can't with our disabled son.
The secret you might find is that I put quite a lot of cash into my car and finance the rest. For instance I pay a little over £500 a month for 718 GT4 that I daily drive 10k miles a year. They might not blow 1k a month on going out save it and put it down on the cars to keep the monthlies down.
Is any this sensible? possibly not. Borrowing money on depreciating assets. But I am a believer in things being of more value than simply the money, my car is terrible financial investment but the absolute best one I have ever made for my happiness.
I will never understand people that seem obsessed with grinding away at work for 30 years always being sensible constantly dreaming of the glorious early retirement with their investment portfolio. Just seems like a waste of your youth.
All my own immature opinions of course others also available.
Still have a mortgage as I only moved into the house in December.
We eat out every other week but I don't spend loads on holidays as simply we can't with our disabled son.
The secret you might find is that I put quite a lot of cash into my car and finance the rest. For instance I pay a little over £500 a month for 718 GT4 that I daily drive 10k miles a year. They might not blow 1k a month on going out save it and put it down on the cars to keep the monthlies down.
Is any this sensible? possibly not. Borrowing money on depreciating assets. But I am a believer in things being of more value than simply the money, my car is terrible financial investment but the absolute best one I have ever made for my happiness.
I will never understand people that seem obsessed with grinding away at work for 30 years always being sensible constantly dreaming of the glorious early retirement with their investment portfolio. Just seems like a waste of your youth.
All my own immature opinions of course others also available.
I'm of a similar mindset. However, I love chucking money on cars. It's what I work for.
The days of spunking all my money on beer, football and wild women are long gone.
However, like most men, I haven't grown up, so cars are my thing.
The only difference is that I don't like finance. All of my cars are all bought and paid for. Cash.
I know that, as has been mentioned previously, cars are a depreciating asset, but I like the fact that should something happen work wise and I'm no longer able to work, everything is paid for and I don't have to worry about finding finance money.
Apparently that makes me one of the 0.5% in the country who do that.
It's good to be different.
The days of spunking all my money on beer, football and wild women are long gone.
However, like most men, I haven't grown up, so cars are my thing.
The only difference is that I don't like finance. All of my cars are all bought and paid for. Cash.
I know that, as has been mentioned previously, cars are a depreciating asset, but I like the fact that should something happen work wise and I'm no longer able to work, everything is paid for and I don't have to worry about finding finance money.
Apparently that makes me one of the 0.5% in the country who do that.
It's good to be different.
Exhibit 1 your honour.
https://forums.moneysavingexpert.com/categories/de...
Some people can't afford the life they lead.
Some people squirell every penny away into a pension pot and saving for a rainy day and never have anything nice.
Most people live somewhere between the 2 extremes.
I'm about to free up some money that's tied up in an asset which we are in the process of selling.
I could afford to buy any car with it (within reason) or I could use it to retire early or I could use it for a really nice holiday. There's a compromise to be had.
https://forums.moneysavingexpert.com/categories/de...
Some people can't afford the life they lead.
Some people squirell every penny away into a pension pot and saving for a rainy day and never have anything nice.
Most people live somewhere between the 2 extremes.
I'm about to free up some money that's tied up in an asset which we are in the process of selling.
I could afford to buy any car with it (within reason) or I could use it to retire early or I could use it for a really nice holiday. There's a compromise to be had.
I agree with you entirely OP - and with some of the posts above about people living beyond their means.
A few thoughts
1) You've probably posted more personal info on the internet than is safe. Maybe edit down your post to the key details - ages and salaries don't need to be stated, for example.
2) I don't get this obsession with leasing brand new cars. It made financial sense for a handful of years pre-Covid when interest rates were rock bottom and there was too much capacity across European car plants*, but it doesn't any more.
3) Cars (rust aside) don't really wear out anymore, as long as they were built properly at the factory. Yet anything over 100k miles is seen as almost worthless, for some weird reason, despite there being plenty of examples of cars with 200/300/400k on the clock quite happily.
4) What you're talking about is the 'middle classes' - the keeping-up-with-the-joneses brigade. There's a lot of people underneath them who inhabit the 2nd/3rd/4th/5th hand market and use local garages and keep their cars running for as long as possible.
5) I've not changed either of my cars for >10 years. The amount of money I've saved has enabled me to pay for a decent family holiday each year and keep my weekend toy far longer than expected, despite putting two kids through nursery fees across ~7 years on what became 1.5 salaries into the house.
* leading some mfrs to 'buy market share' to keep their plants operating as close to capacity as possible - economically as long as each sale covered all of their variable costs and contributed something towards the fixed operating costs of the whole organisation, that was a viable strategy.
A few thoughts
1) You've probably posted more personal info on the internet than is safe. Maybe edit down your post to the key details - ages and salaries don't need to be stated, for example.
2) I don't get this obsession with leasing brand new cars. It made financial sense for a handful of years pre-Covid when interest rates were rock bottom and there was too much capacity across European car plants*, but it doesn't any more.
3) Cars (rust aside) don't really wear out anymore, as long as they were built properly at the factory. Yet anything over 100k miles is seen as almost worthless, for some weird reason, despite there being plenty of examples of cars with 200/300/400k on the clock quite happily.
4) What you're talking about is the 'middle classes' - the keeping-up-with-the-joneses brigade. There's a lot of people underneath them who inhabit the 2nd/3rd/4th/5th hand market and use local garages and keep their cars running for as long as possible.
5) I've not changed either of my cars for >10 years. The amount of money I've saved has enabled me to pay for a decent family holiday each year and keep my weekend toy far longer than expected, despite putting two kids through nursery fees across ~7 years on what became 1.5 salaries into the house.
* leading some mfrs to 'buy market share' to keep their plants operating as close to capacity as possible - economically as long as each sale covered all of their variable costs and contributed something towards the fixed operating costs of the whole organisation, that was a viable strategy.
ntiz said:
Is any this sensible? possibly not. Borrowing money on depreciating assets. But I am a believer in things being of more value than simply the money, my car is terrible financial investment but the absolute best one I have ever made for my happiness.
+1 Hmmm, I will try and remember that quote the next time my man maths tells me my next car purchase is a really really bad idea.
It always looks as though everyone and his dog has a nice, flash car but I think if you sat there and took notice of every single car you saw you’d find 90% of them are mundane, run-of-the-mill stuff like Fiestas, Vectras and five year old Golf’s.
Given that 10% of the population earns over £70k a year I don’t think it’s that much of a surprise to see 10% of the cars on the road being quite expensive. Throw in a dual income and a bit of inheritance and there are actually quite a lot of people with quite a lot of money.
Up until recently you could get a pretty special £80k car with a £5k deposit and pay £800 a month. It sounds a lot but something old and very mundane could easily cost you half that in depreciation and repairs. Why not spend the extra and enjoy it?
Given that 10% of the population earns over £70k a year I don’t think it’s that much of a surprise to see 10% of the cars on the road being quite expensive. Throw in a dual income and a bit of inheritance and there are actually quite a lot of people with quite a lot of money.
Up until recently you could get a pretty special £80k car with a £5k deposit and pay £800 a month. It sounds a lot but something old and very mundane could easily cost you half that in depreciation and repairs. Why not spend the extra and enjoy it?
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