Sruggling to make a decision on future savings vs new car

danlightbulb

I don't mean to be rude, so I apologise, but it is very frustrating. Over on PH, I ask about some relatively modest car options in the grand scheme of things, and I get told to buy a £1500 Saab by people who own £100k sportcars as their dailies and £50k weekend toys. My salary is pretty decent compared to the UK distribution yet here I am scratching around for a car with a tiny bit of desirability and struggling to fund it. It doesn't make any sense, and I don't understand how other people are doing it and I can't.

Puddylove

danlightbulb wrote: »

I don't mean to be rude, so I apologise, but it is very frustrating. Over on PH, I ask about some relatively modest car options in the grand scheme of things, and I get told to buy a £1500 Saab by people who own £100k sportcars as their dailies and £50k weekend toys. My salary is pretty decent compared to the UK distribution yet here I am scratching around for a car with a tiny bit of desirability and struggling to fund it. It doesn't make any sense, and I don't understand how other people are doing it and I can't.

Maybe they earn more than you, maybe they have fewer outgoing. Perhaps they have no children, and no existing debt to service. They may have saved up or they may have lost loved ones and inherited money.
Or they may be in debt up to their eyeballs and worrying.
If you care, then ask them.

Or you could take positive action and get a second job? I work FT and PT, it can be done.
P x

Herzlos

danlightbulb wrote: »

I'm being flippant clearly. But genuinely I would like to know what you think an appropriate salary is to be able to purchase a car for £8k, given the uk average salary is about £26k.

There's a couple of points;

Firstly, it's not just about salary. Obviously the answer you don't want to hear is "enough to have £8k in savings". Even in borrowing, it's roughly (<existing-debt> + 8k) x 2.

So given you owe 10k? already, you're at 36k after your child deductions. That doesn't mean it's wise though, even if you can afford it. I earn about that but wouldn't spend that on a car.

Secondly, it's more about the car; very few people have told you not to get a loan (particularly on PH), even if it's a bad idea. Most of the advice has been that with your budget you need to be looking at more realistic cars. Spending £8k on a car that was £16k new with a £16k cars running costs is fair enough on a tight budget. Spending £8k on a car that was £40k new with a £40k cars running costs is stupid on a tight budget.

I know; my £5k car would have cost about £30k new and I pay for it every time something goes wrong (£200 for a new rear wiper assembly, £200 for a new starter motor, £30 for a set of flipping wheel nuts).

When you drop your incredibly exacting requirements to fit your reality, you should be able to get a replacement for your current car for a fraction of that money, but it does mean it'll likely be another Mondeo and not an aggressive looking 4x4 or 5-series BMW.

You need to be looking at the total cost of ownership, and not just the cash price or quoted mpg figure.

Mr_Goodkat

A newer car is always nice to have but should not be prioritised above getting on the housing ladder and reducing debt.


In your position I would be saving as much as possible to get on the hosing ladder as soon as possible, house prices and interest rates are likely to go upwards long term and the shortage of affordable houses is only going to get worse as the population grows so why wouldn't you try to do that first?


Now that you have your debt at 0% I would save as much as possible whilst servicing the debt and speak to a good broker to understand what deposit and what amount of 0% debt you can have to get the house you want and target that.


Paying rent for a house and finance for a car for me is just madness.


Car finance is also going to limit your borrowing power when it comes to affordability of a mortgage for a house purchase.


Your car choices also seem crazy, if I was going to spend £8k on a car I would be looking for something as new, as low mileage, low tax band and as economical as possible rather than get an ancient high mileage car that was £40k+ new - you simply can't afford the on going costs of ownership of a car like that.


You really need to put a new car to the back of your mind, save like hell for a house, if the car goes belly up before then spend a small amount of your savings e.g a couple of grand tops on buying something to keep you going until on the housing ladder.


I think your indecisiveness on the car is because you know deep down it is bad idea!

AndyT678

danlightbulb wrote: »

I haven't ignored any advice at all. I've taken it all on board. What salary do you suggest I need to buy a used 4 year old car? £70k? £80k? £90k? Maybe if I just pop out next year and get a job for £100k I'll be able to upgrade to a Volvo?
...
I'm being flippant clearly. But genuinely I would like to know what you think an appropriate salary is to be able to purchase a car for £8k, given the uk average salary is about £26k.

It's not about salary; it's about mindset. Ultimately do you want to spend your life working to have new cars or would you rather have enough money not to have to bother working? Continually paying someone to borrow their money rather than accumulating your own leads to a life of financial insecurity.

I have a 10 year old car with 100k miles on it that's every bit as comfy to be in as my mate's £35k BMW and every bit as capable of driving down a motorway.

I do have the sort of salary that you're flippantly talking about - more if you include the wife's income and I live about 50 miles away from my work which means quite a long commute. I also have the money in the bank but there is no way I'd seriously think about spending £8k on a car in my situation. For me it would be madness.

At the moment I still have a mortgage to pay and I still have to get up and go to work to earn money. Once I get past those hurdles which should happen in the next 10 years or so I might reconsider it but by then I won't be commuting so what would be the point!

BrassicWoman

I don't think you are struggling to make a decision; I think you have made the decision based on emotions are are struggling to justify it with logic.

Which are you planning to let rule your life? Neither is right or wrong but one tends to have more predictable outcomes than the other!

What input do your partner/family etc have to this decision, as it will affect them too? Should this really be a family chat?

Single people with no commitments can of course make decisions more easily because it impacts no one but them.