How the hell do people afford cars these days?
Discussion
Technoholic said:
I've read through most, but not all, of this thread. I'm still at a loss as to the best way to finance my new car that is due in about 4 months.
The default response I seem to get is invest the capital and take a PCP, but even if I could get a better growth on the investment than the PCP would cost me, I still don't like being committed to £1000+ a month on a PCP. Those people don't take that real life feeling into their advice.
I do just want to do what is the most financially sensible but I seem to not be able to work it out!
Would be keen to know how anyone is getting any decent return on their investments at the moment - every time I log into my Vanguard since November I cry.The default response I seem to get is invest the capital and take a PCP, but even if I could get a better growth on the investment than the PCP would cost me, I still don't like being committed to £1000+ a month on a PCP. Those people don't take that real life feeling into their advice.
I do just want to do what is the most financially sensible but I seem to not be able to work it out!
Technoholic said:
I've read through most, but not all, of this thread. I'm still at a loss as to the best way to finance my new car that is due in about 4 months.
The default response I seem to get is invest the capital and take a PCP, but even if I could get a better growth on the investment than the PCP would cost me, I still don't like being committed to £1000+ a month on a PCP. Those people don't take that real life feeling into their advice.
I do just want to do what is the most financially sensible but I seem to not be able to work it out!
Whats the car and whats the price of it? PCP deals on new cars can be quite expensive compared to what they used to be.The default response I seem to get is invest the capital and take a PCP, but even if I could get a better growth on the investment than the PCP would cost me, I still don't like being committed to £1000+ a month on a PCP. Those people don't take that real life feeling into their advice.
I do just want to do what is the most financially sensible but I seem to not be able to work it out!
pb8g09 said:
Would be keen to know how anyone is getting any decent return on their investments at the moment - every time I log into my Vanguard since November I cry.
Well exactly, I've stopped logging in much recently, just trying to put trust in the market long term to do what I need!Deep Thought said:
Whats the car and whats the price of it? PCP deals on new cars can be quite expensive compared to what they used to be.
RS6, 110k but I haven't got any real PCP quotes on it yet, as I've not really considered it until recently. Technoholic said:
pb8g09 said:
Would be keen to know how anyone is getting any decent return on their investments at the moment - every time I log into my Vanguard since November I cry.
Well exactly, I've stopped logging in much recently, just trying to put trust in the market long term to do what I need!Deep Thought said:
Whats the car and whats the price of it? PCP deals on new cars can be quite expensive compared to what they used to be.
RS6, 110k but I haven't got any real PCP quotes on it yet, as I've not really considered it until recently. Oracle Finance might be the people to talk to, or similar.
Deep Thought said:
From their website it looks like their PCP finance rate is at 6.8% APR so on a four year PCP you'd be seeing £20,000 to £25,000 of interest charges.
Oracle Finance might be the people to talk to, or similar.
Yeah I just don't think I can stomach that, I can't make that much off the capital in that time so that's interest to account for plus depreciation, surely PCP doesn't make sense?Oracle Finance might be the people to talk to, or similar.
Technoholic said:
Deep Thought said:
From their website it looks like their PCP finance rate is at 6.8% APR so on a four year PCP you'd be seeing £20,000 to £25,000 of interest charges.
Oracle Finance might be the people to talk to, or similar.
Yeah I just don't think I can stomach that, I can't make that much off the capital in that time so that's interest to account for plus depreciation, surely PCP doesn't make sense?Oracle Finance might be the people to talk to, or similar.
Deep Thought said:
As i said, no PCP doesnt make much sense right now on most deals as manufacturers arent incentivising them.
Times have changed….I wonder if we will see such incentivised deals in the short to medium term. If not then that other poster will be a snapshot of so many individuals realising or facing cost to change is materially higher
pb8g09 said:
Would be keen to know how anyone is getting any decent return on their investments at the moment - every time I log into my Vanguard since November I cry.
You could look at relatively low risk Protected Capital funds such as Ruffer and Capital Geared Trust but they have a relatively high underlying fees.As ever it depends on your risk profile and how long you are staying invested.
Biggest problem atm apart from the obvious swing away from inflationary hit growth stocks is inflation eating into capital so holding cash could cost you more than potential market losses staying invested.
av185 said:
You could look at relatively low risk Protected Capital funds such as Ruffer and Capital Geared Trust but they have a relatively high underlying fees.
As ever it depends on your risk profile and how long you are staying invested.
Biggest problem atm apart from the obvious swing away from inflationary hit growth stocks is inflation eating into capital so holding cash could cost you more than potential market losses staying invested.
What's the minimum investment with Ruffer?As ever it depends on your risk profile and how long you are staying invested.
Biggest problem atm apart from the obvious swing away from inflationary hit growth stocks is inflation eating into capital so holding cash could cost you more than potential market losses staying invested.
CGT are -0.3% this year - so my point still stands on that one.
Appreciate the inflation, but that's not what the OP was saying - he was implying that people claim that instead of paying cash for a car, they invest the money elsewhere at a higher rate than their APR - so if Ruffer doesn't accept £30k portfolios then that's not an alternative to cash purchasing a £30k car.
pb8g09 said:
What's the minimum investment with Ruffer?
CGT are -0.3% this year - so my point still stands on that one.
Appreciate the inflation, but that's not what the OP was saying - he was implying that people claim that instead of paying cash for a car, they invest the money elsewhere at a higher rate than their APR - so if Ruffer doesn't accept £30k portfolios then that's not an alternative to cash purchasing a £30k car.
Using that theory, shouldn't we all just borrow £50k from the bank and then invest it? - as long as the return % is higher than the interest rate of the loan then we are literally living on someone else's money?CGT are -0.3% this year - so my point still stands on that one.
Appreciate the inflation, but that's not what the OP was saying - he was implying that people claim that instead of paying cash for a car, they invest the money elsewhere at a higher rate than their APR - so if Ruffer doesn't accept £30k portfolios then that's not an alternative to cash purchasing a £30k car.
Pixelpeep 135 said:
Using that theory, shouldn't we all just borrow £50k from the bank and then invest it? - as long as the return % is higher than the interest rate of the loan then we are literally living on someone else's money?
I very much doubt that's possible. And as all investment opportunities state, the value can go down as well as up. It'd be a very risky strategy to try and beat the banks and one which could easily leave you with debts you can't pay.ChrisH72 said:
I very much doubt that's possible. And as all investment opportunities state, the value can go down as well as up. It'd be a very risky strategy to try and beat the banks and one which could easily leave you with debts you can't pay.
But it’s an idea we’ve all sat and thought about with a drink in our hands at some point.... #StickitallonredBorrowing money is like drinking on a night out.
When you go out drinking the happiness you experience is pulled forward from the next two days where you likely suffer (those of us with hangovers specifically)
The thing is, some people are happy with that.
If a car finance deal can bring forward some happiness in your life, or provide new opportunities then it's worth the interest rate in my eyes.
When you go out drinking the happiness you experience is pulled forward from the next two days where you likely suffer (those of us with hangovers specifically)
The thing is, some people are happy with that.
If a car finance deal can bring forward some happiness in your life, or provide new opportunities then it's worth the interest rate in my eyes.
a_dreamer said:
Borrowing money is like drinking on a night out.
When you go out drinking the happiness you experience is pulled forward from the next two days where you likely suffer (those of us with hangovers specifically)
The thing is, some people are happy with that.
If a car finance deal can bring forward some happiness in your life, or provide new opportunities then it's worth the interest rate in my eyes.
But drinking lots for a long time really means you don’t get hangovers …. When you go out drinking the happiness you experience is pulled forward from the next two days where you likely suffer (those of us with hangovers specifically)
The thing is, some people are happy with that.
If a car finance deal can bring forward some happiness in your life, or provide new opportunities then it's worth the interest rate in my eyes.
Liver failure is the ultimate outcome / bankruptcy
Inflation should eat away at any debt especially if we get decent wage inflation. However many are pointing more towards a period of stagflation, so that will be very risky for many who do not see much in the way of a pay rise, or if pay rises just do not keep up with rates of inflation. You end up servicing the same debt with less money available.
With rising IR(and I think we may have to go hard and fast here) in order to starve off consumer side inflation, PCP deals are going to get more expensive, this is where cash in many respects becomes king again but holding it in a high inflation environment is like throwing pound coins out the window. Difficult to see where this might go, the other risk is if we do get a major slow down that jobs start to go as well as businesses fight for survival. Alot of new jobs have been created over the last few years during the good times, few jobs are immune from an economic shock these days. Once the spending slows down the jobs normally follow unfortunately.
It's a rock and hard place, people not prepared to pay the prices due to a lack of cash / finance, business unable to lower costs due to the higher input costs, so it's employment costs where savings may have to be made eventually.
With rising IR(and I think we may have to go hard and fast here) in order to starve off consumer side inflation, PCP deals are going to get more expensive, this is where cash in many respects becomes king again but holding it in a high inflation environment is like throwing pound coins out the window. Difficult to see where this might go, the other risk is if we do get a major slow down that jobs start to go as well as businesses fight for survival. Alot of new jobs have been created over the last few years during the good times, few jobs are immune from an economic shock these days. Once the spending slows down the jobs normally follow unfortunately.
It's a rock and hard place, people not prepared to pay the prices due to a lack of cash / finance, business unable to lower costs due to the higher input costs, so it's employment costs where savings may have to be made eventually.
Edited by Theoldguard on Thursday 12th May 20:18
Theoldguard said:
Inflation should eat away at any debt especially if we get decent wage inflation. However many are pointing more towards a period of stagflation, so that will be very risky for many who do not see much in the way of a pay rise, or if pay rises just do not keep up with rates of inflation. You end up servicing the same debt with less money available.
With rising IR(and I think we may have to go hard and fast here) in order to starve off consumer side inflation, PCP deals are going to get more expensive, this is where cash in many respects becomes king again but holding it in a high inflation environment is like throwing pound coins out the window. Difficult to see where this might go, the other risk is if we do get a major slow down that jobs start to go as well as businesses fight for survival. Alot of new jobs have been created over the last few years during the good times, few jobs are immune from an economic shock these days. Once the spending slows down the jobs normally follow unfortunately.
It's a rock and hard place, people not prepared to pay the prices due to a lack of cash / finance, business unable to lower costs due to the higher input costs, so it's employment costs where savings may have to be made eventually.
Food prices fuel prices energy prices cannot be influenced by UK population. With rising IR(and I think we may have to go hard and fast here) in order to starve off consumer side inflation, PCP deals are going to get more expensive, this is where cash in many respects becomes king again but holding it in a high inflation environment is like throwing pound coins out the window. Difficult to see where this might go, the other risk is if we do get a major slow down that jobs start to go as well as businesses fight for survival. Alot of new jobs have been created over the last few years during the good times, few jobs are immune from an economic shock these days. Once the spending slows down the jobs normally follow unfortunately.
It's a rock and hard place, people not prepared to pay the prices due to a lack of cash / finance, business unable to lower costs due to the higher input costs, so it's employment costs where savings may have to be made eventually.
Edited by Theoldguard on Thursday 12th May 20:18
So upping interest rates in the UK will do exactly what to change those prices?
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