New Loan - Am I being sensible?

Darklinglion

Hi guys, I'm looking for some advice.

I'm after a new car but I'm trying to justify it to myself regarding the loan repayments.

The car I'm looking for is in the region of £13-14,000 mark which to a lot might not seem excessive. Although that said most examples are 90,000 miles + and 5 years old. Big exec saloon.

I'm earning approx £23,000 gross with virtually guaranteed overtime of about £2500 a year.

My housekeeping outgoings are about £425 a month and I save £125 a month for upkeep of a car (ins, tax repairs etc).

I'm pretty certain I'm well within my limits but I'm interested to hear what other people have borrowed for this sort of thing in relation to their earnings.

Cheers for any advice

jonesMUFCforever

Just my 2p worth - there is a hell of a gap between a salary of £23k with only outgoings of £425 per month and savings of £125 per month.

Where does the rest go?
How much would the loan cost - do you have any other debt / rent/ mortgage?

Gaz83

No.

In short, you're not telling the full story.

If you have outgoings of only £550 you must have a spare £1,000 each month. Either you've got savings (which you would be better using), debt that you're not mentioning (that you're paying with this £1,000) or you're not being honest with your outgoings.

Pixie5740

On a salary of £23,000 you must be taking circa £1500 home a month and with your bills coming to around £425 a month where is that £1000 going?

I'm not convinced it's ever sensible to borrow money for a depreciating asset such as a car. Borrowing money is stealing from your future self. Except for mortgsges maybe since you have to live somewhere.

Pixie5740

Great minds think alike :beer:

Darklinglion

Yes I do wonder myself where all the extra money goes!

I'm earning about 1800 before tax each month, so that's about 1450 take home pay. I've a loan currently for £120 a month for a motorbike which will be paid off next month so realistically I'm not taking that into account.

Here's a run down of my current monthly expenditures minus the loan I currently have.

Wage £1450

Housekeeping £425 (Mortgage, council tax, gas, water, elec, home ins, life ins, TV Licence, phone broadband and tv).

Car/bike allowance £125 (Insurance, tax, repairs & tyres etc)

Fuel £50 (approx - more in summer with bike use)

Food £200

Savings £50


Ok ok....Maybe I'm more trying to justify buying a 5 year old, 100,000 mile car for £13-14k?

ricky_v

Darklinglion wrote: »

The car I'm looking for is in the region of £13-14,000 mark which to a lot might not seem excessive.

Borrowing to buy a £13-£14k depreciating asset is very excessive to me and I imagine to alot of people.

Heed what Pixie5470 said

I'm not convinced it's ever sensible to borrow money for a depreciating asset such as a car. Borrowing money is stealing from your future self. Except for mortgsges maybe since you have to live somewhere.

ricky_v

Darklinglion wrote: »

Ok ok....Maybe I'm more trying to justify buying a 5 year old, 100,000 mile car for £13-14k?

Excuse my ignorance, but what's so special about a well used car commanding £13-£14k?

lee111s

ricky_v wrote: »

Excuse my ignorance, but what's so special about a well used car commanding £13-£14k?

Something like an Audi S4 would command this and for a good reason.

Darklinglion

ricky_v wrote: »

Borrowing to buy a £13-£14k depreciating asset is very excessive to me and I imagine to alot of people.

Heed what Pixie5470 said

I do always bear that in mind and always try to save up to purchase things where possible, but cars are another matter and I think it's fairly normal to borrow some of the cost of a car.

ricky_v wrote: »

Excuse my ignorance, but what's so special about a well used car commanding £13-£14k?

Can I judge from that response that it's a quite normal, typical thing to do? There's a hell of a lot of cars in that price bracket that have done less than half that mileage and are much newer also. It is pretty much the only car I would like at the moment though.

Jaguar XFS 3L D.

ricky_v

I was under the impression new cars cost £13-£14k and a half decent second hand car would be about £3-£4k?

If you really want the car which essentially gets you from A to B as well as cheaper models and put yourself into debt paying interest for it then go ahead and enjoy the vehicle however to your original question of

New Loan - Am I being sensible?

then in my humbled opinion no, you're not being sensible. Wait a while and save up.:)