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

System

rudekid48 wrote: »

This is true, but can work out different for higher OTR specs. My current car has an OTR price of £44k and over the first 2 years would probably cost another £1k in servicing / tyres. The equivalent at 2 years old with the mileage that I would do is around £29k - so a depreciation of circa £15k + £1k servicing etc.

Over the course of the lease I will pay just under £12.5k. So for me it works vs buying. Appreciate it doesn't always work though. As someone else posted - it's horses for courses...

Just done the maths on my Mondeo. Brand new price is £24,000.

£1285 initial payment, £428 a month. MILEAGE LIMITED TO 10000 MILES A YEAR:eek:
So 2 years costs you £11,557.

I paid £8500 for mine at 2 years old.....

Cornucopia

£24k at new less £11,557 paid by the first owner, allows for a price of £8500 at 2 years old, and there's some money missing there, too.

Personally, I don't think that £428pm for a Mondeo is good VFM when I could get a Skoda Octavia for half that.

Mondeos suffer from huge depreciation from new (as a consequence of being popular for fleets). That's always been the case for "Executive" sized Fords and Vauxhalls going back to the Granada and the Cavalier. As such, they can make good buys at 2-4 years old. But that's just two or three models out of hundreds - each one with its own profile in terms of new cost, depreciation and finance options.

thescouselander

Tarambor wrote: »

But it is only £100-£175 a month if there is no up front payment. Almost every lease/PCP below £200 a month has an initial rent or deposit of £3000+.

Really? Have you actually researched any leasing deals? Usually for a lease it's 6 to 9 months up front which is nowhere near £3000.

Cornucopia

Exactly.

The Skoda Octavia (1.6 TDI SE) lease I mentioned above is 6+35 @ £196 with 10K miles per year.

In other words, an initial payment of £1379.

motorguy

Tarambor wrote: »

Just done the maths on my Mondeo. Brand new price is £24,000.

£1285 initial payment, £428 a month. MILEAGE LIMITED TO 10000 MILES A YEAR:eek:
So 2 years costs you £11,557.

I paid £8500 for mine at 2 years old.....

The trick with leasing is to go for the deal, rather than the car.

I'm pretty sure if you give us the details of the specific car there's a much better deal out there than the one you're quoting anyway, but with leasing the very best deals can be got when you say "I want a large 5 door hatchback" rather than a specific car.

Horses for courses etc. I don't lease and like you opted for a recent used car (year old Passat) rather than a new leased one.

qwert_yuiop

motorguy wrote: »

Maybe they earn more than you think?

Likewise getting a £30K for £200 odd a month isnt that difficult on a lease or PCP deal.

Check average wages on google. I was surprised how few people make more than £40,000. Very few make serious money of £100,000 - under 1%.

Stoke

I'm generalising, but I always associate FIAT 500's with youngsters (primarily my generation ish) financed up to their teeth, paying way more than they should be, probably leaving themselves with years of debt and regret.

When I see an Audi A1, I always think that's the next logical step. Once you can comfortably afford the 500, you move up to the A1 and get financed up to the teeth again.

And from chatting to people at my work, it seems to be the modus operandi for the most part.

thescouselander

Strider590 wrote: »

These sorts of streets tend to be typical middle-class suburbia, relatively new, detached 2 or 3 bedroom houses, German cars up and down the street, the sort of place my folks moved away from, they'd joke about about how when one neighbour gets a new car, within a few weeks both homes either side will have a new car too.

The funny thing is the house I grew up in was a 5 bedroomed house sat on 2 acres of land, with a full sized snooker room above the double garage, it had similar homes next to it and the most well off people around there drove old bangers like rusty old Vauxhall cavs. Folks moved from there because it was too big for two people to look after.

Some people want money and a decent lifestyle, some people just want to pretend.

So rather than spending money on cars your parents and their neighbours decided to spend it on a big house instead. That's fine but not everyone has a requirement or desire to live in that sort of house. Having to look after a smallholding doesn't sound like a decent lifestyle to me as I'm not a farmer.

fred246

It makes sense to spend big money on appreciating assets. Big houses are great when you are bringing up a family. I am going to retire very early soon. If we ran out of money the worst thing that would happen is that we would have to downsize. The kids would probably have left home by then. We could downsize to a 4 bed detached and free up £300k.

rudekid48

Tarambor wrote: »

Just done the maths on my Mondeo. Brand new price is £24,000.

£1285 initial payment, £428 a month. MILEAGE LIMITED TO 10000 MILES A YEAR:eek:
So 2 years costs you £11,557.

I paid £8500 for mine at 2 years old.....

Which just goes to show that leasing only works on certain cars if the deal is right. For £6 a month more and a slightly higher deposit there are 2 year lease deals for a new Audi A6 Ultra S-Line with 20k miles per year. That's just one example, there are loads of deals out there to be had.

My approach is to set a monthly budget and see what deals are available rather than choose a model first. Doesn't always work if you've got your mind set on a particular car though.

It does seem to follow that the better lease deals are on higher OTR price cars. Maybe they depreciate less, I don't know.