Shall I treat myself to a nice car?

PJD

I've recently come off the ladder, as I dont know where I want to live at the moment, & I do not want to buy where I am currently working (Surrey) as I wont get much for my money.

I have around £57,000 sitting in the bank.

I am on around £30,000 a year, - at the moment I am managing to save money every month (£700+), as I am sharing, - but I dont know how long I will be in this financially cushy situation.

I am driving around in a bit of a heap, - it's not worth anything now, but will probably run for another year.

I know this is a weird question, but i've been umming & ar'ing about it all year!

I would like to spend approx £13,000 on my 'dream' motor, - but, - is this really giong to hurt my chances of getting back on the ladder down here in the south (might not be surrey, might be essex, kent etc) ??

Buying a nice shiny car (S2000 if anyone's interested) would make me happy, - but keeping my banger would obviously be the best thing to do financially.

Some people say I should live for the moment and enjoy myself, as i'll still have savings, I only live once, i'm single & not only might not have the opportunity to buy a 2 seater sports car again, i might be run over by a bus tomorrow.

Other people say that I should continue saving up for a property, - as its ultimately what I want.

Is £45,000 just too small a deposit for a house (well, I think I know the answer to that - yes it is!) -

I dont know what to do, - if i thought property prices may fall a little with rates going up now etc, i would go for it.. - i'm just so torn, i thought i would ask some strangers on the internet!!

so come on strangers! help me out! haha!

Cheers
P

PS - i'm 32

leftieM

Y'see, I reckon that's where a lot the plans of "I'll invest the equity money and then I'll have loads when the crash comes" end up. It's so much money people start nibbling away at it for cars, holidays, etc etc.

Ms_Piggy_2

How much will it cost you to run/insure/repair/service etc?

If it's very expensive on a day-to-day basis I'd perhaps re-think. Could you look at getting one that is a year or two old (and therefore cheaper)?

Essentially, by the sounds of it you will need a new car soonish, so it's a case of weighing up how much you want to spend.... It does make sense to buy it outright, but look at running costs.

PJD

It's good point Dave...

another viewpoint is re-sale value, - I can always sell the car later on down the road if I need to retrieve most of the money back, - yeah, I may be able to get one for less, but i'm wondering how easy that will be to sell, as it'll obviously have higher milaege etc...

But it's a good point, and I will certainly be on the lookout for a bargain. As you say, 7/8 would be a lot easier to swallow... hmmmmmm....


I'm very aware of what your'e saying leftieM - nibbling away at my savings.. - & I am planning on going on holiday at least once this year....

Cheers
P

PJD

it wont be cheap Ms Piggy, - but then my current old banger isnt either. Although it's long in the tooth, it still drinks petrol like its going out of fashion (2.3 24V turbo)

As I say, from purely financial point of view, keeping my banger is the best option, - as it WILL last me at least another year.

But sometimes you've got to treat & enjoy yourself... - haven't you?

leftieM

PJD wrote:

another viewpoint is re-sale value, - I can always sell the car later on down the road if I need to retrieve most of the money back

Devil's advocate here!
Cars always fall in value as they get older so I think that's a red herring. Also if you had to sell the car I presume you'd have to buy another cheaper one or would you plan to go without? Either way a sports car is a luxury not an investment or a necessity. If you really want it that's fine and understandable. If you're 32 you may start a family within a few years and 2 -seater cars are a no no then. However, the less money you have for a house deposit, the more you'll have to borrow down the line. Unless you find a rich missus to help out .

Alan_M_2

I now lease all my vehicles (apart from an old Mercedes I'm restoring), a little easier for me as I own a Ltd company, but there are some great deals available which would put you in your car for a small deposit with monthly payments, many places are offering 0% deals.

This would keep your deposit intact and earning interest, you could use a proportion of the £700 a month you're saving towards the car, and put the balance towards your deposit.

So on a personal Contract lease plan for a 36 month deal averaging 10000 miles a year. A £4000 deposit and £400 a month will get you a Brand new S2000 - with a bit of shopping around. Leaving you to save £300 a month and the bulk of your deposit intact.

You then know exactly what you're paying, warranty covers any mishaps, all you have to pay for is one service a year.

It's an option worth considering if you really want one.

sandieb

How much driving do you do?

Is it feasible to buy a "greener" more economical car?

leftieM

I expect that might not turn the heads he wants to turn!

DavidHM

You then know exactly what you're paying

... and for how long, unfortunately, which is not good if you need the flexibility of converting the car into cash for a house purchase.

PJD

Yes, valid points leftie... - i'm not going to see much of my money back, - but if I were to buy a car, I would certainly consider future depreciation. S2000 do hold their value reasonably well, but I accept you're ALWAYS going to lose money on a car.


Thanks for your comments Alan M - I never even considered leasing at all, it does sound like an attractive option - ie, keeping all my savings in tact.. - but the fact that i'll be tied in, does put me off. Thanks for your input.


Hi Sandieb - I do about 14,000 a year, I think financially I'll be better off keeping my petrol guzzler, as buying a greener car would mean eating into my savings. If i'm going to eat into my savings I'll buy something I want. I don't want a greener vehicle, - I want something that's going to put a smile on my face