Downgrade your car to become debt-free?
Discussion
mjb1 said:
That is some achievement! How have you managed to get in that state??
I bought a shiny nearly new car and had to insure it 
I'm of the school as long as you use credit right, you should have no issues. £10k is just under half of my yearly income pre-tax and then I get expenses from work for travel (I'm a telecoms engineer but we use our own cars. Do about 25,000 business miles a year), so I can make a fair bit out if that if the car stays reliable. Obviously the expenses covers servicing, tyres, depreciation etc.
The downside is that I needed a reliable diesel, preferably with some warranty as our mileage can break them if they're not used to it, and also, I'm not that car savvy, so something that wouldn't need ongoing repairs.
xreyuk said:
I bought a shiny nearly new car and had to insure it
I'm of the school as long as you use credit right, you should have no issues. £10k is just under half of my yearly income pre-tax and then I get expenses from work for travel (I'm a telecoms engineer but we use our own cars. Do about 25,000 business miles a year), so I can make a fair bit out if that if the car stays reliable. Obviously the expenses covers servicing, tyres, depreciation etc.
The downside is that I needed a reliable diesel, preferably with some warranty as our mileage can break them if they're not used to it, and also, I'm not that car savvy, so something that wouldn't need ongoing repairs.
you bought a seat leon new and have landed yourself this much in debt, and consider yourself even slightly financially capable?I'm of the school as long as you use credit right, you should have no issues. £10k is just under half of my yearly income pre-tax and then I get expenses from work for travel (I'm a telecoms engineer but we use our own cars. Do about 25,000 business miles a year), so I can make a fair bit out if that if the car stays reliable. Obviously the expenses covers servicing, tyres, depreciation etc.
The downside is that I needed a reliable diesel, preferably with some warranty as our mileage can break them if they're not used to it, and also, I'm not that car savvy, so something that wouldn't need ongoing repairs.
no offense here, but this is a prime example of the modern generation being absolutely and completely s
t with money. Your car expenditure shouldn't be anywhere near half or your salary, where the hell did you hear this? your mortgage could be, but not your car.I can't even be bothered to rant at you. just quite simply sell the sodding car, get something sensible. you will f
k up your life royally if you don't.Edited by Efbe on Thursday 19th July 09:10
C.A.R. said:
I pay-
Rent - £675
Council Tax - £113
Bills - £100-115
Mobile phones - £50
Fuel - £220ish
Car insurance - £100
You need to sort out how much you are spending on the simple stuff every month! I'm the same age as you, without a baby on the way and with two incomes coming in. Currently saving to buy a house (about £20,000 so far but seriously considering buying outright so another £100,000 to go), I also have four classic cars. However, my monthly spend (on bills and rent) would be MUCH less in your situation.Rent - £675
Council Tax - £113
Bills - £100-115
Mobile phones - £50
Fuel - £220ish
Car insurance - £100
Rent - £450 (lucky that houses are cheap round here, 2 bed semi with a 4 car drive. Not ideal for me IMO but got to compromise somewhere) Could live in a place like mine with a kid easily.
Council Tax - £120 Can't change this.
Bills (gas, electric, water rates) - £120 Can't change this.
BT phone + broadband - £40 This is cheaper than mobile phones, we make ALOT of calls. So you could get this down to about £35 per month.
Mobile phones - £5 (PAYG) Just use them for emergencies.
Car insurance - (4 x £200 = £800 p/a e/a) so £67 per month, this is for four cars. Pay your insurance off in one or you are only paying interest on it.
Fuel - £300. You already say you spend less on fuel than I do.
Food - £30 (Aldi is your friend
) Don't underestimate your food shopping bill, we used to shop in Tesco / Sainsburys and saved about £15 per week going to Aldi / local shops / local cash and carry.Clothes / Other stuff also needs to be taken into account.
You absolutely need to try and budget. I used to live WAY beyond my means and yet had less than I have now. It is not that my income has gone up buy a very large amount but because I have learnt to budget I spend less on the necessities.
V8Triumph said:
good stuff
We manage to get bills (gas, electric, water rates) of £95 a month in a 3 bed semi through utility warehouse, and making sure we have LED lightbulbs and thermostats on the radiators.with food, I completely agree, however a baby increases costs a lot. much more than you would expect.
Efbe said:
V8Triumph said:
good stuff
We manage to get bills (gas, electric, water rates) of £95 a month in a 3 bed semi through utility warehouse, and making sure we have LED lightbulbs and thermostats on the radiators.with food, I completely agree, however a baby increases costs a lot. much more than you would expect.
As far as the baby goes, as I said I don't know. However, I think the OP needs to look into if there are any benefits available to him; child allowance and the like. Which if there is surely this should go some way to paying for C.A.R. jnr? Mrs. C.A.R. needs to be thinking about what she is going to do once baby is born as well - frankly, she needs to start thinking about getting back to work / study.
Next thing to think about is the car. You want something that is easy to fix and cheap to insure (none of this £100 per month insurance that in the OP's situation can never afford to pay in one).
V8Triumph said:
Rent - £450 (lucky that houses are cheap round here, 2 bed semi with a 4 car drive. Not ideal for me IMO but got to compromise somewhere) Could live in a place like mine with a kid easily.
Council Tax - £120 Can't change this.
Bills (gas, electric, water rates) - £120 Can't change this.
BT phone + broadband - £40 This is cheaper than mobile phones, we make ALOT of calls. So you could get this down to about £35 per month.
Mobile phones - £5 (PAYG) Just use them for emergencies.
Car insurance - (4 x £200 = £800 p/a e/a) so £67 per month, this is for four cars. Pay your insurance off in one or you are only paying interest on it.
Fuel - £300. You already say you spend less on fuel than I do.
Food - £30 (Aldi is your friend) Don't underestimate your food shopping bill, we used to shop in Tesco / Sainsburys and saved about £15 per week going to Aldi / local shops / local cash and carry.
Clothes / Other stuff also needs to be taken into account.
£450 for a 2 bed semi? That's very good. I've just found somewhere after a long search and that's £765 a month.Council Tax - £120 Can't change this.
Bills (gas, electric, water rates) - £120 Can't change this.
BT phone + broadband - £40 This is cheaper than mobile phones, we make ALOT of calls. So you could get this down to about £35 per month.
Mobile phones - £5 (PAYG) Just use them for emergencies.
Car insurance - (4 x £200 = £800 p/a e/a) so £67 per month, this is for four cars. Pay your insurance off in one or you are only paying interest on it.
Fuel - £300. You already say you spend less on fuel than I do.
Food - £30 (Aldi is your friend
) Don't underestimate your food shopping bill, we used to shop in Tesco / Sainsburys and saved about £15 per week going to Aldi / local shops / local cash and carry.Clothes / Other stuff also needs to be taken into account.
I however then differ to you greatly and spend all my money on cars, good food, good wine and holidays. I've stopped going out pissing money up the wall on nights out though and stopped smoking which is an EPIC saving
Btw - £30 a month on food? Really?
Efbe said:
xreyuk said:
I bought a shiny nearly new car and had to insure it
I'm of the school as long as you use credit right, you should have no issues. £10k is just under half of my yearly income pre-tax and then I get expenses from work for travel (I'm a telecoms engineer but we use our own cars. Do about 25,000 business miles a year), so I can make a fair bit out if that if the car stays reliable. Obviously the expenses covers servicing, tyres, depreciation etc.
The downside is that I needed a reliable diesel, preferably with some warranty as our mileage can break them if they're not used to it, and also, I'm not that car savvy, so something that wouldn't need ongoing repairs.
you bought a seat leon new and have landed yourself this much in debt, and consider yourself even slightly financially capable?I'm of the school as long as you use credit right, you should have no issues. £10k is just under half of my yearly income pre-tax and then I get expenses from work for travel (I'm a telecoms engineer but we use our own cars. Do about 25,000 business miles a year), so I can make a fair bit out if that if the car stays reliable. Obviously the expenses covers servicing, tyres, depreciation etc.
The downside is that I needed a reliable diesel, preferably with some warranty as our mileage can break them if they're not used to it, and also, I'm not that car savvy, so something that wouldn't need ongoing repairs.
no offense here, but this is a prime example of the modern generation being absolutely and completely s
t with money. Your car expenditure shouldn't be anywhere near half or your salary, where the hell did you hear this? your mortgage could be, but not your car.I can't even be bothered to rant at you. just quite simply sell the sodding car, get something sensible. you will f
k up your life royally if you don't.Edited by Efbe on Thursday 19th July 09:10
Leave financial advice to the grownups, please.
Some food for thought on this thread, definitely.
Ultimately our mutual decision to have a baby was made whilst we were both in employment and living at home with parents. I perhaps underestimated the costs of living in private accommodation with just my income, which was easily done because you don't appreciate the utility bills when they are being paid for you.
I raised the £1900 to pay for our letting agency fees, deposit and suchlike, so theoretically paying off the debt should be easy - but it isn't. Now I'm paying out 50% of my income in rent and bills, whilst Mrs C.A.R.s income is limited to whatever she can get through Jobseekers. At nearly 7 months preggers she's not the most motivated person to find work, what little there is to apply for.
My first priority is Mrs C.A.R.s happiness and security, so moving closer to work was a no-no. She has family here in the town who are local enough to help out when she needs it and she's unable to drive after failing her test earlier this year (would've made life much easier...). I live 18 miles from work, public transport between here and there would take about twice as long and is very unlikely to save me any money, as there is no direct route between here and there.
Ultimately it comes down to whether or not the car sells. I made a poor decision going for a limited edition model (yeah, really) when all I needed was a boggo car. If I can get the sort of money back which I paid for the car 3 months ago then happy days, but if I end up needing to keep it then so be it - it won't be the end of the world.
I've got a running spread-sheet here trying to calculate monthly outgoings and how we can reduce them whilst still putting some money away for the baby. At present I've got it down to about £900pcm for the house stuff, but the remainder still seems to trickle away.
Worst part of it all is of course we would be better off if I didn't work. If we were both on benefits I wouldn't need to worry about accommodation costs, friends I grew up with at school on Facebook who already have 4 or 5 kids living the life of riley and moaning about holidays, just boils your piss!
Ultimately our mutual decision to have a baby was made whilst we were both in employment and living at home with parents. I perhaps underestimated the costs of living in private accommodation with just my income, which was easily done because you don't appreciate the utility bills when they are being paid for you.
I raised the £1900 to pay for our letting agency fees, deposit and suchlike, so theoretically paying off the debt should be easy - but it isn't. Now I'm paying out 50% of my income in rent and bills, whilst Mrs C.A.R.s income is limited to whatever she can get through Jobseekers. At nearly 7 months preggers she's not the most motivated person to find work, what little there is to apply for.
My first priority is Mrs C.A.R.s happiness and security, so moving closer to work was a no-no. She has family here in the town who are local enough to help out when she needs it and she's unable to drive after failing her test earlier this year (would've made life much easier...). I live 18 miles from work, public transport between here and there would take about twice as long and is very unlikely to save me any money, as there is no direct route between here and there.
Ultimately it comes down to whether or not the car sells. I made a poor decision going for a limited edition model (yeah, really) when all I needed was a boggo car. If I can get the sort of money back which I paid for the car 3 months ago then happy days, but if I end up needing to keep it then so be it - it won't be the end of the world.
I've got a running spread-sheet here trying to calculate monthly outgoings and how we can reduce them whilst still putting some money away for the baby. At present I've got it down to about £900pcm for the house stuff, but the remainder still seems to trickle away.
Worst part of it all is of course we would be better off if I didn't work. If we were both on benefits I wouldn't need to worry about accommodation costs, friends I grew up with at school on Facebook who already have 4 or 5 kids living the life of riley and moaning about holidays, just boils your piss!
miln0039 said:
V8Triumph said:
Rent - £450 (lucky that houses are cheap round here, 2 bed semi with a 4 car drive. Not ideal for me IMO but got to compromise somewhere) Could live in a place like mine with a kid easily.
Council Tax - £120 Can't change this.
Bills (gas, electric, water rates) - £120 Can't change this.
BT phone + broadband - £40 This is cheaper than mobile phones, we make ALOT of calls. So you could get this down to about £35 per month.
Mobile phones - £5 (PAYG) Just use them for emergencies.
Car insurance - (4 x £200 = £800 p/a e/a) so £67 per month, this is for four cars. Pay your insurance off in one or you are only paying interest on it.
Fuel - £300. You already say you spend less on fuel than I do.
Food - £30 (Aldi is your friend) Don't underestimate your food shopping bill, we used to shop in Tesco / Sainsburys and saved about £15 per week going to Aldi / local shops / local cash and carry.
Clothes / Other stuff also needs to be taken into account.
£450 for a 2 bed semi? That's very good. I've just found somewhere after a long search and that's £765 a month.Council Tax - £120 Can't change this.
Bills (gas, electric, water rates) - £120 Can't change this.
BT phone + broadband - £40 This is cheaper than mobile phones, we make ALOT of calls. So you could get this down to about £35 per month.
Mobile phones - £5 (PAYG) Just use them for emergencies.
Car insurance - (4 x £200 = £800 p/a e/a) so £67 per month, this is for four cars. Pay your insurance off in one or you are only paying interest on it.
Fuel - £300. You already say you spend less on fuel than I do.
Food - £30 (Aldi is your friend
) Don't underestimate your food shopping bill, we used to shop in Tesco / Sainsburys and saved about £15 per week going to Aldi / local shops / local cash and carry.Clothes / Other stuff also needs to be taken into account.
I however then differ to you greatly and spend all my money on cars, good food, good wine and holidays. I've stopped going out pissing money up the wall on nights out though and stopped smoking which is an EPIC saving
Btw - £30 a month on food? Really?
Hmm I spend a lot of money on cars too but I don't buy depreciating modern boxes
As far as good food goes, much of the essential ingredients (e.g. meat) comes from local farm shop and is better than any supermarket bought stuff. Good does not always have to = expensive. I don't drink and unfortunately don't get to go on many holidays at the moment but work is half the problem with that.Dave200 said:
Agreed. How in God's name do you expect to pay off that amount of debt on £20kpa, while the asset is depreciating at a faster rate than the value of the loan?
Leave financial advice to the grownups, please.
What does depreciation have to do with it. He has a debt, he pays it off monthly until it is finished. Depreciation has naff all to do with it unless you want to sell the car and clear the debt. Leave the finances to the grown-ups please. Leave financial advice to the grownups, please.
SSBB said:
Dave200 said:
Agreed. How in God's name do you expect to pay off that amount of debt on £20kpa, while the asset is depreciating at a faster rate than the value of the loan?
Leave financial advice to the grownups, please.
What does depreciation have to do with it. He has a debt, he pays it off monthly until it is finished. Depreciation has naff all to do with it unless you want to sell the car and clear the debt. Leave the finances to the grown-ups please. Leave financial advice to the grownups, please.
If you think that's sound advice, then bully for you - but it sounds like complete nonsense to me. Advocating that someone borrows such a large proportion of their salary against something which doesn't hold its value is ludicrous...
Edited by Dave200 on Thursday 19th July 10:44
Dave200 said:
He financed half his pre-tax salary on a depreciating asset (and one that's going to depreciate rapidly, at a faster rate than he pays off the loan, if he's putting serious mileage on it), while living at home with his parents.
If you think that's sound advice, then bully for you - but it sounds like complete nonsense to me.
I don't think it's sound. But implying that it's not sound due to the depreciation rate isn't really fair. It's more the repayments vs income ratio.If you think that's sound advice, then bully for you - but it sounds like complete nonsense to me.
C.A.R. said:
Some food for thought on this thread, definitely.
Ultimately our mutual decision to have a baby was made whilst we were both in employment and living at home with parents. I perhaps underestimated the costs of living in private accommodation with just my income, which was easily done because you don't appreciate the utility bills when they are being paid for you.
I raised the £1900 to pay for our letting agency fees, deposit and suchlike, so theoretically paying off the debt should be easy - but it isn't. Now I'm paying out 50% of my income in rent and bills, whilst Mrs C.A.R.s income is limited to whatever she can get through Jobseekers. At nearly 7 months preggers she's not the most motivated person to find work, what little there is to apply for.
My first priority is Mrs C.A.R.s happiness and security, so moving closer to work was a no-no. She has family here in the town who are local enough to help out when she needs it and she's unable to drive after failing her test earlier this year (would've made life much easier...). I live 18 miles from work, public transport between here and there would take about twice as long and is very unlikely to save me any money, as there is no direct route between here and there.
Ultimately it comes down to whether or not the car sells. I made a poor decision going for a limited edition model (yeah, really) when all I needed was a boggo car. If I can get the sort of money back which I paid for the car 3 months ago then happy days, but if I end up needing to keep it then so be it - it won't be the end of the world.
I've got a running spread-sheet here trying to calculate monthly outgoings and how we can reduce them whilst still putting some money away for the baby. At present I've got it down to about £900pcm for the house stuff, but the remainder still seems to trickle away.
Worst part of it all is of course we would be better off if I didn't work. If we were both on benefits I wouldn't need to worry about accommodation costs, friends I grew up with at school on Facebook who already have 4 or 5 kids living the life of riley and moaning about holidays, just boils your piss!
You decided to have a baby whilst you were living at your parents?? Ultimately our mutual decision to have a baby was made whilst we were both in employment and living at home with parents. I perhaps underestimated the costs of living in private accommodation with just my income, which was easily done because you don't appreciate the utility bills when they are being paid for you.
I raised the £1900 to pay for our letting agency fees, deposit and suchlike, so theoretically paying off the debt should be easy - but it isn't. Now I'm paying out 50% of my income in rent and bills, whilst Mrs C.A.R.s income is limited to whatever she can get through Jobseekers. At nearly 7 months preggers she's not the most motivated person to find work, what little there is to apply for.
My first priority is Mrs C.A.R.s happiness and security, so moving closer to work was a no-no. She has family here in the town who are local enough to help out when she needs it and she's unable to drive after failing her test earlier this year (would've made life much easier...). I live 18 miles from work, public transport between here and there would take about twice as long and is very unlikely to save me any money, as there is no direct route between here and there.
Ultimately it comes down to whether or not the car sells. I made a poor decision going for a limited edition model (yeah, really) when all I needed was a boggo car. If I can get the sort of money back which I paid for the car 3 months ago then happy days, but if I end up needing to keep it then so be it - it won't be the end of the world.
I've got a running spread-sheet here trying to calculate monthly outgoings and how we can reduce them whilst still putting some money away for the baby. At present I've got it down to about £900pcm for the house stuff, but the remainder still seems to trickle away.
Worst part of it all is of course we would be better off if I didn't work. If we were both on benefits I wouldn't need to worry about accommodation costs, friends I grew up with at school on Facebook who already have 4 or 5 kids living the life of riley and moaning about holidays, just boils your piss!
Your Mrs. needs to get her driving test sorted out for a start as that will help her find a job. I can understand her not bothering at the moment - not being harsh but no employer is going to give a woman 7 months pregnant a job. However, she needs to spend this time now and once the baby is born getting herself employable. SSBB said:
Dave200 said:
He financed half his pre-tax salary on a depreciating asset (and one that's going to depreciate rapidly, at a faster rate than he pays off the loan, if he's putting serious mileage on it), while living at home with his parents.
If you think that's sound advice, then bully for you - but it sounds like complete nonsense to me.
I don't think it's sound. But implying that it's not sound due to the depreciation rate isn't really fair. It's more the repayments vs income ratio.If you think that's sound advice, then bully for you - but it sounds like complete nonsense to me.
The tipping point will come when the car is worth less than the value of the loan - in general terms, negative equity. I can't see that being too far off, and from there on in he's onto a loser no matter how you look at it. Unlike a house, the likelihood of the rate of depreciation changing significantly (let alone swinging into positive) is almost nil.
Now, I think I'm due an apology for the insult.
V8Triumph said:
I meant a week!
Hmm I spend a lot of money on cars too but I don't buy depreciating modern boxes As far as good food goes, much of the essential ingredients (e.g. meat) comes from local farm shop and is better than any supermarket bought stuff. Good does not always have to = expensive. I don't drink and unfortunately don't get to go on many holidays at the moment but work is half the problem with that.
I'd assumed you meant a week! In fairness, I probably only spend roughly that for me and the missus for 5 nights of the week - like you say, buying the ingredients rather than the ready made meals does make a big old difference. I am guilty of probably doubling this with a couple of nice meals over the weekends on average, as I do enjoy hosting too Hmm I spend a lot of money on cars too but I don't buy depreciating modern boxes
As far as good food goes, much of the essential ingredients (e.g. meat) comes from local farm shop and is better than any supermarket bought stuff. Good does not always have to = expensive. I don't drink and unfortunately don't get to go on many holidays at the moment but work is half the problem with that.I gave up smoking, drinking is my last refuge...!! But this would save me a FORTUNE!!!
If I was a little more handy with a spanner I would do something along the lines you do with having a classic car - but I'm next to useless. Shame really as I'd love an old Triumph or something with NIL depreciation. My Z4 Coupe does keep my happy though...!
Ditch the Focus get something cheap that you like,that bit seems obvious,then.......cheer the f*#* up!
Having a child is the most amazing thing and people are berating you over a few quid,I've got four ,my first when I was your age 25 years ago and I wouldn't change a thing. Kids don't cost millions and child benefit and,if you qualify ,working family tax credit will help. If you start eating s**# from Netto and walking to work it'll just make you and your new family depressed,don't listen to all the self righteous comments from powerfully built md's who pay cash for everything- lighten up and enjoy the next part of your life!
Having a child is the most amazing thing and people are berating you over a few quid,I've got four ,my first when I was your age 25 years ago and I wouldn't change a thing. Kids don't cost millions and child benefit and,if you qualify ,working family tax credit will help. If you start eating s**# from Netto and walking to work it'll just make you and your new family depressed,don't listen to all the self righteous comments from powerfully built md's who pay cash for everything- lighten up and enjoy the next part of your life!
Dave200 said:
But surely the amount he can repay is limited by his salary, thus meaning that the term of the loan is longer than it would normally be (I'm guessing 8yrs min), and exacerbating the effects of the poor decision to spend said finance on something which loses value quickly.
The tipping point will come when the car is worth less than the value of the loan - in general terms, negative equity. I can't see that being too far off, and from there on in he's onto a loser no matter how you look at it. Unlike a house, the likelihood of the rate of depreciation changing significantly (let alone swinging into positive) is almost nil.
Now, I think I'm due an apology for the insult.
8 years? Come on. He's probably financing over say, 48 months @ £250 per month as a rough figures. If he is on £21k, then is taking home about £1200 per month? Yes, most people on here might find that a bit rich, but to imply that he can't afford to pay it back due to "depreciation" is absurd.The tipping point will come when the car is worth less than the value of the loan - in general terms, negative equity. I can't see that being too far off, and from there on in he's onto a loser no matter how you look at it. Unlike a house, the likelihood of the rate of depreciation changing significantly (let alone swinging into positive) is almost nil.
Now, I think I'm due an apology for the insult.
Oh, if you think I have insulted you, you should maybe take a look at your own condescending post.
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