How much should I be saving?

Money_Or_Cars

I'm new to this and learning how to use the site, so please take it easy.....

I am trying to get the right balance between saving and enjoying myself. I love cars and have always had an outgoing for cars ever since I started working and earning.

I currently have a really nice car, but I have been tempted to go for a brand new one on PCP. I totally understand what PCP entails in terms of how much it will cost and not actually owning the car at the end.

I am able to save £500 per month, even if I go for the PCP deal - so I am not worried about what I can afford. What worries me is how much could this affect me when I want to apply for a mortgage? I am 23 and currently living at home and trying to save enough for a deposit for a house/mortgage.

Any advice/info would be much appreciated, thanks.

jimjames

I'd recommend reading the Motoring forum here, in particular the posts about people who are having problems with PCP when their circumstances change. Bear in mind that you'll be paying pretty much all depreciation from your monthly payments.

If you like cars how about looking at ones that don't depreciate instead or stick with what you've got?

If you're saving for a mortgage then everything you spend on other things will slow down that end goal

Bravepants

What about looking at a modern classic car? As jimjames said, something that will gain value or stay the same if looked after and not lose thousands of pounds as soon as it's driven off the showroom forecourt.

My partner and I own two cars, a 15 year old Mazda 6, likely needing to be changed at the end of this year; and I have an 18 year old Fiat Coupe 20VT Plus. The latter is fun to drive, looks the business and is appreciating in value.

I tend to avoid PCP as it reduces cashflow and I don't want to be in debt. I would prioritise your goals. That PCP monthly payment could get you a better house. By better I don't mean bigger, I mean one that doesn't need as much renovation.

[Deleted User]

Cars are nice but a huge waste of money IMO.


I had a new Porsche when I worked in a job with a salary to match, I had no finance just bought it using my debit card.


Then decided I hated the job paying the salary and took a sabbatical after which I did a job earning a lot less but I was happier.


I sold the car as I needed money quick to bid on a piece of land and lost 13k on it in a year.


Now I lead a simpler life and think what a waste of money.


You are young and you will think differently in a few years, after all you cannot live in a car no matter how nice.


Bricks and mortar come first and then when / if you can afford it a nice car.

PeacefulWaters

Are you maximising your employer's pension contributions?

Money_Or_Cars

I work for the local authority. I'm told it's one of the best pension schemes around - Whatever I pay in, they pay double. So essentially I am paying a third of what goes into my pension....

enjoyyourshoes

House _ or Car ?

Owen1991

Do you really need that new shinny car?

I'd just stick to the old one but then again I have an old Corsa that I'm running into the ground because cars don't really do anything for me.

Puddylove

I understand the attraction of a new car, but if you buy it on PCP, the novelty will wear off long before the payments are finished.

Could you perhaps hire the car you are thinking of buying for a week or two, to make sure that you really do want it?

Lokolo

Not really enough information to financially decide. You currently can save £500 a month after PCP. But what is your take home? Do you pay any board for living at home? How much would the PCP be?

Example:

Take home £2k. Board £0. PCP £1000. Saving £500. I would tell you you're being an idiot.

Take home £2k. Board £750. PCP £200. Saving £500. I would say thats OK but it would still be silly not to be saving £700 than £50.

A new car is always great at first, but the novelty wears off. And you have already said you have a nice car!

Money_Or_Cars

Lokolo wrote: »

Not really enough information to financially decide. You currently can save £500 a month after PCP. But what is your take home? Do you pay any board for living at home? How much would the PCP be?

Example:

Take home £2k. Board £0. PCP £1000. Saving £500. I would tell you you're being an idiot.

Take home £2k. Board £750. PCP £200. Saving £500. I would say thats OK but it would still be silly not to be saving £700 than £50.

A new car is always great at first, but the novelty wears off. And you have already said you have a nice car!

My take home after tax and pension is £1800. I pay nothing for living at home, apart from contributing to buying food.

My current HP finance is £350. The PCP deal is £370 per month. The new car is a performance hot hatch which I think I will get a lot of enjoyment from.

I'm on here trying to figure out how to get the right balance of spending on things that make me happy, and saving enough for the future.