How do you decide your car budget?

[anonymous-user]

I know this is going to seem like a bit of a strange thread, but I'm having problems working out how much I should save/spend on a car and battling the old monster known as 'budget creep'.

For the first time in my life I'm earning half decent money (30k+). I'm 22 with no dependents, large out goings or anything like that. I haven't driven for over two years due to numerous reasons and its absolutely been killing me, so I'd like to make a splash and buy a car that I'm really, really going to enjoy.

The Problem is that I've only ever spent £1,400 on a car. My close family have only ever spent around £1,000 on a car, so that is where I started to look, but after a while I've come to the conclusion that most example of sub £1500 cars I'm interested in are now days utter dogs and that I need to spend some more money, but I don't quite know where to stop.

For example, I'm quite liking XJRs as a wafter that can still shift. I think £3,000 would get me a nice example of a X308, but then I ask myself, do I creep the budget up to £6000+ and get a later X350 XJR which in theory is all the 'sensible' car I'd need. Ever? But then a XJR would be a bit rubbish track days and playing around on B roads, a bit more than £6k would get me into an Evo and a bit more than an Evo would be me into a R33 GTR (childhood dream car) and so on.

Where do you draw the line and how do you decide to do it?!

Do I just keep saving until I'm utterly sick of not having a car, and then why wouldn't I buy a sub £1,000 shed to potter around with and keep on saving?

Help!

[okie592]

Finance to at least 50% of your income a month.


The only real answers to this are either lease m135i or a skoda Octavia vrs if your feeling practical, or spend £1000 on a mx5

Edited by okie592 on Thursday 23 January 09:02

[Krikkit]

If you've got plenty of disposable income at your age I'd probably buy something for £3-5k, then try and save as much as possible towards a deposit for a house. I know that's really boring, and not necessarily very PH, but getting out of the vicious rental cycle is a very wise investment indeed.

[james_gt3rs]

I look at the car that I want, then work out if I can afford it afterwards. So the budget depends on how much I want the car.

So I wouldn't go into debt/struggle financially just for a car. But if I could afford a car I want, I would probably buy it!

[freshmicropig]

On that sort of cash I would be inclined to just save up £4k - if you know the effort thats gone in to making the money you'll think very carefully before spending it, and be less likely to make a mistake as a result. You've always got the option to take out a £1-2k loan over a year or so if you fall for something - it won't be too much of a burden and it'd help your credit rating in the longer term.

[schmalex]

I tend to look at my finances and figure out what I can pay in cash without really feeling it and then look at the different options available for that cash + the px / cash sale value of my car. I'll then negotiate pretty hard to get the car that I want.

I can't see the point of hocking yourself up to the eyeballs just for a car.

[GreatGranny]

£6k for a car isn't really "hocking yourself up" when your take home is £2k+ per month.

OP, as someone has said £3-5k will get you a decent hothatch which will ok for everyday and also for the odd trackday.

Some suggestions...

Cooper S
Civic Tyre R
Clio 197
Fiesta ST
Swift Sport

[schmalex]

I wasn't suggesting that the OP's £6k was at all. Apologies for any misinterpretation. I was talking generically.

[Bill]

Presumably you don't have any no claims so bear in mind insurance costs. And the cars you're looking at have high consumable costs and big bork potential so you'd be wise to have a fighting fund.

Then look at your savings. Sure you could use finance but there are plenty of good desirable cars for the low thousands.

[Dave Hedgehog]

okie592 said:

Finance to at least 50% of your income a month.


The only real answers to this are either lease m135i or a skoda Octavia vrs if your feeling practical, or spend £1000 on a mx5

Edited by okie592 on Thursday 23 January 09:02

50% of gross take home seams reasonable

[jellypig]

I save and pay cash, always have. The only thing we have "on credit" is the mortgage on the house.

I know thats not very exciting, and does lead to compromise on car (or other thing) choice - but I'm just naturally cautious - but it does give me comfort that should my employment or health status suddenly change, everything is paid for, and I only need deal with day to day costs.


I know that now I'm older, married with multi-kids and self employed, that that approach is probably prudent but it was the same policy when I was younger/single as it allowed me (never actually did) to retain the right to tell "work" to do one, knowing my cost base was low.

[JDMDrifter]

Being young my budget is decided on if I can:

• Afford the insurance
• Afford the fuel
• Afford the running costs

So currently my Seat Ibiza costs £900 a year to insure, gets about 38 mpg and the running costs are fairly low.

Currently trying to justify an E39 520i as the insurance is only slightly more as is the fuel. But I don't really need it

[Axionknight]

JDMDrifter said:

Being young my budget is decided on if I can:

• Afford the insurance
• Afford the fuel
• Afford the running costs

So currently my Seat Ibiza costs £900 a year to insure, gets about 38 mpg and the running costs are fairly low.

Currently trying to justify an E39 520i as the insurance is only slightly more as is the fuel. But I don't really need it

Do eeeeeeeeeeeeeeeeeeeeeeeeeeeet.

[Vladimir]

1) Check what's on the market within reason.
2) Pretend to look at used examples
3) Justify buying new instead
4) Check bank account
5) Buy vehicle.

We've done that for a last few cars.

[johnny fotze]

My budget is whatever I've got in my pocket (not literally, it's usually under the mattress). This is about 1.5k.
I have an aversion to debt, and would rather save what would otherwise be repayments. If I can't save it, then I obviously wouldn't have been able to make the repayments. Means I may have to wait a little longer for what I want, but I save a fortune in interest.

[Shaoxter]

Get something which won't depreciate for the next couple of years, by which time you would have saved up for something you really want. Make sure you get some insurance quotes before deciding what to buy.

Leasing a new car is probably the worst idea in your situation IMO.

[kambites]

I don't really pick a hard budget; or rather I do but he range tends to be huge. I just drive everything that interests me that I can even hope to afford, then decide which one seems to offer the best compromise of what I want and how long it'll take to save up for it. When I bought the Elise, three of the last cars on the short-list were around £3k; £16k and £30k.

Edited by kambites on Thursday 23 January 10:28

[Benbay001]

I tend to work out what i can afford and then spend much more.

[chrisw666]

Budget creep is the devil.

Decide what you want, set an upper limit that you can comfortably afford, budget for running costs (remember something like an XJR could chuck a 4 figure bill out of thin air), go shopping and start by looking at cars comfortably within your limits.

[HemiCommander]

I fire up excel, create an enormously complex spreadsheet with the costs of all the options under consideration, then tweak it about until it comprehensively proves that an enormous V8 powered monstrosity is the only sensible solution. I then buy said monstrosity and feel both pleased and poor.

After many repetitions of this process I am looking for something relatively sensible and hence have a similar dilemma to yourself, do I buy something cheap and old and pay for its upkeep or nearly new and shiny and pay for its depreciation?