How the hell do people afford cars these days?
Discussion
Romford4 said:
Moved 2 years ago from a village where most folk were retired. They pretty much all drove sensible non-'premium' cars. Moved to a cheaper house on a new-build estate in a neighbouring town where none of my neighbours are retired. Despite mostly having 'normal' jobs (copper, school office administrator, car salesman etc) I notice a big difference in materialism... It's all BMW, Merc, LR/RR, Lexus round here. Along with the hot-tubs, designer shades, sleeve tattoos & so on there's a lot of conspicuous high-consumption lifestyles. Each to their own, YOLO, living-my-best-life & all that, but it seems that older folk recognise the value of things, have seen the economy go through a number of cycles, & understand how to cut their cloth accordingly. A lot of younger folk might be in for a wake-up call in the coming recession. No doubt it'll be called as the government's/middle-class'/boomers/pensioners/rich people's fault but this artifical economy of QE, low interest, easy credit & excessive consumption couldn't last forever and there's not much that a government of any political persuasion can do about it. If I was still on my low wage of a few years ago, it'd be a 10+ year old Aygo/C1/107 + some tools for me. If you can't afford to buy it outright then you can't afford it period.
As an aside, a lot of left leaning people got quite upset, wailing that 'America was turning in on itself' when Trump moved to make the US less reliant on imports & more self-sufficient. With the current situation in the world economy, that seems like a pretty sound philosophy right now.
It's not too dissimilar where we are. I feel we are the odd ones out on the street, with a 15 year old daily driver on the drive way.. Everyone else has some sort of premium branded car less than 3-4 years old.As an aside, a lot of left leaning people got quite upset, wailing that 'America was turning in on itself' when Trump moved to make the US less reliant on imports & more self-sufficient. With the current situation in the world economy, that seems like a pretty sound philosophy right now.
But I wonder if I'm living life wrong. In the end, when it all falls down I will have lived within my means, but will end up burdened with splitting the bill equally. But at some point I feel there will be a decision to be made as to whether we uproot and leave for somewhere with similar values - someplace where cash in the bank has more value than an over leveraged badge on the driveway.
981Boxess said:
I probably qualify for the older folk title, most people I know are around 60. When I posted up above that the majority of people I know bought their cars for cash (fact) I was pretty much called a liar and accused of making up stuff to fit the narrative. Why(?) - because if it were true they would have to come to terms with the fact there are others out there that are doing better than they are.
No.
As you've already been reminded - and chosen to ignore repeatedly - the context at the time was around how brand new cars were funded. You said you and your friends always bought your new cars with cash. This bemused many of us as (a) funding sources are not something that comes up in typical conversation with friends and (b) the funding of brand new cars with pure cash from savings is at odds with what most people in the trade would be seeing.
When pressed on this you then had to admit they werent new cars they bought but used cars "up to 2 years old" (which not by any stretch of the imagination meets the criteria of a brand new car). You've then distanced yourself further from that by not commenting on the age of the cars you're talking about at all as its clearly used car purchases youre referencing of which cash purchases would be quite common.
And further to that you seem obsessed that you're "doing better than" strangers on the internet, whom you have - wrongly - deduced are buying cars with PCP.
Edited by Deep Thought on Sunday 15th May 10:10
Ice_blue_tvr said:
It's not too dissimilar where we are. I feel we are the odd ones out on the street, with a 15 year old daily driver on the drive way.. Everyone else has some sort of premium branded car less than 3-4 years old.
But I wonder if I'm living life wrong. In the end, when it all falls down I will have lived within my means, but will end up burdened with splitting the bill equally. But at some point I feel there will be a decision to be made as to whether we uproot and leave for somewhere with similar values - someplace where cash in the bank has more value than an over leveraged badge on the driveway.
Yeah, me too. But I wonder if I'm living life wrong. In the end, when it all falls down I will have lived within my means, but will end up burdened with splitting the bill equally. But at some point I feel there will be a decision to be made as to whether we uproot and leave for somewhere with similar values - someplace where cash in the bank has more value than an over leveraged badge on the driveway.
My accountant just bought himself a new i4 40 M Sport and my local indy mechanic drives a X5 M50d he bought new.
I think i'll be scrutinising their bills more closely in future
Edited by Deep Thought on Sunday 15th May 10:07
Very much agree with the generational change in attitudes to debt.
I did a research project for a Bank about 15 years ago, that expected that the public would no longer see debt as a source of shame (the old “never a borrower or lender be” attitude) and would find it was now “a normal and practical way to manage large purchases or temporary shortfalls”.
Instead, the prevailing attitude was: “access to large amounts of debt is a right”. To give a sense of how embedded this view was, we had quite a few consumers who when asked how much their net worth was, included their credit limits .
I can fully understand why a public that is constantly consuming Social Media showing fantasy lifestyles would want the same, and when presented with the borrowing to do so would take it. What is missing is the regulation to ensure that people on reasonable earnings do have something left for their old age, and in the shorter term, are not so debt laden they can’t weather any kind of economic shock.
I did a research project for a Bank about 15 years ago, that expected that the public would no longer see debt as a source of shame (the old “never a borrower or lender be” attitude) and would find it was now “a normal and practical way to manage large purchases or temporary shortfalls”.
Instead, the prevailing attitude was: “access to large amounts of debt is a right”. To give a sense of how embedded this view was, we had quite a few consumers who when asked how much their net worth was, included their credit limits .
I can fully understand why a public that is constantly consuming Social Media showing fantasy lifestyles would want the same, and when presented with the borrowing to do so would take it. What is missing is the regulation to ensure that people on reasonable earnings do have something left for their old age, and in the shorter term, are not so debt laden they can’t weather any kind of economic shock.
981Boxess said:
When I posted up above that the majority of people I know bought their cars for cash (fact) I was pretty much called a liar....
Figures suggest it's around 92% of people. In the last 4-5 yrs I've bought 2 new cars on finance to get a manufacturer contribution. As soon as the finance paperwork dropped through the letterbox, I paid it off. The finance companies' quoted 92% is taken as gospel by many, but they never publish how many pay it off within a few weeks!Ice_blue_tvr said:
But at some point I feel there will be a decision to be made as to whether we uproot and leave for somewhere with similar values - someplace where cash in the bank has more value than an over leveraged badge on the driveway.
Wife has family that retired to rural France. They are minted but conspicuous displays of wealth would be considered vulgar & out-of-keeping in the area they now call home. I can see us retiring to Seville or Valencia. For the time being though, I can see us moving back to our old village where the older population have zero interest in whether someone drives an Aygo or an Aston.Takes all sorts though. The young couple that live behind me have recently handed back their two PCP'd Cooper S's & bought a couple of Citroen C1s (9 & 13 yrs old). You know they've tried the materialistic thing but decided financial security is better. On the other hand my Sandero driving French neighbour across the road has just taken delivery of a RR on PCP. I wonder if he really wanted a RR, or was there a tiny bit of 'keeping up' involved given that RRs seem to be the default vehicle of choice for so many houses in the street.
Romford4 said:
981Boxess said:
When I posted up above that the majority of people I know bought their cars for cash (fact) I was pretty much called a liar....
Figures suggest it's around 92% of people. In the last 4-5 yrs I've bought 2 new cars on finance to get a manufacturer contribution. As soon as the finance paperwork dropped through the letterbox, I paid it off. The finance companies' quoted 92% is taken as gospel by many, but they never publish how many pay it off within a few weeks!Used cars, yes, absolutely. Loads of people buying with cash, myself included. The cheaper the used cars the more likelihood of that also.
To elaborate further - around 90% of new cars are bought "on finance", but that is specifically car finance and wouldnt include cars bought with a cheap personal loan, offset mortgage, 0% credit card, extended overdraft facility, etc
https://www.reuters.com/article/uk-britain-economy...
The coming year or two will be a cruel reality check, with the end of 'cheap' credit. That said the spread dealers/finance houses are getting against record low IRs entirely puts me off getting a new car. Waiting till next summer to see how bad our economy gets. The potential shock to the housing market could bring this phase of consumerism to an end.
The era of the RR on PCP sat outside a house that costs not much more will be over by next year.
Hopefully we'll see some sense return to car prices in general too.
The era of the RR on PCP sat outside a house that costs not much more will be over by next year.
Hopefully we'll see some sense return to car prices in general too.
Cups Renault said:
The coming year or two will be a cruel reality check, with the end of 'cheap' credit. That said the spread dealers/finance houses are getting against record low IRs entirely puts me off getting a new car. Waiting till next summer to see how bad our economy gets. The potential shock to the housing market could bring this phase of consumerism to an end.
The era of the RR on PCP sat outside a house that costs not much more will be over by next year.
Hopefully we'll see some sense return to car prices in general too.
The problem - as you've said - is that the manufacturers and dealers are going for margin not volume, because of reduced supply. The era of the RR on PCP sat outside a house that costs not much more will be over by next year.
Hopefully we'll see some sense return to car prices in general too.
This is bad news for those wanting a new car - as has been said, many are just holding on to their cars now at the end of the term rather than face 50% higher "monthlies" or a wait for 1+ years on even quite a middle of the road model - but its also bad news for used car buyers also. Prices on most used cars seem to be up around 20% easily.
981Boxess said:
Deep Thought said:
981Boxess said:
Deep Thought said:
This bemused many of us........
It seems to be a particular obsession of yours but no matter, I have already dealt with that in my previous post.Dont make stuff up and i wont pull you on it. Simples.
981Boxess said:
Deep Thought said:
Dont make stuff up and i wont pull you on it. Simples.
You actually believe what you think or post matters to someone other than you?I guess with 30984 post in 174 months you must do
I can relate to many of the recent comments on here and its only when you get posts like this you can get a feel for the scale of the problem facing us as a country / economy if things start to take a turn for the worst.
The current generation will not doubt blame everything except themselves when the magic money tree fails to provide.
Many of those living in and around us are approaching or already retired who see little in having the latest model cars, instead opting to buy outright and keep for 10+ years a volvo, Toyota or more recently South Korean models due to their long warranties, although a proper camper van has also become popular with them in recent years from the retirement pots.
They just seem to value quality, it's not so easy come easy go, cars are well maintained, always clean and expected to last being serviced when required.
These are people who have worked 35+ years, bought their houses in the mid 80s and have likely been mortgage free for many years with a property now worth many times what they paid for it and now either in receipt of a good pension or getting close to one.
Contrast that to a new estate around 3 miles from where we live, lots of couples and young families, a mix of housing but you cannot ignore the different vehicles parked up and around there, you will really struggle to find anything more than 5 years old, most properties have 2 cars. Everyone walking around with branded sports clothing, nice artificial tans, expensive pets and all the trimmings.
The housing estate is only 6-8 year old, but already you can see from the few that have been on the market for sale that they are kitted out both in side and out with a garden summerhouse / bar / jacquzzi which are all the craze there.
A friend of ours works for Next, and she was only saying recently that its not uncommon for customers there to have £5k+ on their credit accounts having kitted their houses out with Next furniture. Our first house was 50% second hand furniture and even today some 28 years later I could not bring myself to put on credit that amount in a high street store and pay that level of interest.
I am not making judgement about which group is right or wrong here, but when you see a couple / young family with a new house that is fully kitted with 2 newish cars outside, designer clothing /*electronics etc you do wonder how they afford it, are they putting anything into savings, how much of a buffer do they have against losing a job or as we are seeing finance costs increasing.
Each to their own, but I just don't think many have thought it through, since the 2008 crash we have had pretty much uninterrupted growth with historic low borrowing costs and house prices rising more than the costs of mortgages. After such a long period and never having esperinced a downturn many I guess think it will ever end and sticking everything on a credit card is just the way of the world, worst case we sell the house pocket the profit and clear the debt attitude,
The older generation however will educate you about negative equity and seeing family homes repossessed and cars being taken away.
With many new properties today purchased with help to buy, it would not take much for many finding it easier to hand the keys back and walk away.
The current generation will not doubt blame everything except themselves when the magic money tree fails to provide.
Many of those living in and around us are approaching or already retired who see little in having the latest model cars, instead opting to buy outright and keep for 10+ years a volvo, Toyota or more recently South Korean models due to their long warranties, although a proper camper van has also become popular with them in recent years from the retirement pots.
They just seem to value quality, it's not so easy come easy go, cars are well maintained, always clean and expected to last being serviced when required.
These are people who have worked 35+ years, bought their houses in the mid 80s and have likely been mortgage free for many years with a property now worth many times what they paid for it and now either in receipt of a good pension or getting close to one.
Contrast that to a new estate around 3 miles from where we live, lots of couples and young families, a mix of housing but you cannot ignore the different vehicles parked up and around there, you will really struggle to find anything more than 5 years old, most properties have 2 cars. Everyone walking around with branded sports clothing, nice artificial tans, expensive pets and all the trimmings.
The housing estate is only 6-8 year old, but already you can see from the few that have been on the market for sale that they are kitted out both in side and out with a garden summerhouse / bar / jacquzzi which are all the craze there.
A friend of ours works for Next, and she was only saying recently that its not uncommon for customers there to have £5k+ on their credit accounts having kitted their houses out with Next furniture. Our first house was 50% second hand furniture and even today some 28 years later I could not bring myself to put on credit that amount in a high street store and pay that level of interest.
I am not making judgement about which group is right or wrong here, but when you see a couple / young family with a new house that is fully kitted with 2 newish cars outside, designer clothing /*electronics etc you do wonder how they afford it, are they putting anything into savings, how much of a buffer do they have against losing a job or as we are seeing finance costs increasing.
Each to their own, but I just don't think many have thought it through, since the 2008 crash we have had pretty much uninterrupted growth with historic low borrowing costs and house prices rising more than the costs of mortgages. After such a long period and never having esperinced a downturn many I guess think it will ever end and sticking everything on a credit card is just the way of the world, worst case we sell the house pocket the profit and clear the debt attitude,
The older generation however will educate you about negative equity and seeing family homes repossessed and cars being taken away.
With many new properties today purchased with help to buy, it would not take much for many finding it easier to hand the keys back and walk away.
Edited by Theoldguard on Sunday 15th May 13:52
Deep Thought said:
No.
As you've already been reminded - and chosen to ignore repeatedly - the context at the time was around how brand new cars were funded. You said you and your friends always bought your new cars with cash. This bemused many of us as (a) funding sources are not something that comes up in typical conversation with friends and (b) the funding of brand new cars with pure cash from savings is at odds with what most people in the trade would be seeing.
When pressed on this you then had to admit they werent new cars they bought but used cars "up to 2 years old" (which not by any stretch of the imagination meets the criteria of a brand new car). You've then distanced yourself further from that by not commenting on the age of the cars you're talking about at all as its clearly used car purchases youre referencing of which cash purchases would be quite common.
And further to that you seem obsessed that you're "doing better than" strangers on the internet, whom you have - wrongly - deduced are buying cars with PCP.
Edited by Deep Thought on Sunday 15th May 10:10
Technoholic said:
I’m not commenting on most of your points here but I have to say, how we find our cars, houses, pensions, savings and lifestyle is a point of conversation that comes up ALL the time in my group of friends, both close and extended, some of whom are doing really well and some are on the other end of the spectrum. And I am glad it does, and so are they, because it’s an open an honest discussion among friends that ultimately has provided lots and lots of advice to all of us in various ways over the years. For context, I’m 37 and most of them are a similar age, and I wouldn’t want it any other way. I don’t know anyone of my generation or older who don’t talk about this stuff openly because it just helps everyone.
I can understand people talking about how they got or how to get the best deal or offer on something, but the idea of everyone dropping in to conversation "well of course, i bought this with cash you know" was bemusing, particularly as these days its unlikely to get you the best price on a new car anyway.I'm all for sharing info on getting the best deal on things, particularly in the current climate.
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.
One company I've worked for has just reduced their pay for seasonal staff by 15%. It's a casual fill-in job for me but I don't need it so I'm giving it a miss this year, but that's a hefty pay-drop against inflation that might top 10% later this year. I'm semi-retired but working almost full-time at present to keep up with inflation. I'd feel extremely uncomfortable if I was heavily indebted at this time.Edited by Theoldguard on Thursday 12th May 20:18
What I'm always amazed at is that the 'must have it now brigade' are so unable to make sacrifices for a few years early on. They now buy everything on credit & I don't think it registers that they'll forever live a more expensive life than those who were frugal unless they can break out of that mindset. I think many genuinely believe that they have 'made it' & are entitled to the 'trappings of success'. In my book however, if you need someone else's money to buy your s
t then you can't afford it & your 'success' is an self-created illusion.Edited by anonymous-user on Sunday 15th May 22:59
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