What percentage of monthly salary to spend on car lease?
Discussion
Hi all, I’m exploring the idea of buying my next car on lease. I’m currently living with parents and have just gained a good graduate job, living in the north east of England so expenses are really too bad. Just want to know what percentage of my monthly salary should I spend on car lease and also what’s more ideal, contract hire or pcp?
Thanks!
Thanks!
I would spend less than "too much", but more than "not enough".
Only you know what level of spending, and what car on the drive, will make you feel those things.
Still, I had the good sense to be born in generation X, before properties got completely out of reach.
If I were to be 21 now, I probably would be tempted to stay with ma & pa and throw my disposable cash at having a leased golf R on the(ir) drive.
Not sure they'd be so keen mind...
Ian
Only you know what level of spending, and what car on the drive, will make you feel those things.
Still, I had the good sense to be born in generation X, before properties got completely out of reach.
If I were to be 21 now, I probably would be tempted to stay with ma & pa and throw my disposable cash at having a leased golf R on the(ir) drive.
Not sure they'd be so keen mind...
Ian
when i was a similar age i bought a 2 year old bogo spec a3.
It lasted me 5 years and didnt have one surprising bill. whilst it was dull, it was great to have a reliable car that didnt cost me anything whilst saving / spending a lot of money on my first house. spending £300 a month on leasing a car during this time would have been very annoying.
Just something to consider if you're thinking of getting on the property market.
(i'm also not an advocate for buying an old banger and spending hundreds keeping it on the road)
It lasted me 5 years and didnt have one surprising bill. whilst it was dull, it was great to have a reliable car that didnt cost me anything whilst saving / spending a lot of money on my first house. spending £300 a month on leasing a car during this time would have been very annoying.
Just something to consider if you're thinking of getting on the property market.
(i'm also not an advocate for buying an old banger and spending hundreds keeping it on the road)
mcg_ said:
when i was a similar age i bought a 2 year old bogo spec a3.
It lasted me 5 years and didnt have one surprising bill. whilst it was dull, it was great to have a reliable car that didnt cost me anything whilst saving / spending a lot of money on my first house. spending £300 a month on leasing a car during this time would have been very annoying.
Just something to consider if you're thinking of getting on the property market.
(i'm also not an advocate for buying an old banger and spending hundreds keeping it on the road)
Even a basic spec 2 year old A3 isn’t cheap. If you bought it outright, that’s money that you could have spent on the house, or if on finance, it’s only cheaper than a lease if the interest payments, depreciation and maintenance were less than the cost of leasing. It lasted me 5 years and didnt have one surprising bill. whilst it was dull, it was great to have a reliable car that didnt cost me anything whilst saving / spending a lot of money on my first house. spending £300 a month on leasing a car during this time would have been very annoying.
Just something to consider if you're thinking of getting on the property market.
(i'm also not an advocate for buying an old banger and spending hundreds keeping it on the road)
Tricky question as everyone is different in terms of lifestyle and job security.
We're also currently debating this on our house however. We currently have 3 cars:
2009 fiesta (fully paid for)
1958 beetle (fully paid for)
2016 Clio Trophy 220 (pcp 2 years into a 4 year deal)
We have some equity in the clio as i put a deposit down but the Mrs wants to swap it for something bigger, more family friendly and shinier because "everyone has a nice car". She also refuses to drive the clio which doesn't help.
We're currently paying approx 7% of our net salary on the clio repayments each month but she wants to double that. I'm reluctant to jump I to more debt but imagine I will back down in the end...
ETA.
House before car.
We're also currently debating this on our house however. We currently have 3 cars:
2009 fiesta (fully paid for)
1958 beetle (fully paid for)
2016 Clio Trophy 220 (pcp 2 years into a 4 year deal)
We have some equity in the clio as i put a deposit down but the Mrs wants to swap it for something bigger, more family friendly and shinier because "everyone has a nice car". She also refuses to drive the clio which doesn't help.
We're currently paying approx 7% of our net salary on the clio repayments each month but she wants to double that. I'm reluctant to jump I to more debt but imagine I will back down in the end...
ETA.
House before car.
Gareth1974 said:
Even a basic spec 2 year old A3 isn’t cheap. If you bought it outright, that’s money that you could have spent on the house, or if on finance, it’s only cheaper than a lease if the interest payments, depreciation and maintenance were less than the cost of leasing.
was 11k for a 59 plate 2 years old. traded it in 5 years later for 4.5k. sounds like cheap motoring in a nice reliable car if you ask me.Tomo1971 said:
Pistonheader101 said:
10% after tax is the general rule of thumb
f
k me, are their leases available for £70?I think I am over budget at £400 a month then!!
(the other £330 must come from my dividends)
The 20 4 10 rule, 20% down, 4 years max, 10% of your salary. It's very common if you Google it.
mcg_ said:
was 11k for a 59 plate 2 years old. traded it in 5 years later for 4.5k. sounds like cheap motoring in a nice reliable car if you ask me.
I did a similar thing: Bought a VAG for 9K, run for 3 yrs, sold for 4.5k - decent considering 15k p/a, nice motor and no headaches. Worked out nearer 20% (net salary & inc fuel) over that period but served me well with no hassle. @OP, Everyone has different priorities. If I was doing lower mileage at the time then I’d have got something cheaper, more fun and customising it to make it my own.
Pistonheader101 said:
Tomo1971 said:
Pistonheader101 said:
10% after tax is the general rule of thumb
fk me, are their leases available for £70?I think I am over budget at £400 a month then!!
(the other £330 must come from my dividends)
The 20 4 10 rule, 20% down, 4 years max, 10% of your salary. It's very common if you Google it.
It’s not a funny joke, mixed with mild showing off.
Tomo1971 said:
fk me, are their leases available for £70?
I think I am over budget at £400 a month then!!
(the other £330 must come from my dividends)
If your salary is £700pm after tax, then yes, £400 is insane. You may be living at home and have no bills, but 50%+ of your salary is way too much. k me, are their leases available for £70?I think I am over budget at £400 a month then!!
(the other £330 must come from my dividends)
Honestly, on that sort of salary, living at home, I wouldn't consider a lease. A cheap Dacia will cost you £80pm on a lease but your much better to get something like a 6-7 year old Polo.
Chances are, you wont be approved on any finance on a salary like that, not when you're talking about more than half of your salary.
Save your money and in a couple of years time revisit the idea.
Flumpo said:
It’s a joke, his salary is £700 a month which is the min/max not to pay ni contributions but still qualify for state pension contributions. He may earn many thousands more through dividends, which are not classed as salary.
It’s not a funny joke, mixed with mild showing off.
Not showing off, my dividends are only enough to make a normal salary :-(It’s not a funny joke, mixed with mild showing off.
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