Percentage of salary to spend on a PCP
Discussion
Starting a new job soon and the job requires me to purchase a modern car (currently 9 y/o A3), so i have been wondering what percentage of my salary is acceptable to allocate to a PCP...
As for my outgoings, currently 200 p/m for rent with my partner's parent, 100p/m for other bills and 150p/m for food. other than that the rest is fuel and savings for rainy days (and deposit for mortgage).
Salary is 25k before tax (not including bonuses etc).
So what do people think would be an acceptable amount to allow for a PCP?
As for my outgoings, currently 200 p/m for rent with my partner's parent, 100p/m for other bills and 150p/m for food. other than that the rest is fuel and savings for rainy days (and deposit for mortgage).
Salary is 25k before tax (not including bonuses etc).
So what do people think would be an acceptable amount to allow for a PCP?
it needs to be less than 5 years old.. and after owning and maintaining my A3 for 4 years i'm very keep to own a new car passing the responsibility of faults and issues over to someone else..
as for the financial side, after the first year of the contract I gain the benefit of a vehicle allowance, roughly £200 p/m..
as for the financial side, after the first year of the contract I gain the benefit of a vehicle allowance, roughly £200 p/m..
Oliverr said:
We do plan to change this soon! But have discussed that there is no rush.. Allowing for say £300 on a lease, that would still leave more than 850 into savings each month..
We've agreed that <£400 is fine, but I wanted to see what other gass heads think..
You'll only save £850 per month if you don't spend another penny. We've agreed that <£400 is fine, but I wanted to see what other gass heads think..
£25k is about £1650 take home per month. You'll have other deductions, like pension contributions to consider too.
Personally I think £300 per month from £1650 is more than you should be paying. Spending almost 20% of your take home pay is too high in your circumstances.
The target should be getting out of her parents house firstly.
You can get some nice cars for under £300 per month, running them will eat quite heavily into your remaining cash though.
Edited by Driver101 on Sunday 23 March 19:12
Driver101 said:
You'll only save £850 per month if you don't spend another penny.
£25k is about £1650 take home per month. You'll have other deductions, like pension contributions to consider too.
Personally I think £300 per month from £1650 is more than you should be paying. Spending almost 20% of your take how pay is too high in your circumstances.
The target should be getting out of her parents house firstly.
You can get some nice cars for under £300 per month, running them will eat quite heavily into your remaining cash though.
Agreed that moving out is priority, and we do have a decent amount of deposit saved. £25k is about £1650 take home per month. You'll have other deductions, like pension contributions to consider too.
Personally I think £300 per month from £1650 is more than you should be paying. Spending almost 20% of your take how pay is too high in your circumstances.
The target should be getting out of her parents house firstly.
You can get some nice cars for under £300 per month, running them will eat quite heavily into your remaining cash though.
Any tips of finding the best deals out there to cut down the costs to below 300?
I would spend £200pm max myself
I would consider leasing a car though myself something like a Fiesta ST-2 can be had for less than £200pm inc VAT
http://www.gateway2lease.com/z_ford_fiesta_1.6ecob...
I would consider leasing a car though myself something like a Fiesta ST-2 can be had for less than £200pm inc VAT
http://www.gateway2lease.com/z_ford_fiesta_1.6ecob...
dry664 said:
Will they fire you if you don't? 300/month is a hell of a lot for most people on a 25k salary. Remember if you sign a 4 year lease and the job goes pear shaped you are stuck with the lease.
In reality no, but the role is very much driving and customer based (mostly driving), so having something older than 5 years (in reality out of warranty) becomes more of a liability.greggy50 said:
I would spend £200pm max myself
I would consider leasing a car though myself something like a Fiesta ST-2 can be had for less than £200pm inc VAT
http://www.gateway2lease.com/z_ford_fiesta_1.6ecob...
Whats the benefit of lease over PCP (this will be my first car not bought outright without finance)..I would consider leasing a car though myself something like a Fiesta ST-2 can be had for less than £200pm inc VAT
http://www.gateway2lease.com/z_ford_fiesta_1.6ecob...
Shame their m135i deals aren't around anymore, £250 with vat i heard.
Oliverr said:
Whats the benefit of lease over PCP (this will be my first car not bought outright without finance)..
Shame their m135i deals aren't around anymore, £250 with vat i heard.
Not 100% sure just with a lease you can only hand it back at the end whereas with a PCP believe you can pay a balloon and keep the car.Shame their m135i deals aren't around anymore, £250 with vat i heard.
It just depends what you want from a car if want to go new just find what the cheapest is per a month to be honest for what meets you needs.
For me if saving money I would take a bank loan and buy something 1 year old myself
greggy50 said:
Not 100% sure just with a lease you can only hand it back at the end whereas with a PCP believe you can pay a balloon and keep the car.
It just depends what you want from a car if want to go new just find what the cheapest is per a month to be honest for what meets you needs.
For me if saving money I would take a bank loan and buy something 1 year old myself
Having previously worked in the role i'm going into, I know this is the right one for me, and if i like it or not, it's going to involve a fair bit of milage.It just depends what you want from a car if want to go new just find what the cheapest is per a month to be honest for what meets you needs.
For me if saving money I would take a bank loan and buy something 1 year old myself
I like the idea of a lease/PCP if racking up miles on the car (25k p/a), as after the lease term I most likely will be looking to a new car...
Does it need to be younger than 5 years old at the anniversary of your employment year on year? If so if you buy a year old car now you'll be having to buy another ok next year and so on something to consider.
Maybe buy a 2-3 year old car to run for. 2-3 years then change
What vehicle does your Mrs have? If hers is old then it would be a smart move for her to take on your Audi come to an agreement on its value then she can pay you x PCM for it - and keep going in that cycle as in once your car breaches the rules she takes it on and she disposes of the now much older cars. This way you'll not get hammered on part x every few years and she will be getting a car with known history and by owning a car in the close family for. 5 years+ its a great way to get the best out of the depreciation. Also she will be getting rid of it just as the bigger costs come along (maybe trade her old car in for your new cars and work in they cycle?).
If however you don't receive a car allowance Id say requiring that level of cost on you is really harsh when no doubt your Audi is perfectly fine for the task at no cost to you.
As for what % for PCP remember to add in VED insurance servicing consumables and fuel costs together you will find it mounts quickly
Actually not being rude but for this task there is nothing wrong at all with buying a Dacia Sandero run it for 5 years - its only £7k new so you'd only have to pay £300 PCM for 2 years then you own it outright then you can bank the remaining 36*300 for your house deposit which would be a useful £11k
Maybe buy a 2-3 year old car to run for. 2-3 years then change
What vehicle does your Mrs have? If hers is old then it would be a smart move for her to take on your Audi come to an agreement on its value then she can pay you x PCM for it - and keep going in that cycle as in once your car breaches the rules she takes it on and she disposes of the now much older cars. This way you'll not get hammered on part x every few years and she will be getting a car with known history and by owning a car in the close family for. 5 years+ its a great way to get the best out of the depreciation. Also she will be getting rid of it just as the bigger costs come along (maybe trade her old car in for your new cars and work in they cycle?).
If however you don't receive a car allowance Id say requiring that level of cost on you is really harsh when no doubt your Audi is perfectly fine for the task at no cost to you.
As for what % for PCP remember to add in VED insurance servicing consumables and fuel costs together you will find it mounts quickly
Actually not being rude but for this task there is nothing wrong at all with buying a Dacia Sandero run it for 5 years - its only £7k new so you'd only have to pay £300 PCM for 2 years then you own it outright then you can bank the remaining 36*300 for your house deposit which would be a useful £11k
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