Don't buy a new car out of uni...

lalman

I wish i was given that advice (dont buy a new car out of uni) when i finished uni 6 years ago.

I was lucky enough to land a 17k job about 5 months after i finished uni... which is pretty decent up north... as i was living with my folks i saved for a year and decided in my 'wisdom..' buying on PCP a 20k audi was a good deal... I paid 242 pounds a month (around 20% of my salary at the time) and when the PCP finished 3 years later i was still on a similar salary as the financial crisis hit... anyway long story cut short... i decided not to get a new car and instead buy my existing car as i had only done 18 thousand miles in it... 2 years further on and its today.. and the 8200 i owed on the car i loaned and just paid 3500 early (saving 116 pounds interest).

I wish i had saved that money and bought a second hand car instead - yes my audi is still in good working order but it was really a stupid decision.

The lesson i have learnt is i will always buy 1-2 year old cars... and keep them until they are uneconomical....

anyone else got any sage advice from unfrugal youths?

jimjames

I've done the same when I was younger.

I've had my current car for 4 years. Bought it at 3 years old with high miles and at 30% of the new price. No real issues in 4 years other than servicing and it's now at 140k. Lost about £3k in depreciation in 4 years but would have lost £18k if I'd bought it new.

The downside of spending so much on new cars when you're young is that it isn't available as savings as a deposit to buy a house.

lalman

I have definitely paid for that Jim - thats a really valid point. I am very fortune my salary has increased significantly in the last few years that has helped fund a flat i let out and will hopefully help me fund a new deposit too... but the car was such a drain on cashflow i didn't realise it at the time...

242 +70 for petol + 60 for insurance (i bought it once a year at 700). which is close to 400 a month... which at 22 is alot of money.... well near rent levels!

Linton

lalman wrote: »

......

anyone else got any sage advice from unfrugal youths?

A general rule which also covers the new car situation....

Never buy anything on credit other than a house. All expenditure should be from saved money.

moneyfoolish

Linton wrote: »

A general rule which also covers the new car situation....

Never buy anything on credit other than a house. All expenditure should be from saved money.

Completely agree with that. My parents brought me up to follow their lifestyle of never owing anything. I'm now 68 and have never had anything on credit in my life other than my house. I'm certainly not one of the millionaires you will read about on here but I've always had peace of mind and I've never had a money worry in my life. If I can't afford something I don't buy it!

JohnRo

anyone else got any sage advice from unfrugal youths?

0% credit cards work for me on unavoidable expenses, which a car might be, that aren't cheaper by debit payment. Admitted the reward isn't great and it requires solid discipline but every bit extra helps.

On the other hand the psychology of having a bank account in your name with several thousand in it and knowing it isn't your money to spend at any stage, no matter what, is perhaps where some might be tempted to dip into it and come unstuck.

lalman

Moneyfoolish you inspire me!

Linton - perfect sage advice that i will follow throughout my years on this planet moving forward (if i can).

JohnRo thats a good idea - and i have just ordered a new credit card last night... i dont normally use credit cards but i think they are good for backups and emergencies....

pat_cashmoney

Never paid more than £1000 for a car. Apart from the first one they have all lasted at least 3 years with minimal jobs required (I do between 5000 and 8000 miles a year), until something went pop or rusty and then I moved on to the next one. Best one was the £125 Polo that I got 3 years out of. A £600 Polo lasted 5 years and was still going when I moved on, it had a leaky petrol tank once but it only cost £100 to fix. That was the worst of it. I reckon cars are a complete waste of money, their desirability is a total con, and unless you are doing thousands of miles a year and comfort is key get the cheapest, most reliable looking one you can.

With all that money I saved I amassed an awesome vinyl record collection instead

cloud_dog

Whilst I would never dismiss the don't buy on credit guidance I have to say that I've.....

Funded two cars on 0% finance deals. Yes there is the transfer fees to consider but at 2.9% for 15 to 24 months it works out at a very low interest rate. Plus you can overpay when you have the money

Pay annual costs which have high APRs for monthly Direct Debit on 0% purchase cards. I've managed to align both my and OH car insurance to be in October / November together with house insurance, BT, and TV licence. Then I either set aside a monthly equivalent or arrange a monthly payment for a similar amount.

Yes, its a bit a of a faf (applying for a new 0% purchase card each Sept) and you need to keep your eye on the ball for the BT card(s) but you need to take advantage where you can.

EDIT: Another thing you can do (I do) is..... If you incur expenses in doing your work pay for them oin a 0% purchase card, put the company reimbursement in to a savings account / offset mortgage (whatever is most efficient) and then pay the card off at the end of the 0% period. Then take out a new 0% purchase CC.

atush

If you had come here, we would have told you not to buy that Audi (and have told others like you lol).


My current car is the only one I have bought new in many years (and is 9.5 years old now- Oh's car is an audi bought 14 years ago as his company car but we bought it second hand when they stopped doing them).


Generally I buy 2 yr old ones, one yr old oens are hard to find.

cloud_dog

atush wrote: »

Generally I buy 2 yr old ones, one yr old oens are hard to find.

In theory my car (I get an allowance) must not be more than 6 years old but, I've never had a line manager who has asked / cared.

My last one was nearly 10 y.o. before replacing it with an 18 month old.