When did new cars become so expensive?
Discussion
Being self-employed, one of the benefits has been to choose whatever I want to drive, and change car whenever I like.
I currently have a 2 year old Lexus RX, but the new model is a whisker short of £50K and that's not top of the range (used to be sub £40K). The school car park is littered with new Land Rover Discoverys, and they seem to be north of £50K. I then spotted that even a Toyota RAV4 is above £30K.
OK, so I now that the VAT went up earlier this year, and we are still in the economic doldrums, but bloody hell - even an Audi Q5 2.0 diesel is about £38K and a VW Touareg £45K!
Are dealers realy shifting cars for this kind of money (there are plenty of new cars on the road) or giving away massive discounts? I thought no one had any money anymore!!
My philosophy has been to change cars on a 2-3 cycle when buying new, or <2 years if buying used, so to balance out depreciation versus the cost differential of a new car. I got a quote to change my 09 Lexus for a new middle of the range car and was quoted: my car plus £24K. At that rate, I think I would sell privately and start practicing bangernomics.
I currently have a 2 year old Lexus RX, but the new model is a whisker short of £50K and that's not top of the range (used to be sub £40K). The school car park is littered with new Land Rover Discoverys, and they seem to be north of £50K. I then spotted that even a Toyota RAV4 is above £30K.
OK, so I now that the VAT went up earlier this year, and we are still in the economic doldrums, but bloody hell - even an Audi Q5 2.0 diesel is about £38K and a VW Touareg £45K!
Are dealers realy shifting cars for this kind of money (there are plenty of new cars on the road) or giving away massive discounts? I thought no one had any money anymore!!
My philosophy has been to change cars on a 2-3 cycle when buying new, or <2 years if buying used, so to balance out depreciation versus the cost differential of a new car. I got a quote to change my 09 Lexus for a new middle of the range car and was quoted: my car plus £24K. At that rate, I think I would sell privately and start practicing bangernomics.
I made a thread a while ago asking how people paid for their new cars as I simply couldn't work out the maths in my mind. I work a decent job, have comparatively low outgoings and own two cars outright, both of which are 15-17 years old. I've occasionally looked into a newish or even new car and every time end up staggering backwards from the computer when I see just what it'd cost to put myself in a new car.
Putting aside the monthly payments (essentially £250-£300/month for anything HALF decent) then there is the large deposit AND the balloon payment at the end. It must be that this is how most people finance their cars but I just don't understand it! I see young girls in their early 20's driving around in 17k Mini Coopers and simply can't work out how they afford it!
I guess I'll never get a new car. As much as I want the convenience and reliability and comfort, I just don't think they're worth it!
Putting aside the monthly payments (essentially £250-£300/month for anything HALF decent) then there is the large deposit AND the balloon payment at the end. It must be that this is how most people finance their cars but I just don't understand it! I see young girls in their early 20's driving around in 17k Mini Coopers and simply can't work out how they afford it!
I guess I'll never get a new car. As much as I want the convenience and reliability and comfort, I just don't think they're worth it!
Short answer: 'your' cars have been getting more expensive because of the £/euro exchange rates. I remember boggo MINI Coopers being £11K and a bit in the UK around 2004/5 while we paid from 22,500 euro upwards, now the UK price is closer to 15 grand while here, it dropped to 22,000 euro (result of registration taxes being made CO2-dependent, not so good if you're buing a Korean SUV-like 
).
).Glad its not just me then!
I don't get the maths either. Pay £50K for a car, finance it on £700 month for 4 years and pay a load additional either upfront or at the end, lose 50% on it, and pay 6% interest for the privilege. Someone, somewhere, is laughing all the way to the bank. With the housing market as it is, you would think being would be ploughing money into buying cheap properties. That has to be a better prospect than a new car.
I don't get the maths either. Pay £50K for a car, finance it on £700 month for 4 years and pay a load additional either upfront or at the end, lose 50% on it, and pay 6% interest for the privilege. Someone, somewhere, is laughing all the way to the bank. With the housing market as it is, you would think being would be ploughing money into buying cheap properties. That has to be a better prospect than a new car.
Most people I know who buy new cars, do it on finance. Most of those deals are Ponzi car purchase schemes, where they pay a crippling balloon payment, after a certain time, or hand the car back, or get a guaranteed final value to enable them to start the cycle again with a newer version of what they have. In short, most of them never actually own the car outright.
Edited by Gwagon111 on Tuesday 7th June 11:18
I always ponder this,
There is always a reason why someone has a given car, here are some possible scenarios
Company Cars
Finance
Inherited Money/Trust Funds
Bonuses
Lottery Winners or freinds/relatives of lottery winner.
Very High Earners on PAYE
Company owners
Double income, no kids
Lives with parents, spends all money on a car
Those who operate in the cash economy and is spared the tiresome burden of PAYE
Benefits cheats (as per tv programme Monday Night, Z4's, Mercs etc)
Self Employed/Contractors (how I paid for mine, now sadly PAYE)
Criminal fraternity (Cheshire Has its fair share of outwardly respectable Gangsters)
Ragged edge financing, i.e. bills not payed but nice car, designer clothes, holidays.
There is always a reason why someone has a given car, here are some possible scenarios
Company Cars
Finance
Inherited Money/Trust Funds
Bonuses
Lottery Winners or freinds/relatives of lottery winner.
Very High Earners on PAYE
Company owners
Double income, no kids
Lives with parents, spends all money on a car
Those who operate in the cash economy and is spared the tiresome burden of PAYE
Benefits cheats (as per tv programme Monday Night, Z4's, Mercs etc)
Self Employed/Contractors (how I paid for mine, now sadly PAYE)
Criminal fraternity (Cheshire Has its fair share of outwardly respectable Gangsters)
Ragged edge financing, i.e. bills not payed but nice car, designer clothes, holidays.
entwisi said:
SWMBO is about to get a new Co car
astra eco flex jobbie, list price > 23K and thats without any extras added although it is a decent "spec" to start with but certainly nothing extra special. I know if it was my 23K I certainly wouldn't be buying a diesel eco hatchback.
This is where list pricing is still bonkers on the "volume" models - you can get a new Astra for £12K. I bought a new Golf for my daughter for £13K recently. For company car drivers it's stupid to have high list prices as it bumps up the tax.astra eco flex jobbie, list price > 23K and thats without any extras added although it is a decent "spec" to start with but certainly nothing extra special. I know if it was my 23K I certainly wouldn't be buying a diesel eco hatchback.
I'd be interested to know which Astra model is £23K though - I thought they maxed out at around £19K?
I'm going to agree with the above and say its the finance deals. I've been an apprentice for the last 2yrs 6months and I know the other apprentices are on the exact same wage as me(no overtime availabel either) the apprentices down south all drive new cars on finance deals.
One example had a Fiesta Zetec he was paying £240 a month with balloon payment at the end. But once the 2 years were up he sold the fiesta back to Ford at an agreed price (agreed when he bought the car) and traded it up for a Fiesta diesel (looked like a mini Focus ST) now paying £300/month for this car.
To anybody from the outside he would look pretty well off, but he never owns his cars. The system is a bit of a house of cards.
Shockingly enough his recent facebook posts have been a what car, VXR Nuremburg, Focus RS, Impreza... So I asked what job had he secured (leaving apprenticeship) to find he hasn't he just wants an upgrade. I can't help but wonder how financially ruined he would be if he bought a new finance car then couldn't afford the finance because he didn't secure a job.
One example had a Fiesta Zetec he was paying £240 a month with balloon payment at the end. But once the 2 years were up he sold the fiesta back to Ford at an agreed price (agreed when he bought the car) and traded it up for a Fiesta diesel (looked like a mini Focus ST) now paying £300/month for this car.
To anybody from the outside he would look pretty well off, but he never owns his cars. The system is a bit of a house of cards.
Shockingly enough his recent facebook posts have been a what car, VXR Nuremburg, Focus RS, Impreza... So I asked what job had he secured (leaving apprenticeship) to find he hasn't he just wants an upgrade. I can't help but wonder how financially ruined he would be if he bought a new finance car then couldn't afford the finance because he didn't secure a job.
TUS 373 said:
Glad its not just me then!
I don't get the maths either. Pay £50K for a car, finance it on £700 month for 4 years and pay a load additional either upfront or at the end, lose 50% on it, and pay 6% interest for the privilege. Someone, somewhere, is laughing all the way to the bank. With the housing market as it is, you would think being would be ploughing money into buying cheap properties. That has to be a better prospect than a new car.
There are very few cheap properties to be ploughing money in to. Housing stock is massively over priced !I don't get the maths either. Pay £50K for a car, finance it on £700 month for 4 years and pay a load additional either upfront or at the end, lose 50% on it, and pay 6% interest for the privilege. Someone, somewhere, is laughing all the way to the bank. With the housing market as it is, you would think being would be ploughing money into buying cheap properties. That has to be a better prospect than a new car.
I just don't get why people spend their own money on new cars that plummet in value. Perhaps people feel they should spend as much as they can afford on their cars.
It's a nice moment when you get over that feeling and are happy to drive whatever you fancy and can afford - regardless of cost.
I chuck far too much of my own disposable income at old sportscars, classics - nothing particularly special or expensive. I like their character, they're fun to drive, and you'll get your money back if you sell them.
I drag the family around in a '99 Subaru GTB, an old Volvo or a Fiat Panda - whatever is taxed and waxed at the time. No one complains.
It's a nice moment when you get over that feeling and are happy to drive whatever you fancy and can afford - regardless of cost.
I chuck far too much of my own disposable income at old sportscars, classics - nothing particularly special or expensive. I like their character, they're fun to drive, and you'll get your money back if you sell them.
I drag the family around in a '99 Subaru GTB, an old Volvo or a Fiat Panda - whatever is taxed and waxed at the time. No one complains.
Chipper said:
TUS 373 said:
With the housing market as it is, you would think being would be ploughing money into buying cheap properties. That has to be a better prospect than a new car.
There are very few cheap properties to be ploughing money in to. Housing stock is massively over priced !Its mental, when a golf GTI with avergae spec sits at about £30K.
I looked at a mini cooper S, test drove it, was impressed, but even with just slightly bigger alloys, leather seats and nowt else, they want £340 a month for 4 years!!
Ort i could get a nice 02 plate V6 Alfa GTV for £125 a month for the same period, and probably be a lot happier!
I get that finance makes it 'feel' cheaper, but in the end, it really isn't.
Its fine if you have a good deposit or hefty trade in value, but otheriwse, its just tying yourself in debt for the sake of keeping up with jones's
I looked at a mini cooper S, test drove it, was impressed, but even with just slightly bigger alloys, leather seats and nowt else, they want £340 a month for 4 years!!
Ort i could get a nice 02 plate V6 Alfa GTV for £125 a month for the same period, and probably be a lot happier!
I get that finance makes it 'feel' cheaper, but in the end, it really isn't.
Its fine if you have a good deposit or hefty trade in value, but otheriwse, its just tying yourself in debt for the sake of keeping up with jones's
Golf GTI Mk5 list price on release was £19,995 from what I can remember, now a new one has a list of £25,060.
Taking the old list & increasing by inflation would make it approx £22,600, so essentially risen at twice the rate of inflation.
I saw the new Focus as a chance for Ford to reduce the price whilst providing a fantastic 'every day' car. Instead they've gone for differentiation and kept the price similar but packed it full of additional tech which, when goes wrong costs a fortune to fix or costs even more to replace if involved in an accident. Not the route I believe they should have taken (anyone that can't park shouldn't be driving etc etc, we'll soon end up like the people in Wall-E, being moved around by machine and being incapable of doing things ourselves), but people are too short-sighted, and want the best tech possible for their £300 a month so they can ignorantly show off down the pub.
And this is why I'm saving for a Caterham.
Taking the old list & increasing by inflation would make it approx £22,600, so essentially risen at twice the rate of inflation.
I saw the new Focus as a chance for Ford to reduce the price whilst providing a fantastic 'every day' car. Instead they've gone for differentiation and kept the price similar but packed it full of additional tech which, when goes wrong costs a fortune to fix or costs even more to replace if involved in an accident. Not the route I believe they should have taken (anyone that can't park shouldn't be driving etc etc, we'll soon end up like the people in Wall-E, being moved around by machine and being incapable of doing things ourselves), but people are too short-sighted, and want the best tech possible for their £300 a month so they can ignorantly show off down the pub.
And this is why I'm saving for a Caterham.
I suppose there are different reasons for buying new, some people do it for vanity, some as new cars are under warranty and they see it as a lesser evil than used and a known quantity, some because they can and dont pay it that much thought.
Also, if you buy new and change regularly and tend not to buy stuff that plummets, case in point being the cars mentioned, a 23K Astra if you keep it three years will be worth a lot less than if you bought the Mini Cooper S mentioned with a few options for the same price, so say you buy the first one mainly finance and pay it off or even buy cash you retain a chunk of value in your car than you can then move to the next one, take a clean, tidy and well maintained Mini back to Mini come PX time, they get prime used retail stock and you get a good part ex, cost to change spread over three years is say seven grand or £200 odd a month or so which for most working people, especially if you were already paying that for the old one is not that much and business as usual.
The problem I think for a lot of us is we hang onto a car and the value dwindles, like my Saab I paid nine grand its now worth say three, assuming someone wants it, so for me that 23 grand car is a massive stretch becasue I havent saved anything to replace mine and dont have the spare income to finance as there are other priorites like having 3 kids and I barely use the car anyway so am not going to make a big stretch to own something that sits there devaluing if I dont get the value from it.
Suppose the reall smart money is in identifying those cars that do not depreciate that much, i.e. not buying the top of the range Citroen C5 with all the options at list price ! anything desirable at say four years old tends to be at the most gentle point of the depreciation, spotting things that are on there way back up is a talent (E30 M3 anyone, five years ago), classics can be good if you buy one someone has done all the work on, buy a woofer (like us) and they can be a total money pit. Caterhams can be and excellent investment, things like Morgans as well, anything with a limited supply and enthusiastic following, especially once its a few years old and has lost its showroom depreciation, spotting new cars to speculate on is a talent and one for the brave, latest Ferraris are a good bet usually but dont hold on to long and get caught out by supply starting to meet demand, this is why things like the Focus RS are a dangerous thing to speculate on.
Also, if you buy new and change regularly and tend not to buy stuff that plummets, case in point being the cars mentioned, a 23K Astra if you keep it three years will be worth a lot less than if you bought the Mini Cooper S mentioned with a few options for the same price, so say you buy the first one mainly finance and pay it off or even buy cash you retain a chunk of value in your car than you can then move to the next one, take a clean, tidy and well maintained Mini back to Mini come PX time, they get prime used retail stock and you get a good part ex, cost to change spread over three years is say seven grand or £200 odd a month or so which for most working people, especially if you were already paying that for the old one is not that much and business as usual.
The problem I think for a lot of us is we hang onto a car and the value dwindles, like my Saab I paid nine grand its now worth say three, assuming someone wants it, so for me that 23 grand car is a massive stretch becasue I havent saved anything to replace mine and dont have the spare income to finance as there are other priorites like having 3 kids and I barely use the car anyway so am not going to make a big stretch to own something that sits there devaluing if I dont get the value from it.
Suppose the reall smart money is in identifying those cars that do not depreciate that much, i.e. not buying the top of the range Citroen C5 with all the options at list price ! anything desirable at say four years old tends to be at the most gentle point of the depreciation, spotting things that are on there way back up is a talent (E30 M3 anyone, five years ago), classics can be good if you buy one someone has done all the work on, buy a woofer (like us) and they can be a total money pit. Caterhams can be and excellent investment, things like Morgans as well, anything with a limited supply and enthusiastic following, especially once its a few years old and has lost its showroom depreciation, spotting new cars to speculate on is a talent and one for the brave, latest Ferraris are a good bet usually but dont hold on to long and get caught out by supply starting to meet demand, this is why things like the Focus RS are a dangerous thing to speculate on.
Edited by J4CKO on Tuesday 7th June 11:56
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