How the hell do people afford cars these days?
Discussion
Dave Hedgehog said:
does this affect the tax benefits of paying into a pension fund?
No, the 25% tax free lump sum is just a nice little free gift from the Gov - no adverse effects from taking it.How long this benefit will last - that's another matter as it's always discussed as being 'under review' come budget time and with the HMGov coffers in a dire post-covid state, all bets are off as to what will happen in the future, especially if Labour get in next time
Dave Hedgehog said:
its amazing how much you can piss up the wall buying lunch, coffee, takeaways, alcohol etc.
Buying lunch when in the office adds up big time - there is a nice deli near work but its so expensive these days, I'm surprised the number of people who go there multiple times a week.The cost of a pint in a pub these days is nuts....
The cost of cars is nuts at the moment, even for pretty mundane stuff.
We have two cars, both smelly diesels...
A Rover 75 which my father in law gave me for nothing,
A 17 plate Nissan Cashcow, pay £14k for it used.
Insurance is £60 a month for both (including business)
Tax is whatever that is per month, no idea £50?
Rover does 30(?)mpg, nissan 35mpg - so something like £80-120 on fuel between the two of us.
Rover costs £40 a month (annually) in repairs.
Nissan we paid £95 for 3 years servicing, 2 years to go.
So I think (not including tires and such like) our two cars cost us about £200 to £250 a month all in to run.
Why, because they're old and cheap, we don't drive all over the place, we don't drive new ones.
We pay significantly more however on other 'choices' that we could divert into fancy cars if we wanted to.
A Rover 75 which my father in law gave me for nothing,
A 17 plate Nissan Cashcow, pay £14k for it used.
Insurance is £60 a month for both (including business)
Tax is whatever that is per month, no idea £50?
Rover does 30(?)mpg, nissan 35mpg - so something like £80-120 on fuel between the two of us.
Rover costs £40 a month (annually) in repairs.
Nissan we paid £95 for 3 years servicing, 2 years to go.
So I think (not including tires and such like) our two cars cost us about £200 to £250 a month all in to run.
Why, because they're old and cheap, we don't drive all over the place, we don't drive new ones.
We pay significantly more however on other 'choices' that we could divert into fancy cars if we wanted to.
My FB feed just listed an ad from a local VW dealer for a used 1.5tsi Passat estate R-Line. A 'smoking deal' apparently. Ok it's only 4 months old and it has a decent spec list but the PCP finance deal is £439/m with £3.2K down! That works out at £503/m amortized....for a Passat. And judging by the amount of people tagging others in the comments and oooohing and ahhhing over it I assume it will sell quite quickly. I'll say that again....£503/m for a Passat, and not even a new one at that. Madness.
Dave Hedgehog said:
so what if they never own it
my train ticket is over £300 a month, i will never own the train, its just a mobility cost, same thing with a car
It's not the same with a car, as if you're spending that monthly figure on something you do/would own, then at the end you have an asset that can be sold allowing you to recoup some of what you have spent. my train ticket is over £300 a month, i will never own the train, its just a mobility cost, same thing with a car
There must be a cost effective compromise between true ' bangernomoics" and buying nearly new. Despite news coverage about used prices there is still OK stuff round between 3 and 5k. People on this forum are better qualified to find these. Also cars with zero or very low tax are still in the respectable category and of course diesel can still cut costs. There are many posts too from members who have felt liberated by breaking away from the ' must have new' treadmill.
Edited by Lester H on Tuesday 8th March 13:00
Canon_Fodder said:
No, the 25% tax free lump sum is just a nice little free gift from the Gov - no adverse effects from taking it.
How long this benefit will last - that's another matter as it's always discussed as being 'under review' come budget time and with the HMGov coffers in a dire post-covid state, all bets are off as to what will happen in the future, especially if Labour get in next time
I have two private pensions so can I pull 25% out of each with no cap once I am 55 based on current rules or can it only be from one and is there a cap, of if I say had 1M in there could I pull 250k tax free come 55?How long this benefit will last - that's another matter as it's always discussed as being 'under review' come budget time and with the HMGov coffers in a dire post-covid state, all bets are off as to what will happen in the future, especially if Labour get in next time
I've had various tasty stuff in the past - M5, CLS63, M2 and some Porsches.
Whilst I could afford to still run this kind of stuff, I've found that modern cars are generally far too boring and image-led to be interesting to me any more.
Current fleet is;
- Seat Mii electric (mine) - £160 a month lease, £5 per week fuel for 150 miles or so I think. No RFL and servicing is minimal.
- Peugeot e-2008 (wife's) - £.300 a month salary sacrifice (no deposit, maintenance or insurance to pay) - we probably spend £10 per week on fuelling it
Both are competent daily drivers, very nippy and in the case of the Mii, great fun to nail it about everywhere.
I know cheap EV running costs wont be for ever but the thought of the current purchase/lease/running costs of most stuff is of no interest to me any more.
I do have a motorbike for thrills, and if I fancy a fun car it will be a small crazy thing from around 10-15 years ago as the experience is more pure than later bloated/farty/big power/too much grip cars of today
Whilst I could afford to still run this kind of stuff, I've found that modern cars are generally far too boring and image-led to be interesting to me any more.
Current fleet is;
- Seat Mii electric (mine) - £160 a month lease, £5 per week fuel for 150 miles or so I think. No RFL and servicing is minimal.
- Peugeot e-2008 (wife's) - £.300 a month salary sacrifice (no deposit, maintenance or insurance to pay) - we probably spend £10 per week on fuelling it
Both are competent daily drivers, very nippy and in the case of the Mii, great fun to nail it about everywhere.
I know cheap EV running costs wont be for ever but the thought of the current purchase/lease/running costs of most stuff is of no interest to me any more.
I do have a motorbike for thrills, and if I fancy a fun car it will be a small crazy thing from around 10-15 years ago as the experience is more pure than later bloated/farty/big power/too much grip cars of today
It does make me wonder sometimes as we have no mortgage and a decent enough income but would be very wary of spurging 400 quid plus a month for a car to do a couple of hundred miles a month in.
My thinking is, you have people on much higher incomes, maybe with lower outgoings.
Inheritances, someone I know lost both parents in just over a year and shared well over a million quid with her brother, another person I know lost her mother and got half of her estate and then her partner and got his, probably 750 grand or more.
Lottery wins, family down our road bought their house apparently with a lottery win.
Cash economy, local takeaway has a permanently broken card machine, been seen burning receipts on numerous occasions, always says "Cash is king" and drives a brand new X5. Will be partly because he runs a successful food business, but also due to tax evasion. See also car washes, counterfeit goods, drugs, supercar hire, car sales, chops shops, crash for cash.
Wealthy foreign visitors like the guys in the supercars in London charging about.
Lot of new cars are Motability funded.
Insurance/legal payout, you see folk get unfair dismissal or discrimination awards in the hundreds of thousands.
Equity release/downsizing, frees up capital, same with pension lump sums.
Bonusses/Big commission payments, some jobs pay huge bonusses.
Plus, the one that everyone goes on about, finance, PCP and all that.
Oh, and OnlyFans and that kind of thing, show genitals, receive cash, buy shiny things.
My thinking is, you have people on much higher incomes, maybe with lower outgoings.
Inheritances, someone I know lost both parents in just over a year and shared well over a million quid with her brother, another person I know lost her mother and got half of her estate and then her partner and got his, probably 750 grand or more.
Lottery wins, family down our road bought their house apparently with a lottery win.
Cash economy, local takeaway has a permanently broken card machine, been seen burning receipts on numerous occasions, always says "Cash is king" and drives a brand new X5. Will be partly because he runs a successful food business, but also due to tax evasion. See also car washes, counterfeit goods, drugs, supercar hire, car sales, chops shops, crash for cash.
Wealthy foreign visitors like the guys in the supercars in London charging about.
Lot of new cars are Motability funded.
Insurance/legal payout, you see folk get unfair dismissal or discrimination awards in the hundreds of thousands.
Equity release/downsizing, frees up capital, same with pension lump sums.
Bonusses/Big commission payments, some jobs pay huge bonusses.
Plus, the one that everyone goes on about, finance, PCP and all that.
Oh, and OnlyFans and that kind of thing, show genitals, receive cash, buy shiny things.
Some interesting feedback and comments.
Thanks for contributing.
In my mind it seems like madness having PCP deals that are close to a mortgage payment is just crazy. Not wrong by any stretch but not for me!
At heart I'm a bit tight and I'm not bothered about impressing anyone with my car choices. On the other hand, I'm a car fan and I like to have something interesting for myself, by interesting I don't mean top of the line AMG, RS, M range. Honda E is interesting to me as much as a C63 is for different reasons.
Both of which are expensive no matter how you finance them.
I'm also making an assumption that some people have a company car allowance that they must spend on a car so they go and max out their allowance. I don't have that so my willingness to drop minimum £400 on a car each month is exceedingly low.
I also don't like to end the month with no money left, essentially living pay check to pay check. That's not comfortable for me, I live well within my means. I guess that philosophy isn't shared by all.
Thanks for contributing.
In my mind it seems like madness having PCP deals that are close to a mortgage payment is just crazy. Not wrong by any stretch but not for me!
At heart I'm a bit tight and I'm not bothered about impressing anyone with my car choices. On the other hand, I'm a car fan and I like to have something interesting for myself, by interesting I don't mean top of the line AMG, RS, M range. Honda E is interesting to me as much as a C63 is for different reasons.
Both of which are expensive no matter how you finance them.
I'm also making an assumption that some people have a company car allowance that they must spend on a car so they go and max out their allowance. I don't have that so my willingness to drop minimum £400 on a car each month is exceedingly low.
I also don't like to end the month with no money left, essentially living pay check to pay check. That's not comfortable for me, I live well within my means. I guess that philosophy isn't shared by all.
TREMAiNE said:
Dave Hedgehog said:
so what if they never own it
my train ticket is over £300 a month, i will never own the train, its just a mobility cost, same thing with a car
It's not the same with a car. my train ticket is over £300 a month, i will never own the train, its just a mobility cost, same thing with a car
It get's pulled out every time the subject of Car financing or leasing comes up and it's completely meaningless.
If you only buy cars with cash, good for you. Don't expect a medal for being one of the minority who would rather spend their own money upfront rather than the banks.
Everyone's circumstances are different. Some earn a lot, some don't have kids, some inherited money.
Your eye is being drawn to the nice cars, you unconsciously dont see the 2006 plate citroens and fords.
OP; On 100k, you are not 'average Joe', but far above it. But I do get where you are coming from. We earn about £15k less but are in Wales where i suppose its a bit cheaper, but have kids. Im not claiming im poor, in fact, i suspect im actually well off compared to most. But buying a new family car is completely out of reach to me. Even a new 1litre fiesta starts at £19k if you dont go for the absolute poverty spec!
But i suppose the cost of cars just reflect the cost of living crisis. I think we are in for a tough few years.
Your eye is being drawn to the nice cars, you unconsciously dont see the 2006 plate citroens and fords.
OP; On 100k, you are not 'average Joe', but far above it. But I do get where you are coming from. We earn about £15k less but are in Wales where i suppose its a bit cheaper, but have kids. Im not claiming im poor, in fact, i suspect im actually well off compared to most. But buying a new family car is completely out of reach to me. Even a new 1litre fiesta starts at £19k if you dont go for the absolute poverty spec!
But i suppose the cost of cars just reflect the cost of living crisis. I think we are in for a tough few years.
Edited by covmutley on Tuesday 8th March 13:25
Pablo16v said:
My FB feed just listed an ad from a local VW dealer for a used 1.5tsi Passat estate R-Line. A 'smoking deal' apparently. Ok it's only 4 months old and it has a decent spec list but the PCP finance deal is £439/m with £3.2K down! That works out at £503/m amortized....for a Passat. And judging by the amount of people tagging others in the comments and oooohing and ahhhing over it I assume it will sell quite quickly. I'll say that again....£503/m for a Passat, and not even a new one at that. Madness.
I bought a new Passat Estate in Jan 2020, just before Covid hit. It was the older B8 rather than B8.5 facelift so the dealer was keen to get rid.I think I'm paying about £238 pm over 4 years for my Passat Estate using PCP, but part-ex'ed a MINI. It was the cheapest way to own the Passat outright as a 10 year family car because of the £3k finance contribution that I wouldn't have got with cash.
An interesting comparison I've often wondered about is:
Value of car, vs Value of house.
Both our cars work out at roughly 2.35%
The next street some houses are at around 20% I'd guess.
That's one very obvious illustration of how people spend their money differently. (naturally mortgages and leasing of cars are all different etc.)
Value of car, vs Value of house.
Both our cars work out at roughly 2.35%
The next street some houses are at around 20% I'd guess.
That's one very obvious illustration of how people spend their money differently. (naturally mortgages and leasing of cars are all different etc.)
Lester H said:
There must be a cost effective compromise between true ' bangernomoics" and buying nearly new. Despite news coverage about used prices there is still OK stuff round between 3 and 5k. People on this forum are better qualified to find these. Also cars with zero or very low tax are still in the respectable category and of course diesel can still cut costs. There are many posts too from members who have felt liberated by breaking away from the ' must have new' treadmill.
Absolutely, I live in Greater London so by the end of next year if I want to drive my diesel shed I will need to give £12.50 a day to comrade Khan. It will be going way before then, and between £3k and £5K is probably how much I will spend on it's replacement, possibly on a Petrol Kia Rio.I broke away from the new car treadmill back in 2003 and for me the benefits far outweigh the temporary new car feeling.
Although I obviously understand the implications of the pandemic and supply chain issues, that doesn't stop me being horrified at the price increases of new cars since 2018, when we last bought new. There are now very few new / nearly new cars that I consider "worth the money", especially compared to their predecessors. To me, something like a mid-range Focus or Golf is a >£20k car and it just staggers me that so many people that have no real interest in cars are willing to pay £35,000+ or £500+ per month for a generic lawnmower-engined hybrid just because it has a "sports" bodykit, huge wheels a big screen on the dash to impress their friends and colleagues.
You could buy a new M140i for under £30k in 2018 but to replace ours with a new car that's at least as good, I'd now be looking down the barrel of spending over £45,000 (M240i)! As that buys some pretty interesting & special kit second hand, I think I'd rather spend a minimal amount on a commuting box and put the majority into a proper sports car to enjoy the rest of the time.
I'd also love a new Defender 110 D300 but dealers are asking around £100k...and I thought £70k for an equivalent Discovery HSE was expensive!
You could buy a new M140i for under £30k in 2018 but to replace ours with a new car that's at least as good, I'd now be looking down the barrel of spending over £45,000 (M240i)! As that buys some pretty interesting & special kit second hand, I think I'd rather spend a minimal amount on a commuting box and put the majority into a proper sports car to enjoy the rest of the time.
I'd also love a new Defender 110 D300 but dealers are asking around £100k...and I thought £70k for an equivalent Discovery HSE was expensive!
Our combined income is about £12,000 per year (yep, that's twelve... I've not missed a nought). A good mate's monthly income is similar... I've owned lots of interesting stuff, but never owned new and probably wouldn't regardless of income. Good mate would love a new car, but recently bought a ten (?) year old hybrid Merc' estate - he swears blind that he couldn't afford the payments on a new one. I can't see where his money goes (but he does have three kids who appear to cost more to run than a Hellcat) and he can't see how we can afford food and power, let alone two cars, a van, and half a dozen bikes...
Another had serious monthly outgoings on a modern Jag' of some description - he traded it for an old 1990s Bentley, lost the monthly payment but gained huge petrol costs. He now drives an old Jimny, and pours his money into his hi-fi (currently about £60,000).
I've always thought that any bloke (or whatever) who has worked for a few decades should be able to afford a house, a car, and some luxuries - that should be the sign of a civilised society, or what's the point of working... (just my opinion).
We all have to balance our lives, time, finances and decide what's important. For some, a new car will outweigh being in debt, or forgoing a house purchase, or a holiday, etc. For me, time is far more important than money... as long as I'm happy, fed and warm. Doesn't answer your question, but...
Another had serious monthly outgoings on a modern Jag' of some description - he traded it for an old 1990s Bentley, lost the monthly payment but gained huge petrol costs. He now drives an old Jimny, and pours his money into his hi-fi (currently about £60,000).
I've always thought that any bloke (or whatever) who has worked for a few decades should be able to afford a house, a car, and some luxuries - that should be the sign of a civilised society, or what's the point of working... (just my opinion).
We all have to balance our lives, time, finances and decide what's important. For some, a new car will outweigh being in debt, or forgoing a house purchase, or a holiday, etc. For me, time is far more important than money... as long as I'm happy, fed and warm. Doesn't answer your question, but...
vikingaero said:
It was the cheapest way to own the Passat outright as a 10 year family car because of the £3k finance contribution that I wouldn't have got with cash.
You can take advantage of the finance contribution through the PCP deal, and then pay the finance off in the 14 day cooling-off period whilst retaining the finance contribution.Gassing Station | Car Buying | Top of Page | What's New | My Stuff