How the hell do people afford cars these days?
Discussion
Never bought a new car. I've said for 20 years that i dont understand (even with PCP etc) how anyone can afford a 'new' car lol
But these people exist (thankyou!) and enable me to buy 5-8 year old cars at massive savings over new.
I save up for each one. I also make sure i have a 'pot' of cash for repairs etc. I've never bought anything i can't afford to own (i.e. I never try to keep up with the neighbours)
But these people exist (thankyou!) and enable me to buy 5-8 year old cars at massive savings over new.
I save up for each one. I also make sure i have a 'pot' of cash for repairs etc. I've never bought anything i can't afford to own (i.e. I never try to keep up with the neighbours)
It's the YOLO lifestyle I am afraid.
This word seems to absent some people from any attempt to future plan their financial lives. Saving for a deposit? 'nah I can't afford it'. Saving for a pension, 'Boring! I will deal with that nearer the time'.
Some of these younger folk are going to be near destitute on retirement. Renting and with just a basic pension. Don't think they will be driving an expensive car then, don't think they can afford any car!
What an existence and one that lasts for many years on average. Twenty or thereabouts.
I am 72 took my own pension (fully inflation proofed) 12 years ago, got the state pension 7 years ago and still work about 85 days a year, still paying higher rate tax! Very comfortably off, paid off mortgage and no loans for anything. Even so, I still won't buy a new car for myself, I was just not brought up to spend loads on a strongly depreciating asset. I buy them later when the bulk of the depreciation has been done. e.g. the last car I bought in 2017 was 6 years old and was over 30k new but I bought it for £4900. Runs great, takes me abroad for many thousands of miles a year.
I fear for the financially stretched. Those that pay hundreds a month for a shiny new car on the proviso they can just afford it and have little actual savings. It is said that half of UK adults have less than £100 in savings.
Inflation is starting to spiral, the energy crisis will make this worse, a lot worse!
I have just received my six monthly gas bill. It tells me I reduced my usage from 15250 Kwh to 12500 over the same period. (We have been trying to use less.) It also tells me that, despite this, my expected expenditure on gas and electricity will go from £2310 to £3610 over the next year, an increase of £1300 or about £110 per month. In October the Cap will be revised again and there is no doubt a similar, if not an even bigger rise, (because of the absolutely international crazy gas prices up to 20 times more expensive than last years) will be imposed then. That will be a total increase of £220 a month just for energy for the house. When you think the increased petrol cost will impact nearly every bit of goods we buy, you can see the troubles ahead.
It seems some families, currently near the edge, will be pushed over this by increases of this size. These sort of letters will be dropping through peoples letter boxes soon and I expect the outcry to be huge.
This word seems to absent some people from any attempt to future plan their financial lives. Saving for a deposit? 'nah I can't afford it'. Saving for a pension, 'Boring! I will deal with that nearer the time'.
Some of these younger folk are going to be near destitute on retirement. Renting and with just a basic pension. Don't think they will be driving an expensive car then, don't think they can afford any car!
What an existence and one that lasts for many years on average. Twenty or thereabouts.
I am 72 took my own pension (fully inflation proofed) 12 years ago, got the state pension 7 years ago and still work about 85 days a year, still paying higher rate tax! Very comfortably off, paid off mortgage and no loans for anything. Even so, I still won't buy a new car for myself, I was just not brought up to spend loads on a strongly depreciating asset. I buy them later when the bulk of the depreciation has been done. e.g. the last car I bought in 2017 was 6 years old and was over 30k new but I bought it for £4900. Runs great, takes me abroad for many thousands of miles a year.
I fear for the financially stretched. Those that pay hundreds a month for a shiny new car on the proviso they can just afford it and have little actual savings. It is said that half of UK adults have less than £100 in savings.
Inflation is starting to spiral, the energy crisis will make this worse, a lot worse!
I have just received my six monthly gas bill. It tells me I reduced my usage from 15250 Kwh to 12500 over the same period. (We have been trying to use less.) It also tells me that, despite this, my expected expenditure on gas and electricity will go from £2310 to £3610 over the next year, an increase of £1300 or about £110 per month. In October the Cap will be revised again and there is no doubt a similar, if not an even bigger rise, (because of the absolutely international crazy gas prices up to 20 times more expensive than last years) will be imposed then. That will be a total increase of £220 a month just for energy for the house. When you think the increased petrol cost will impact nearly every bit of goods we buy, you can see the troubles ahead.
It seems some families, currently near the edge, will be pushed over this by increases of this size. These sort of letters will be dropping through peoples letter boxes soon and I expect the outcry to be huge.
andyvvc said:
Never bought a new car. I've said for 20 years that i dont understand (even with PCP etc) how anyone can afford a 'new' car lol
But these people exist (thankyou!) and enable me to buy 5-8 year old cars at massive savings over new.
I save up for each one. I also make sure i have a 'pot' of cash for repairs etc. I've never bought anything i can't afford to own (i.e. I never try to keep up with the neighbours)
This pretty much sums up me as well. My only new vehicle was a Kawasaki AR80 in 1982, never spent more than £5K on a car. We have a 2005 Skoda Octavia 1.9 diesel as the everyday car, with 190K on the clock and the Alfa GT for enjoyment. Joint insurance and breakdown cover for the year comes to £560. We paid the mortgage off five years ago and the best joint income we had was £60K one year. Neither of us is very materialistic and we don't have any credit card debt or phone contracts. That said, we have been on some cracking European road trips.But these people exist (thankyou!) and enable me to buy 5-8 year old cars at massive savings over new.
I save up for each one. I also make sure i have a 'pot' of cash for repairs etc. I've never bought anything i can't afford to own (i.e. I never try to keep up with the neighbours)
Tigger2050 said:
It's the YOLO lifestyle I am afraid.
This word seems to absent some people from any attempt to future plan their financial lives. Saving for a deposit? 'nah I can't afford it'. Saving for a pension, 'Boring! I will deal with that nearer the time'.
Some of these younger folk are going to be near destitute on retirement. Renting and with just a basic pension. Don't think they will be driving an expensive car then, don't think they can afford any car!
What an existence and one that lasts for many years on average. Twenty or thereabouts.
I am 72 took my own pension (fully inflation proofed) 12 years ago, got the state pension 7 years ago and still work about 85 days a year, still paying higher rate tax! Very comfortably off, paid off mortgage and no loans for anything. Even so, I still won't buy a new car for myself, I was just not brought up to spend loads on a strongly depreciating asset. I buy them later when the bulk of the depreciation has been done. e.g. the last car I bought in 2017 was 6 years old and was over 30k new but I bought it for £4900. Runs great, takes me abroad for many thousands of miles a year.
I fear for the financially stretched. Those that pay hundreds a month for a shiny new car on the proviso they can just afford it and have little actual savings. It is said that half of UK adults have less than £100 in savings.
Inflation is starting to spiral, the energy crisis will make this worse, a lot worse!
I have just received my six monthly gas bill. It tells me I reduced my usage from 15250 Kwh to 12500 over the same period. (We have been trying to use less.) It also tells me that, despite this, my expected expenditure on gas and electricity will go from £2310 to £3610 over the nest year, an increase of £1300 or about £110 per month. In October the Cap will be revised again and there is no doubt a similar, if not an even bigger rise, (because of the absolutely international crazy gas prices up to 20 times more expensive than last years) will be imposed then. That will be a total increase of £220 a month just for energy for the house. When you think the increased petrol cost will impact nearly every bit of goods we buy, you can see the troubles ahead.
It seems some families, currently near the edge, will be pushed over this by increases of this size. These sort of letters will be dropping through peoples letter boxes soon and I expect the outcry to be huge.
Although someone made the interesting observation that the average age of UK cars has increased to 8 years from 6 years a few years ago. This word seems to absent some people from any attempt to future plan their financial lives. Saving for a deposit? 'nah I can't afford it'. Saving for a pension, 'Boring! I will deal with that nearer the time'.
Some of these younger folk are going to be near destitute on retirement. Renting and with just a basic pension. Don't think they will be driving an expensive car then, don't think they can afford any car!
What an existence and one that lasts for many years on average. Twenty or thereabouts.
I am 72 took my own pension (fully inflation proofed) 12 years ago, got the state pension 7 years ago and still work about 85 days a year, still paying higher rate tax! Very comfortably off, paid off mortgage and no loans for anything. Even so, I still won't buy a new car for myself, I was just not brought up to spend loads on a strongly depreciating asset. I buy them later when the bulk of the depreciation has been done. e.g. the last car I bought in 2017 was 6 years old and was over 30k new but I bought it for £4900. Runs great, takes me abroad for many thousands of miles a year.
I fear for the financially stretched. Those that pay hundreds a month for a shiny new car on the proviso they can just afford it and have little actual savings. It is said that half of UK adults have less than £100 in savings.
Inflation is starting to spiral, the energy crisis will make this worse, a lot worse!
I have just received my six monthly gas bill. It tells me I reduced my usage from 15250 Kwh to 12500 over the same period. (We have been trying to use less.) It also tells me that, despite this, my expected expenditure on gas and electricity will go from £2310 to £3610 over the nest year, an increase of £1300 or about £110 per month. In October the Cap will be revised again and there is no doubt a similar, if not an even bigger rise, (because of the absolutely international crazy gas prices up to 20 times more expensive than last years) will be imposed then. That will be a total increase of £220 a month just for energy for the house. When you think the increased petrol cost will impact nearly every bit of goods we buy, you can see the troubles ahead.
It seems some families, currently near the edge, will be pushed over this by increases of this size. These sort of letters will be dropping through peoples letter boxes soon and I expect the outcry to be huge.
Certainly UK car production is at a very low level historically, under a million cars a year for the first time in decades.
"Some" people have always spent on new cars, as they do now.
Plenty, including the young, don't.
With the greatest respect, your life experience at 72, particularly in relation to house prices, bears no relation to current economics for 25 year olds.
My daughter bought a house in London before her mid twenties. Had it for about 10 years now and has made a packet in appreciation.
Mind you she was still driving a 2004 Nissan Micra I bought for her when she passed her test. She kept that until six months ago and bought a two and a half year old golf (not a fancy one) to replace.
Mind you she was still driving a 2004 Nissan Micra I bought for her when she passed her test. She kept that until six months ago and bought a two and a half year old golf (not a fancy one) to replace.
PH User said:
TREMAiNE said:
but what is stupid is people paying the "monthlies" for a car they categorically cannot afford - which is a large percentage of younger PCPers or leasers.
How do you know that they can't afford the monthly payments? Are they having to hand them back?For example, there is a big difference between a 23-year-old on an average salary for that age PCP'ing a new basic hatchback for £300 per month vs. an out-of-warranty high-performance car for £500 per month. Obviously, an older/more expensive/higher-end car is going to be more costly to run with higher insurance costs, fuel costs, tax costs, servicing costs, consumables costs, the possible cost of extra parts.
The accessibility that monthly payments provide is naturally going to increase the number of people buying higher-end cars because that initial monthly cost is affordable.
A chap at work in his 50s has an Audi Q7, he's had it since he started here and has had it for a few years but it was off the road needing repairs. It's 10 years old, needs £5k of repairs which he cannot afford. Because it's been so long, he still can't afford it, he's stopped paying the finance, his reason (and ridiculous mentality) is that why should he pay the finance on the car when he can't even use the car. Utterly insane. What these people seem to be oblivious to, is that a 10-year-old £10k Q7 will still have the running costs of a £70k car - which means you have someone with a £2-3000 budget, spending £10k on a car, that has the running costs of a £70k car - he CANNOT afford the car, even though he can afford the monthly payments, but he could have afforded buying a £10k used hatchback, just out of warranty with a rubbish badge - the problem with that is he then couldn't go around saying how he owns an Audi.
This is what people are talking about when they're saying people who use PCP can't afford the car.
6 months ago, I was genuinely looking at Ferrari 355s. My ultimate dream car. At a real push, with a personal loan, plus selling most of my current cars, I could just about afford it - and that included putting away £500 per month to go towards maintenance. But it would have been all of my disposable income. I could afford to do it - but really, I couldn't afford to do it. What would happen if I need a new boiler? Or what would happen if/when something on the car broke that the 'service slush pot' wouldn't cover?
It's my ultimate dream car and it's doubtful prices will ever get any lower... But I wasn't stupid enough to do it. In the end, I spent 10% of the cost on something much less exciting (although arguably more interesting). A lot of people could probably afford to squeeze themselves into a 355 or 360 etc - but while they could technically afford it, like me, in reality they probably can't.
Edited by TREMAiNE on Tuesday 8th March 17:02
Tigger2050 said:
My daughter bought a house in London before her mid twenties. Had it for about 10 years now and has made a packet in appreciation.
Mind you she was still driving a 2004 Nissan Micra I bought for her when she passed her test. She kept that until six months ago and bought a two and a half year old golf (not a fancy one) to replace.
Well the last house price big crash was 2009, so maybe that and having a car brought for her helped. Just saying, a lot of circumstances are timing, it's not all to do with YOLO.Mind you she was still driving a 2004 Nissan Micra I bought for her when she passed her test. She kept that until six months ago and bought a two and a half year old golf (not a fancy one) to replace.
Alex_225 said:
Brand new cars are horrendously expensive. I mean I look at many of them and can't believe the RRPs
I recently bought a brand new Mini for £16,400 which I thought was good value for a fun-to-drive car that comes with a/c and a nice leather wheel, metallic paint and LED headlights.It seems likely that it will give 10 years low-cost motoring so fairly affordable as a long term strategy
jonah35 said:
Genuinely?
People earn more than you think.
The plumber
The guy that taps away from home on a computer
The roofer
People just earn more than you think in general
Some truth in that.People earn more than you think.
The plumber
The guy that taps away from home on a computer
The roofer
People just earn more than you think in general
There is also a lot of inherited wealth in the UK.
And a lot of criminals.
Also a lot of people with car-sized chunks of personal debt but no (owned) car to show for it!
jonah35 said:
Genuinely?
People earn more than you think.
The plumber
The guy that taps away from home on a computer
The roofer
People just earn more than you think in general
People do more cash in hand jobs than you thinkPeople earn more than you think.
The plumber
The guy that taps away from home on a computer
The roofer
People just earn more than you think in general
People run their own businesses and put their cars through the business more than you think
People’s other outgoings can vary massively. Some may have £400 mortgage some may be £2000, some 4 kids some zero, some multiple holidays/ travelling some never go away etc etc.
Me and my friend have very similar joint earnings with the other half’s, his mortgage is over double mine, has two kids and so do kids stuff most weekends but they both drive £500 bangers.
Me and my mrs have no kids and driver nicer cars and spend weekends going away/ doing track days and she has a horse instead.
Me and my friend have very similar joint earnings with the other half’s, his mortgage is over double mine, has two kids and so do kids stuff most weekends but they both drive £500 bangers.
Me and my mrs have no kids and driver nicer cars and spend weekends going away/ doing track days and she has a horse instead.
TREMAiNE said:
PH User said:
TREMAiNE said:
but what is stupid is people paying the "monthlies" for a car they categorically cannot afford - which is a large percentage of younger PCPers or leasers.
How do you know that they can't afford the monthly payments? Are they having to hand them back?Edited by TREMAiNE on Tuesday 8th March 17:02
Something is unlikely to go wrong on a brand new car, so that makes planning finances even easier, certainly easier than if they bought an older car.
Anyway, I think it's best not to jump to conclusions about others finances.
I think a lot of it is:
- Youngsters living at home who would have in a previous generation moved out.
- People getting decent car allowances
- Self-employed running them as a company car.
- Keeping Up With The Jones-ers who must have the shiniest/newest thing, all on credit
I'm in that bracket of 'middle-aged, middle-income with kids' where you tend to bother less about cars and more about things like holidays and pensions.
I'm actually happier to run a 17yo car - albeit a nice one, a 2005 E46 M3 - because it is long since bought and paid for, and costs little other than fuel because I do relatively few miles. It's also the level of tech where I can maintain a lot on it myself, anything complicated is not too eye-watering at my local indy.
- Youngsters living at home who would have in a previous generation moved out.
- People getting decent car allowances
- Self-employed running them as a company car.
- Keeping Up With The Jones-ers who must have the shiniest/newest thing, all on credit
I'm in that bracket of 'middle-aged, middle-income with kids' where you tend to bother less about cars and more about things like holidays and pensions.
I'm actually happier to run a 17yo car - albeit a nice one, a 2005 E46 M3 - because it is long since bought and paid for, and costs little other than fuel because I do relatively few miles. It's also the level of tech where I can maintain a lot on it myself, anything complicated is not too eye-watering at my local indy.
PurpleTurtle said:
I think a lot of it is:
- Youngsters living at home who would have in a previous generation moved out.
- People getting decent car allowances
- Self-employed running them as a company car.
- Keeping Up With The Jones-ers who must have the shiniest/newest thing, all on credit
I'm in that bracket of 'middle-aged, middle-income with kids' where you tend to bother less about cars and more about things like holidays and pensions.
I'm actually happier to run a 17yo car - albeit a nice one, a 2005 E46 M3 - because it is long since bought and paid for, and costs little other than fuel because I do relatively few miles. It's also the level of tech where I can maintain a lot on it myself, anything complicated is not too eye-watering at my local indy.
You don't need to justify a purchase to others, nobody does. - Youngsters living at home who would have in a previous generation moved out.
- People getting decent car allowances
- Self-employed running them as a company car.
- Keeping Up With The Jones-ers who must have the shiniest/newest thing, all on credit
I'm in that bracket of 'middle-aged, middle-income with kids' where you tend to bother less about cars and more about things like holidays and pensions.
I'm actually happier to run a 17yo car - albeit a nice one, a 2005 E46 M3 - because it is long since bought and paid for, and costs little other than fuel because I do relatively few miles. It's also the level of tech where I can maintain a lot on it myself, anything complicated is not too eye-watering at my local indy.
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