How the hell do people afford cars these days?
Discussion
LeeM135i said:
Personally we are very lucky and have relatively well paid jobs. We don't have kids, smoke, drink (much), have expensive mobile phones or Sky TV packages so cars are our (my) hobby.
We both get car allowances from work and I am lucky enough that I usually ride my bike into the office and have access to a van for work if needed. My wife goes in two days a week, goes on appointments 2 days a week and works from home 1 day a week.
I currently have a 2018 C63S AMG which I picked up around 18 months ago for £50k. P/Xed a 2013 M135i which I got £15k for, I had £15k from money I had been putting aside for 5 years and took out a 5year personal bank loan for £20k. Loan is £360ish a month, insurance is £50, Tax is £45 but will be £15ish next year, Mercedes service plan is £45. Usually pay the insurance and tax annually to save the extra cost of paying monthly, the service plan is interest free. The deposit and P/X came from the same 5 year loan on the M135i I purchased in 2015 and saving the rest of my car allowance.
£500 is a lot of money a month but when you think some people spend £100 on a phone, £75 on Sky and £100+ on coffee a month it's doable in a man maths kind of way.
My wife has PCP or finance with a balloon on a GLA 200d which costs significantly more than the 63 I think the PCP is £450/£500 a month insurance is £40, tax is £45 and the service plan is £30. If we needed to get rid of the GLA in a hurry we would get nothing back for it, we might have to pay to give it back. It's the third car we have purchased like this and have nothing to show for it.
I get a lot of comments on how we are doing very well to have the 63 or 'how much does that cost' but the answer is not as much as your kids if they are being an arse or not as much as you think if you buy well. Choose what you spend your disposable income on and buy to own not rent your cars. My wife wants a shiny new car every 3 years and will continue to pay through the nose for it.
Hopefully in 3.5 years time when the 63 is paid off it will still be worth a large chunk of the £50k I paid for it and I can go again, maybe the 911 will be in reach next time or I might keep the 63, last of the V8's............
It might sound like a brag but honestly its not. I wouldn't dream of taking out PCP on a new C63 £1500 a month to rent a car, no chance couldn't afford it anyway.
The cost of new cars is out of control, I understand why with interest rates, poor F/X, cost of power and shipping but it's madness.
thanks for sharing Lee. I think your monthly expenditure is not too dissimilar to a majority of working couples say between the ages of 30 and 60. I know my brother in law and wife have very similar monthly outgoings.We both get car allowances from work and I am lucky enough that I usually ride my bike into the office and have access to a van for work if needed. My wife goes in two days a week, goes on appointments 2 days a week and works from home 1 day a week.
I currently have a 2018 C63S AMG which I picked up around 18 months ago for £50k. P/Xed a 2013 M135i which I got £15k for, I had £15k from money I had been putting aside for 5 years and took out a 5year personal bank loan for £20k. Loan is £360ish a month, insurance is £50, Tax is £45 but will be £15ish next year, Mercedes service plan is £45. Usually pay the insurance and tax annually to save the extra cost of paying monthly, the service plan is interest free. The deposit and P/X came from the same 5 year loan on the M135i I purchased in 2015 and saving the rest of my car allowance.
£500 is a lot of money a month but when you think some people spend £100 on a phone, £75 on Sky and £100+ on coffee a month it's doable in a man maths kind of way.
My wife has PCP or finance with a balloon on a GLA 200d which costs significantly more than the 63 I think the PCP is £450/£500 a month insurance is £40, tax is £45 and the service plan is £30. If we needed to get rid of the GLA in a hurry we would get nothing back for it, we might have to pay to give it back. It's the third car we have purchased like this and have nothing to show for it.
I get a lot of comments on how we are doing very well to have the 63 or 'how much does that cost' but the answer is not as much as your kids if they are being an arse or not as much as you think if you buy well. Choose what you spend your disposable income on and buy to own not rent your cars. My wife wants a shiny new car every 3 years and will continue to pay through the nose for it.
Hopefully in 3.5 years time when the 63 is paid off it will still be worth a large chunk of the £50k I paid for it and I can go again, maybe the 911 will be in reach next time or I might keep the 63, last of the V8's............
It might sound like a brag but honestly its not. I wouldn't dream of taking out PCP on a new C63 £1500 a month to rent a car, no chance couldn't afford it anyway.
The cost of new cars is out of control, I understand why with interest rates, poor F/X, cost of power and shipping but it's madness.
RDMcG said:
Royal Jelly said:
Interesting. I can’t find the columns referring to income, outgoings or children.
I must be mistaken in thinking they make a difference, regarding car affordability.
tha chart ignores the critical items.I must be mistaken in thinking they make a difference, regarding car affordability.
Cashflow and pensions.
If your assets include a house, country cottage etc and you have kids in expensive schools etc, then the affordability is different as the above are all cash consumers. Secondly if you have a nice employer pension plan that also affects your future plans.
OTOH you are completely debt and kid free then you have a lower outflow for your non-productive assets.
I would fail on this chart as I enjoy performance cars and I like buying them new. I am very well aware of the financial cost of buying new and I buy for cash but I get to spec the cars precisely as I want.. In the event of a serious downturn like we are having now I might not buy any more cars in the short term, and if there is a complete rout I would downsize without a second thought.
On the other hand, if I had 3 kids in private school and a 7-figure mortgage, the table may have a point.
Royal Jelly said:
I know - my sarcasm was too subtle. The table is nonsense. I’m 38, own my house, have savings to buy a couple more, have zero debt, no children and a very good net income. The table suggests I can’t afford a 911C2S.
On the other hand, if I had 3 kids in private school and a 7-figure mortgage, the table may have a point.
In isolation that table is indeed absurd, and clearly tongue in cheek although I am not convinced whoever posted it realised that. I wonder how they came across it too ??On the other hand, if I had 3 kids in private school and a 7-figure mortgage, the table may have a point.
The article from which the table comes appears to be aimed at people who live off their assets - people with a lot of assets and not much income.
https://www.financialsamurai.com/net-worth-rule-fo...
The article looks like a big pile of hairy ones to me anyway, it's far too simplistic, but in any case it doesn't seem to say what it's represented as saying.
If you have accumulated enough wealth to be able to live off it, you're probably not too thick to work out how much of it you want to spend on your luxuries. Well, unless you're an heir, a lottery winner, or a footballer, I suppose. I would have included "crypto-bro" in that list, but that appears to have resolved itself.
https://www.financialsamurai.com/net-worth-rule-fo...
The article looks like a big pile of hairy ones to me anyway, it's far too simplistic, but in any case it doesn't seem to say what it's represented as saying.
If you have accumulated enough wealth to be able to live off it, you're probably not too thick to work out how much of it you want to spend on your luxuries. Well, unless you're an heir, a lottery winner, or a footballer, I suppose. I would have included "crypto-bro" in that list, but that appears to have resolved itself.
Royal Jelly said:
I know - my sarcasm was too subtle. The table is nonsense. I’m 38, own my house, have savings to buy a couple more, have zero debt, no children and a very good net income. The table suggests I can’t afford a 911C2S.
On the other hand, if I had 3 kids in private school and a 7-figure mortgage, the table may have a point.
You may find this thread interesting: On the other hand, if I had 3 kids in private school and a 7-figure mortgage, the table may have a point.
https://www.pistonheads.com/gassing/topic.asp?h=0&...
Jaguar steve said:
otolith said:
The article looks like a big pile of hairy ones to me anyway
Indeed.Only a real simpleton would believe in any rules suggesting if you have X amount of assets or X level of income you ought to be driving a X value car.
Supposing you don't want too?
PrinceRupert said:
Merely pointing out the idiocy of that table, which tells me that I can’t afford things that I certainly can. I think age versus income is a factor. When you I was young I took a car loan for instance as many do. I see nothing wrong to getting your dream car if you can afford the repayments and never understand why people criticize this . You have a long runway of future earnings.
Later on you may have accumulated other obligations-kids,mortgages etc.
In a way I wish I went in deeper when I was much younger. Fun to have a brilliant car in your twenties rather than it being in your fifties.
Later on you may have accumulated other obligations-kids,mortgages etc.
In a way I wish I went in deeper when I was much younger. Fun to have a brilliant car in your twenties rather than it being in your fifties.
RDMcG said:
I think age versus income is a factor. When you I was young I took a car loan for instance as many do. I see nothing wrong to getting your dream car if you can afford the repayments and never understand why people criticize this . You have a long runway of future earnings.
Later on you may have accumulated other obligations-kids,mortgages etc.
In a way I wish I went in deeper when I was much younger. Fun to have a brilliant car in your twenties rather than it being in your fifties.
It's just a personal opinion, but I think it's the other way around. When I was young I didn't know how much money I had, because I didn't know how much I would be earning or how much the house I wanted to live in forever would cost. Now, I didn't know that at the time and bought plenty of cars....but actually I am in a much better position to spend on cars now; despite having a mortgage, two young children etc than I was when young because I have my forever home and know how much I owe and have a much better understanding of my, and my wifes, earning potential. Buying a brand new 911 when I was 25 would have meant I would never have been able to buy the home we are all living in happily, buying one now would be selfish but the repurcussions would be much less severe. In fact I am looking at spending more than I ever have before on a car at the end of the Summer and it'll be the least 'guilty' i'll have ever felt.Later on you may have accumulated other obligations-kids,mortgages etc.
In a way I wish I went in deeper when I was much younger. Fun to have a brilliant car in your twenties rather than it being in your fifties.
Gassing Station | Car Buying | Top of Page | What's New | My Stuff