New Car Advice Please

Trajal

Sorry, went to hit for a new line and ended up posting a reply! Wretched iPad. Anyway...

The final point I was looking to make was the simple question:

"Does the benefit of having a great new car outweigh the potential feeling of being debt free sooner?"

All four pages of this thread need to be summed up by the answer to the above. If it is yes, then buy your new car, enjoy it and I hope nothing negative happens. If no, then perhaps taking a step back and re-evaluating your priorities may be in order.

Either way I wish you luck, I hope that you too will have a 'debt free and proud' badge at or before your planned DFD.

Mine is over that way....

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notanewuser

Newyorkdreams wrote: »

If your finances are that good why are you on a debt free wanabee site then?

I hit "new posts" and look at the thread titles, not the forums they are in.

moohound

Newyorkdreams wrote: »

Hi Moohound - about £10K over the 3 years. But to be honest, I'm not sure that I want it now.

Cheers

NYD

And then a final payment of £ however much

It concerns me that you would be getting rid of a car you own in full to get less than half of another car. If you give it back after 3 years you have effectively given your old car away. But if you have gone off the idea, it's academic anyway.

Xx Moo

Newyorkdreams

Hi Everyone - I've taken on board all of the replies, thank you for taking the time to post and despite it getting it a little hot in the thread, I am very grateful. I am going to reflect on this for a while and discuss with my OH. My initial reaction is that we haven't thought it through enough and we need to weigh up all eventualities and options and what is important to us. This will take time.

For many like ourselves the debt that we have accumulated has been incremental and a result of bad decisions and a number of other factors which I summarised in an earlier post. I am proud that we are dealing with our debt and are taking positive steps to become debt free and learn from our mistakes. But, we are new to this and in many ways vulnerable. Similiar to many areas of life, persuasion I feel is more effective than harsh judgement.

This place, as Martin Lewis intended it to be, is a place of support and mutual understanding and at times I do feel that some do get a little carried away with the judgement of others. No-one is so perfect as to have never made a mistake. Yes it may be frustrating when people do not see something that is clear as crystal in your mind but that is just something that makes the rich tapestry of this world. And that is just my opinion, not something that needs to be influenced or persuaded a different way, just my humble opinion.

Thank you everyone for your support.

NYD x

Poppy9

Newyorkdreams wrote: »

I wouldn't be taking on more debt whilst I'm in debt because the money made for the current car would cover the payments until I was debt free (feel like I'm repeating myself here).

Sorry you are deluding yourself. You are taking on new debt. You will not own the new car. You may intend to put the money to one side to meet the repayments but what if something happens that you have to use that money or your parents decide to recall your debt as they will assume you have cash to spare if you buy a new car.

Trajal

Newyorkdreams wrote: »

Hi Everyone - I've taken on board all of the replies, thank you for taking the time to post and despite it getting it a little hot in the thread, I am very grateful. I am going to reflect on this for a while and discuss with my OH. My initial reaction is that we haven't thought it through enough and we need to weigh up all eventualities and options and what is important to us. This will take time.

For many like ourselves the debt that we have accumulated has been incremental and a result of bad decisions and a number of other factors which I summarised in an earlier post. I am proud that we are dealing with our debt and are taking positive steps to become debt free and learn from our mistakes. But, we are new to this and in many ways vulnerable. Similiar to many areas of life, persuasion I feel is more effective than harsh judgement.

This place, as Martin Lewis intended it to be, is a place of support and mutual understanding and at times I do feel that some do get a little carried away with the judgement of others. No-one is so perfect as to have never made a mistake. Yes it may be frustrating when people do not see something that is clear as crystal in your mind but that is just something that makes the rich tapestry of this world. And that is just my opinion, not something that needs to be influenced or persuaded a different way, just my humble opinion.

Thank you everyone for your support.

NYD x

I wish you both happy thoughts and wise moments as you make your decision. Please do let us know what direction you took - regardless of whether you listened to advice or not.

You're absolutely right, this forum is for support and not judgement. However, it's also a good place to get the odd 'kick up the backside' at times! I've found that very helpful myself, and we, none of us, should be above that.

Keep in touch with us all here, it's a terrific forum. I've been debt free a while now but I absolutely love it because I've got a new obsession. Rather than paying off debts now I'm "Collecting money"

It's a fun place to be and I hope that some of what I wrote gave you some food for thought.

racing_blue

NYD I'm late to the game here but you ask an interesting question and I'd like to have a pop at answering it.

You asked, basically, if you can sell your current car (which it appears you own outright and is worth £7500) and take out a lease on a new, fuel efficient car and be in the same net financial position in 3 years time.

I think it is unlikely, but you'd have to cost each option out in fulll to be sure. Maybe if you are a really high milage driver. Otherwise, probably no.

Looking solely at depreciation and fuel:

If you assume cars will depreciate in value by about 25% per year, a Vauxhall Mokka 1.6i S costing £16k new (I think this seems to be the entry level car of the type you mention) will be worth around £12k next year, £9k the year after than, and £7 the year after that. Call it £9k of depreciation. You'll pay for this one way or another through the lease.

Fuel economy wise, if you drive 10000 miles per year and get 52mpg (which appears to be the offical figure for the Mokka 1.6 S) it will cost you around £1350 per year. Call it £4k over 3 years.

So depreciating and fuelling that car for 3 years is going to cost you £13k.

By comparison, your current car will depreciate by £3k over the same period and cost perhaps £7k in fuel. So £10k.

You'd have to be getting up towards 20,000 miles per year before the depreciation and fuel costs become similar for each car, at around £17k

(The question you DIDN'T ask is: could it be done for less? ... no comment!)

[Deleted User]

Poppy9 wrote: »

Sorry you are deluding yourself. You are taking on new debt. You will not own the new car. You may intend to put the money to one side to meet the repayments but what if something happens that you have to use that money or your parents decide to recall your debt as they will assume you have cash to spare if you buy a new car.

I can see what the OP means here.

Because the lease will cost you a set amount each month, it's much the same as debt, i.e. it requires repayment. If you were not contracted for a set period of time the burden would not be as bad, but because you have to pay for the set time regardless of what you do - again it's very much like a debt.

Whilst you won't spend anymore than you do currently. Because the lease would be serviced via the sale of your owned car. The money from this sale could be put to greater use, mainly reducing your current debt and purchasing you a used car that would retain it's value for far longer than your 2/3 year lease car that you have to return.

Unfortunately I think your problems is created because you think that your wage is good. Of course you wage is fair, however it's nothing when trying to manage your multiple debts. Those sorts of debts can put a strain on anyone.

I can really see the benefit of paying off all of your debt. Your money will go so much further and there are lots of things you can do with the extra money. I should imagine that with your income you will be able to have most cars by the time you are debt free and into your first year of saving.

There are a lot of opinions here, mainly because they don't earn 50K and they don't understand what you are saying "by it won't cost you more to carry out this plan". People here are really strict on themselves and would never lease or rent because they look to the very long term results.

You sound like you are doing well to think of this, however just remember if you have to make do now, it means you may have great things in the future :T

Trajal

Agreed with the point made about how salary is nothing when trying to manage multiple debts.

I earn a bit more than 50k and I was in very serious trouble with less debt simply because of the nature and the circumstance of it.

To put it into perspective, back in 2008 when this all kicked off for me, I was earning around 80k a year and still managing to live beyond my means.

redpete

Newyorkdreams wrote: »

I wouldn't be taking on more debt whilst I'm in debt because the money made for the current car would cover the payments until I was debt free (feel like I'm repeating myself here).

It doesn't make sense to me to isolate the car costs from everything else and therefore think that a new car is the right answer. You still have other debts that you would be able to pay off faster if you went for a cheaper car.