How do you save over the short term (3-5 years) for a car?
Discussion
Hey all,
Just wondering how people choose to save for their next car over the short term - be it buying outright over 3-5 years or cash together for the next deposit on whatever deal they're looking at?
In my case I think I've settled on keeping my car, which is only 3 years old, for another 3 and hopefully socking away £500 a month over that period towards the next one = £18,000 + hopefully my Fiesta ST will be worth at least £4,000 by then, probably a little more, but let's say £22,000. That will put me in a 17 plate Focus RS or M140i in 3 years, I would think.
Question is what to do with that cash in the meantime - what do other people do? Stock market is advised against by more people over such a short term, especially with it being so high right now so what do people do - 'gamble' on stocks, just leave it there building up and say at least you've not lost in that short term, stick in a retail bank for what interest you can get? Interested in any thoughts. For what it's worth, I'm thinking either stick it in stocks and have a bit of a gamble (tracker funds) or just leave it there knowing it'll still be £18,000 or so in 3 years.
Cheers!
Just wondering how people choose to save for their next car over the short term - be it buying outright over 3-5 years or cash together for the next deposit on whatever deal they're looking at?
In my case I think I've settled on keeping my car, which is only 3 years old, for another 3 and hopefully socking away £500 a month over that period towards the next one = £18,000 + hopefully my Fiesta ST will be worth at least £4,000 by then, probably a little more, but let's say £22,000. That will put me in a 17 plate Focus RS or M140i in 3 years, I would think.
Question is what to do with that cash in the meantime - what do other people do? Stock market is advised against by more people over such a short term, especially with it being so high right now so what do people do - 'gamble' on stocks, just leave it there building up and say at least you've not lost in that short term, stick in a retail bank for what interest you can get? Interested in any thoughts. For what it's worth, I'm thinking either stick it in stocks and have a bit of a gamble (tracker funds) or just leave it there knowing it'll still be £18,000 or so in 3 years.
Cheers!
Isn't your cost to change pretty similar now?
A brand new M140i can be had for around £26k from a broker (obviously +options) and there are plenty of them second hand now from £24k.
3 year old Fiesta ST should be worth around £9k.
Cost to change = £17k.
£17k loan @ 2.8% over 3 years = £17.8k ish.
A brand new M140i can be had for around £26k from a broker (obviously +options) and there are plenty of them second hand now from £24k.
3 year old Fiesta ST should be worth around £9k.
Cost to change = £17k.
£17k loan @ 2.8% over 3 years = £17.8k ish.
markirl said:
Isn't your cost to change pretty similar now?
A brand new M140i can be had for around £26k from a broker (obviously +options) and there are plenty of them second hand now from £24k.
3 year old Fiesta ST should be worth around £9k.
Cost to change = £17k.
£17k loan @ 2.8% over 3 years = £17.8k ish.
Thanks for the advice, I still think I'd rather save up rather than having a payment hanging over me as psychologically that does my head in, probably more than it seems to most people. Plus I can save faster that my car (should) depreciate, even though I take the point that there is an element of counter-intuitiveness in saving while the current asset is losing money. But you've opened my eyes to how cheap loans are these days, didn't realise M&S bank were doing as low as 2.8%!A brand new M140i can be had for around £26k from a broker (obviously +options) and there are plenty of them second hand now from £24k.
3 year old Fiesta ST should be worth around £9k.
Cost to change = £17k.
£17k loan @ 2.8% over 3 years = £17.8k ish.
Cheers
If you can borrow at 2.8%, I would do that, even if you had the money sitting today, as that money could be better invested elsewhere or could be kept as an emergency fund, even if you only get a percentage point or so in interest the cost of capital is sufficiently low to make it worthwhile, imho.
The loan on my car is 6.9%, not great, but for ten grand it is only costing me £20.83 a month in interest, which really isn't too bad.
The loan on my car is 6.9%, not great, but for ten grand it is only costing me £20.83 a month in interest, which really isn't too bad.
Herbs said:
This - the interest pales into insignificance compared to the depreciation you'll suffer over the next 3 years on your current car.
But the new car would be depreciating as well, and at a higher rate? Plus the interest? My ST will fall from £8,500 to what, maybe £4,500 - £5,000 over the next 3 years as a trade in so let's say £4,000. An M140i will surely depreciate by far more than that over the period? HumanDoing said:
Herbs said:
This - the interest pales into insignificance compared to the depreciation you'll suffer over the next 3 years on your current car.
But the new car would be depreciating as well, and at a higher rate? Plus the interest? My ST will fall from £8,500 to what, maybe £4,500 - £5,000 over the next 3 years as a trade in so let's say £4,000. An M140i will surely depreciate by far more than that over the period? 
Herbs said:
This - the interest pales into insignificance compared to the depreciation you'll suffer over the next 3 years on your current car.
If OP intends to buy new, then your comment amuses me Herbs.
Think OP said current car is 3 years old now.
Our Vantages are perhaps an extreme but perfect example, of why not to buy a new car, but a well looked after 3 year old.
Depreciation year 1 to 3 = £50,000.
Depreciation year 3 to 6 = £ 5,000 to £10,000.
Even if £50,000 is of no consequence, it must be more satisfying to lose as little as possible with motor cars.
Jon39 said:
Herbs said:
This - the interest pales into insignificance compared to the depreciation you'll suffer over the next 3 years on your current car.
If OP intends to buy new, then your comment amuses me Herbs.
Think OP said current car is 3 years old now.
Our Vantages are perhaps an extreme but perfect example, of why not to buy a new car, but a well looked after 3 year old.
Depreciation year 1 to 3 = £50,000.
Depreciation year 3 to 6 = £ 5,000 to £10,000.
Even if £50,000 is of no consequence, it must be more satisfying to lose as little as possible with motor cars.
As much as I love cars, i'm not prepared to throw tens of thousands of pounds at it per year.
If you read his post he says, in 3 years he would have £22k - which, in the best will in the world would not get you in a brand new M140i
Edited by Herbs on Friday 18th August 15:26
Herbs said:
I'm the biggest advocate of not buying new hence why I drive a Vantage and not a new M3 for the same money
As much as I love cars, i'm not prepared to throw tens of thousands of pounds at it per year.
As much as I love cars, i'm not prepared to throw tens of thousands of pounds at it per year.
We share the same philosophy, Herbs.
I am always conscious of being very grateful, to new car buyers though. Obviously our buying system could not work without them.
The first owner of my car is a truly wonderful man. He ordered the exact specification that I wanted, every detail, even paid thousands extra for a non standard colour. Drove carefully just 1,000 miles, then had to sell after only 12 months, due to job relocation. The second owner, another careful man, made a big mistake.
He went back to the main dealer and drank one of those famous free coffees. Perhaps they put something in, which makes people spend money.
Jon39 said:
If OP intends to buy new, then your comment amuses me Herbs.
Think OP said current car is 3 years old now.
Our Vantages are perhaps an extreme but perfect example, of why not to buy a new car, but a well looked after 3 year old.
Depreciation year 1 to 3 = £50,000.
Depreciation year 3 to 6 = £ 5,000 to £10,000.
Even if £50,000 is of no consequence, it must be more satisfying to lose as little as possible with motor cars.
jonny70 said:
Jon39 said:
If OP intends to buy new, then your comment amuses me Herbs.
Think OP said current car is 3 years old now.
Our Vantages are perhaps an extreme but perfect example, of why not to buy a new car, but a well looked after 3 year old.
Depreciation year 1 to 3 = £50,000.
Depreciation year 3 to 6 = £ 5,000 to £10,000.
Even if £50,000 is of no consequence, it must be more satisfying to lose as little as possible with motor cars.
http://www.autotrader.co.uk/classified/advert/2016...
They is one for £49,950 with 67k on the clock but the mileage on the example i used is much more representative.
Just seen this one as well which cost per mile must be hard to swallow
http://www.autotrader.co.uk/classified/advert/2017...
http://www.autotrader.co.uk/classified/advert/2017...
jonny70 said:
A new Vantage is what ? 100k ?can u really buy one 3 years old for 50k?
My own was just over 55. It was a few years ago.'As new', 8,000 miles, under 3 years old.
A keeper, so tiny depreciation is purely academic.
I think the 4.3 model has moved up recently, probably now about 35.
The lowest price 4.7 maybe 45, but low mileage examples might now be up above 50 again.
You might be tempted ?
Put your questions to the Aston Martin forum.
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