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

motorguy

wesleyad wrote: »

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.

Yup. Its each to their own. Not everyone wants to run a 4-9 year old car though (and out of manufacturers warranty for the total period of your ownership), so its not really comparing like with like.

Personal loans are as cheap as chips currently so getting a loan for it wouldnt be an issue for most if they did want to go down that route

Cornucopia

Whichever way you look at it, Leasing and PCPs are effectively a bet against an unmanageable change in circumstances.

For many people, a car payment of, maybe, 10-20% of their net income is easily manageable as long as their income is sustained. At the extreme, I can see people with a particular enthusiasm for expensive cars allowing that proportion to rise to 30%, if they have the money. That's their choice, and even if I had sight of their entire financial position (which is unlikely) I wouldn't criticise.

For me, Leasing/PCPs work at both ends of the spectrum (and the mid-market for new cars has always been difficult). At the low end, getting a new car for £100-£175 per month is a no-brainer.

At the other end, I wouldn't want to even consider a £30-60k car without the protection of a defined scheme for managing depreciation, which is massive on most cars in that price range.

buglawton

motorguy wrote: »

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".

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

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.

If old contract holders have avoided the depreciation hit (no Dieselgate? http://www.telegraph.co.uk/news/2017/09/11/used-diesel-cars-have-lost-quarter-value-since-start-2017/ ) then they've done very well.

The leasing companies must be scrambling to revamp their rate cards, plus I suspect some will now go belly up if they absorb that hit on 1000s of returning cars.

Yes the hybrid range is rapidly improving but in some sections is still a bit sparse. If manufacturers are depending on the lease market they'll be scrambling to improve their range.

I wonder how the Prius model did in the depreciation stakes over the last 3 years, since renewing the battery at X years is a major concern. Ironically even when you buy, many hybrids are sold with the battery itself as a leased item.

thescouselander

I used to buy cars outright but now I lease/PCP as does the Mrs. The list price of my car was about £30k but the deal was calculated on a much lower price than that and the monthly payments come out at less that 7% of my net income.

Yes, there are cheaper forms of motoring but the car payments are by no means the biggest expenditure within the budget and as we both prefer to drive newer cars instead of bangers the payments are worth it as far as we're concerned. Its really not a big outlay - in my twenties I used to spend more going out on the pish than I spend now on my car.

buglawton

Agree but anyone reading this thread needs to know that 'not new' <> banger.

bigadaj

wesleyad wrote: »

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.

Waht car is that?

motorguy

buglawton wrote: »

If old contract holders have avoided the depreciation hit (no Dieselgate? http://www.telegraph.co.uk/news/2017/09/11/used-diesel-cars-have-lost-quarter-value-since-start-2017/ ) then they've done very well.

Oh please Baby Jesus, no!

Did you even read that !!!!!? Its data from a clickbait site motorway.co.uk and is a sample of specific OLD cars in the £2,000-£3,000 range. Its frankly NONSENSE. Complete horse !!!!. The "journalists" who picked up on it and drummed up a story on it need taken out and SHOT. "old cars depreciate, shocker"

And "contract holders"???? A leasee doesnt care, and frankly the leasing company care little too as most are on a buy back from the manufacturer at a pre-agreed price.

buglawton wrote: »

The leasing companies must be scrambling to revamp their rate cards, plus I suspect some will now go belly up if they absorb that hit on 1000s of returning cars.

They're not. Just have a look. Diesel contract prices are still the most competitive and viable.

And you genuinely, wholly dont understand the leasing market if you think the leasing companys are exposed.

buglawton wrote: »

Yes the hybrid range is rapidly improving but in some sections is still a bit sparse. If manufacturers are depending on the lease market they'll be scrambling to improve their range.

Theres no "scrambling" to be done. The new car market is strong, based on diesels and petrol sales. Hybrids will creep up a little over time, diesels will drop a bit but purely due to better petrol variants and fear over lack of clarity on local government taxation in to cities. NOT because of "dieselgate"

buglawton wrote: »

I wonder how the Prius model did in the depreciation stakes over the last 3 years, since renewing the battery at X years is a major concern. Ironically even when you buy, many hybrids are sold with the battery itself as a leased item.

Whys battery replacement a major concern on a Prius?? Toyota have been at hybrids for literally 2 decades now, and Toyota cover battery failure for up to a decade

http://www.greencarreports.com/news/1078138_toyota-hybrid-battery-replacement-cost-guide

I cant believe people actually buy in to the dross in the tabloids without even taking a cursory look at the reality.

n217970

I know I am one of the best paid at work but have, I think the oldest car in the car park. Many of young 20's lot take home less then half what I do yet have the newest/nicest cars. There is a simple reason for this.

I have a lot of expenditure every month, they don't. They don't have a mortgage, kids, long commute etc, they live with parents and £300 a month on a lease or PCP seems to be an obvious thing to do with all that disposable income. They moan like hell about trying to get on the property ladder though.

I bought my car in cash for what would be 6 months of their repayments, and in fairness to it its a very nice car to drive but it does look scruffy in our car park. I treat it as a badge of honour.

consumers_revenge

credit, credit and more credit.

buglawton

motorguy wrote: »

Oh please Baby Jesus, no!

Did you even read that !!!!!? Its data from a clickbait site motorway.co.uk and is a sample of specific OLD cars in the £2,000-£3,000 range. Its frankly NONSENSE. Complete horse !!!!. The "journalists" who picked up on it and drummed up a story on it need taken out and SHOT. "old cars depreciate, shocker"

And "contract holders"???? A leasee doesnt care, and frankly the leasing company care little too as most are on a buy back from the manufacturer at a pre-agreed price.




They're not. Just have a look. Diesel contract prices are still the most competitive and viable.

And you genuinely, wholly dont understand the leasing market if you think the leasing companys are exposed.



Theres no "scrambling" to be done. The new car market is strong, based on diesels and petrol sales. Hybrids will creep up a little over time, diesels will drop a bit but purely due to better petrol variants and fear over lack of clarity on local government taxation in to cities. NOT because of "dieselgate"....

24,000 diesel cars surveyed is a lot of effort for clickbait so maybe that's why the non-tabloid the DT headlined it. You're right about them being older cars, av value say £2000 though, which makes the depreciation quoted much more alarming. It will feed through up the chain to newer models.