How do people afford £30k-£60k cars with normal jobs?

PasturesNew

A lot of people are in couples - and are often earning more than you actually ever imagine.

If you're single and taking home £1500/month, paying £1000 on basic house/bills, then £100 for commuting, £100 for food and staring at your £300 left over for going out, clothes, holidays, treats, household random items, Xmas, birthday gifts for people, getting things fixed ... you can wonder "how the heck"...

But a couple, with one earning £1500 and the other on £2500 is rolling in it.

I've always paid cash for cars since I realised it's too easy to lose a job and have a big car payment you still have to meet monthly for 2-3 years .... and with £70/week dole money to pay for all bills/food/job hunting you'd soon be in trouble.

motorguy

PasturesNew wrote: »

A lot of people are in couples - and are often earning more than you actually ever imagine.

If you're single and taking home £1500/month, paying £1000 on basic house/bills, then £100 for commuting, £100 for food and staring at your £300 left over for going out, clothes, holidays, treats, household random items, Xmas, birthday gifts for people, getting things fixed ... you can wonder "how the heck"...

But a couple, with one earning £1500 and the other on £2500 is rolling in it.

I've always paid cash for cars since I realised it's too easy to lose a job and have a big car payment you still have to meet monthly for 2-3 years .... and with £70/week dole money to pay for all bills/food/job hunting you'd soon be in trouble.

And likewise a couple are usually in the position that they're both very unlikely to be made redundant at the same time, so they've always one salary coming in

Mercdriver

Strider590 wrote: »

Lease/PCP is a mugs game, I knew a few guys who bought the new Civic TypeR back in 2008, 2 months into their "deal" the company made everyone redundant, so they lost the cars and they had no transport for job searching.

If your not the boss of the company, then your expendable and expendable people are taking huge risks going into debt.

The argument for keeping cash in the bank is a moot point, your £150 a month would soon add up, plus bank interest rates are a complete joke.

Are you borrowing Fred's sweeping brush?

Different solutions suit different situations. These aren't gloves, one size doesn't fit all.

wesleyad

Also people forget that it maybe a high initial outlay but you recoup a lot on selling.

Assuming you dont buy brand new you will negate most depreciation, and you recoup costs on sale.

eg. 60k car new is 40k after 3 years. But after 8 years could be worth 30k. So you have effectively hired a 60k car for 2k a year,which may or may not be worth it depending on your circumstances, but as you can see you don't need to be a millionaire.

buglawton

Anyone got examples of £60k cars that only lose 50% after 8 years?

motorguy

wesleyad wrote: »

Also people forget that it maybe a high initial outlay but you recoup a lot on selling.

Assuming you dont buy brand new you will negate most depreciation, and you recoup costs on sale.

eg. 60k car new is 40k after 3 years. But after 8 years could be worth 30k. So you have effectively hired a 60k car for 2k a year,which may or may not be worth it depending on your circumstances, but as you can see you don't need to be a millionaire.

£30,000 over 8 years = £3,750 per year.

And i dont think there are too many cars at that price point that only lose 50% of their value in 8 years......

buglawton

Lease addicts should also reckon with a new problem - Dieselgate. Looks like hybrids will have the best immunity agains unexpectedly high depreciation if you want a weighty vehicle. But they don't have the sex appeal of luxury diesels which is the very reason for going expensive model/lease.

What's happening with current diesel leaseholders handing back their 3 year olds? Are the leasing companies taking the hit by using a pre agreed value at time contract was started, or are the leaseholders taking the hit at current market value?

wesleyad

Well I was only using rough numbers to show the point, inital depreciation is likely higher (highly variable depending on car). My personal example is more extreme:

Car was 48k new, I bought 4 years old for 23k, expected value at 9 years is 14k, so cost over 5 years is 7k, or £115pcm. Compare that to friends and families leases at sums vastly more than that for cars that have half the initial value.

Of course the problem is getting the initial cash.

motorguy

buglawton wrote: »

Lease addicts should also reckon with a new problem - Dieselgate.

Dieselgate is a myth being perpetuated by the newspapers to try and drum up the next "scandal". Theres a steady move by people - particularly of small cars - away from diesels as small petrols are now more economical than they were and competitively priced. Too many people were buying diesels for the wrong reasons so theres now a rebalancing.

There is no mass exodus away from diesels when you actually take even a cursory look beyond the "headlines".

buglawton wrote: »

Looks like hybrids will have the best immunity agains unexpectedly high depreciation if you want a weighty vehicle. But they don't have the sex appeal of luxury diesels which is the very reason for going expensive model/lease.

I would say the likes of Tesla are making electric cars sexy and Lexus, Mercedes and BMW have been doing big hybrids for years.

buglawton wrote: »

What's happening with current diesel leaseholders handing back their 3 year olds? Are the leasing companies taking the hit by using a pre agreed value at time contract was started, or are the leaseholders taking the hit at current market value?

Clearly a massive lack of understanding on your part about leasing. You just hand the car back. What its worth or what it cost the leasing company is not your concern. Not one !!!! will you give.

Likewise most leasers just look for the next best deal, they dont give a monkeys about what "might" happen with residuals at some point down the line.

BeenThroughItAll

Depends on your definition of a 'normal' job. For some people that's a road sweeper, for others CEO of a plc.