The cost of small cars is no longer small!

James2k

motorguy wrote: »

The subject of the discussion was the price of small cars, however we have meandered away from that.

The point i was making was, that some people seem to want to judge what others do, and spin it in a negative way, whereas (a) the reality might be someone different, and (b) its not really up to us to judge what others do - though some of us seem inclined to for whatever reason

They change their phones - like cars - because they're getting something thats brand new for similar monthly payments as they are used to / have budgeted for -

• its got a manufacturers warranty so no risk of a (relatively) big bill for a failure
• its wear and tear free
• keeping what they have will probably work out similar cost anyway

I like the passive aggressive tone you use, its appreciated. and emoticons definitely cover that up nicely see?

Far be it from me to be judged by you for judging anyone else!

one thing though;

[*]keeping what they have will probably work out similar cost anyway

no, no it wont, not with phones and (unless you get incredible unlucky) not with cars.

motorguy

James2k wrote: »

I like the passive aggressive tone you use, its appreciated.

Far be it from me to be judged by you for judging anyone else!

one thing though;

no, no it wont, not with phones and (unless you get incredible unlucky) not with cars.

I'm not judging, its an observation - some people seem to like judging others.

Well the reality is, people will probably continue on just running the phone they have at the payment they have so it makes sense (in their view) to change to a new one. Yes they could go to a sim only deal and keep what they have but few think to do that.

Back to cars, assuming a PCP deal, then assuming they are paying £300 a month and have a £10K residual, then borrowing £10K is going to cost them similar per month.

Or £200 a month and £5K, etc, etc.

James2k

motorguy wrote: »

Well the reality is, people will probably continue on just running the phone they have at the payment they have so it makes sense (in their view) to change to a new one. Yes they could go to a sim only deal and keep what they have but few think to do that.

well if they do that, then there really isn't much hope in general. I mean, really..

re: your second point:

Then your circumstances change,
oh dear massive excess mileage bill, wonder where we could find evidence of that happening.
oh dear lost job, no value in car most likely, maybe able to return for nothing left at the end of the day, may not and have more debt.
Handing back the car but oh dear there's a scratch they are charging £700 to fix. oh you missed a service by a day, more money please.

and yes borrowing 10k would be similar, but whats wrong with actually, you know, saving up for what you want to buy? I haven't borrowed anything to buy my cars, took finance on the Audi for a couple of grand off and settled the next day. no drama, no strings, my car

ratrace

Cars have always been a status symbol to some form of degree and there is that pressure to keep up so to speak for some, having but that also can be said for other purchases in life

I cant speak for anyone else but if i had £x ammount of money to spend on a car for cash or keep that cash in the shares that i have and just pay monthly for a car that i wanted i would do that and not pay cash in a lump sum, for me paying month by month would be better in that sense

I currently dont have any pcp or hp deals as my astra is paid for and worth 3k, im not be bothered what others choose to do with their money, they are the ones getting up everyday to go earn it as long as they dont come knocking on my door, live and let live i say

there are always going to be for and against arguments about pcp, hp deals but who are we to say who is right or wrong

my sister has a fiat 500 on pcp paying £130 (she earns £2,500) a month for 48 months that is coming to an end in jan in that time she has not spent a penny on as the service was included part of the deal,

once the contract is up she will be getting another new car for upto £150 a month max budget, is it the most money saving way to operate a car, No but it works well for her and she is frugal in other aspects in life so this is a bit of a luxury/want/need, is it for me no but im not going to judge people on how thier live

James2k

an apposite sig you have

motorguy

James2k wrote: »

well if they do that, then there really isn't much hope in general. I mean, really..

You asked why people change their mobile phones and i gave you my view on why - they're paying a monthly amount and for the same monthly amount they can get a brand new phone, under warranty, etc, etc.

Personally, i've a sim only deal and an S8+, but i can see why a contract that includes the phone price appeals, given phones are now £1,000+

James2k wrote: »

re: your second point:

Then your circumstances change,
oh dear massive excess mileage bill, wonder where we could find evidence of that happening.

That persons circumstances changed 2 years ago. They needed to do something about it then.

Again, it happens, but its not prevalent - the titanic sank but it hasnt stopped me using ships.

James2k wrote: »

oh dear lost job, no value in car most likely, maybe able to return for nothing left at the end of the day, may not and have more debt.
Handing back the car but oh dear there's a scratch they are charging £700 to fix. oh you missed a service by a day, more money please.

Why on earth would you hand the car back the day you lose your job?

Maybe you dont have confidence in getting another job, but most people do so within a month or two tops. Simply make the payments until then.

Probably not much of a difference between having to firesale a car bought with cash if your circumstances change.

James2k wrote: »

and yes borrowing 10k would be similar, but whats wrong with actually, you know, saving up for what you want to buy? I haven't borrowed anything to buy my cars, took finance on the Audi for a couple of grand off and settled the next day. no drama, no strings, my car

Absolutely nothing wrong with at all, you know. Just explaining how it can work with people without it having to be (a) to impress the neighbours, (b) having to put them on the edge or beyond in terms of outgoings and (c) having to be a lifelong commitment.

And as i've said, your S5 is depreciating anyway, so whats the harm in someone wrapping that up in a monthly payment? Might cost them a few £s more a month but maybe its worth it to them?

Lets cut to the chase here - lets say you gave £45K for your S5 and lets say its worth £22.5K in 3 years time (assuming 50% depreciation) then you've lost £625 a month?

Hows that different from a monthly payment for one?

Not only that, but you've lost the benefit of the £45,000 in terms of interest you could otherwise have made on it, so theres an opportunity cost involved in buying with cash.

ratrace

James2k wrote: »

an apposite sig you have

There is a lot of truth in that, but i have realized over the years you can talk to people till your blue in the face but they will still do what they want to do

I get where you are coming from and are very debt averse which is a good thing but we can only change our own circumstances and let people be

Might be a time to change the signature lol

James2k

motorguy wrote: »

You asked why people change their mobile phones and i gave you my view on why - they're paying a monthly amount and for the same monthly amount they can get a brand new phone, under warranty, etc, etc.

Personally, i've a sim only deal and an S8+, but i can see why a contract that includes the phone price appeals, given phones are now £1,000+



That persons circumstances changed 2 years ago. They needed to do something about it then.

Again, it happens, but its not prevalent - the titanic sank but it hasnt stopped me using ships.



Why on earth would you hand the car back the day you lose your job?

Maybe you dont have confidence in getting another job, but most people do so within a month or two tops. Simply make the payments until then.

Probably not much of a difference between having to firesale a car bought with cash if your circumstances change.



Absolutely nothing wrong with at all, you know. Just explaining how it can work with people without it having to be (a) to impress the neighbours, (b) having to put them on the edge or beyond in terms of outgoings and (c) having to be a lifelong commitment.

And as i've said, your S5 is depreciating anyway, so whats the harm in someone wrapping that up in a monthly payment? Might cost them a few £s more a month but maybe its worth it to them?

Lets cut to the chase here - lets say you gave £45K for your S5 and lets say its worth £22.5K in 3 years time (assuming 50% depreciation) then you've lost £625 a month?

Hows that different from a monthly payment for one?

Not only that, but you've lost the benefit of the £45,000 in terms of interest you could otherwise have made on it, so theres an opportunity cost involved in buying with cash.

Ok, i'm not going to go into each and every single little thing you put, but basically, buying a new car every three years means you are spending a lot of money, whether you own it or borrow it. i'm more of the opinion id like to buy a nice car and keep it for longer than that, hence why i bought it. is there a time and place for finance? of course, but there's also one for buying outright.

Lets be honest, most people in an average job with an average salary could get finance on some ridiculous car that they could never afford to actually own.is this a good thing? well who knows. if you can get genuine interest free finance, and save nothing on the sticker price buy paying cash, then why not? good sense, depending on circumstances.

like it or not, plenty of people need to be seen with the latest iPhone, car registration (regardless of what its attached to, ironically enough) or other accessory. This is life. How many 17-22 year olds post on this very forum asking how to get finance for that new shiny car?

And in life, people lose their jobs. You seem to think 'most' people get another within 1 or 2 months, well i'd like a source on that, you are a regular here, you have seen the multitude of threads about not being able to afford the car anymore, or having issues handing it back, or other things SOLELY related to the fact that they didn't buy something within their means. I could (touch wood) lose my job tomorrow, and i wouldn't have the pressure of the car draining my account every single month to add to the worry of what would already be a worrying time. Oh but its ok, because Motorface said i would get a new job in two months tops, it'll be fine kids!

You asked why people change their mobile phones and i gave you my view on why - they're paying a monthly amount and for the same monthly amount they can get a brand new phone, under warranty, etc, etc.

Personally, i've a sim only deal and an S8+, but i can see why a contract that includes the phone price appeals, given phones are now £1,000+

Except its not the same monthly amount, its more, because as you say, 'phones are over £1000', yes some are, which most people don't need (and cant really afford), but they need to look like they can so they pay their £80 a month instead of keeping that iphone 7S the obsolete junk that it is and paying £10/15pm

James2k

ratrace wrote: »

There is a lot of truth in that, but i have realized over the years you can talk to people till your blue in the face but they will still do what they want to do

very true man, very true.

motorguy

James2k wrote: »

Ok, i'm not going to go into each and every single little thing you put, but basically, buying a new car every three years means you are spending a lot of money, whether you own it or borrow it. i'm more of the opinion id like to buy a nice car and keep it for longer than that, hence why i bought it. is there a time and place for finance? of course, but there's also one for buying outright.

Agreed. Wholly a place for buying outright, that doesnt make finance wrong though if someone choses to do so.

James2k wrote: »

Lets be honest, most people in an average job with an average salary could get finance on some ridiculous car that they could never afford to actually own.is this a good thing? well who knows. if you can get genuine interest free finance, and save nothing on the sticker price buy paying cash, then why not? good sense, depending on circumstances.

Agreed.

James2k wrote: »

like it or not, plenty of people need to be seen with the latest iPhone, car registration (regardless of what its attached to, ironically enough) or other accessory. This is life. How many 17-22 year olds post on this very forum asking how to get finance for that new shiny car?

I dont think theres as many as you think, given theres something like 3 million new car registrations a year, but 38 million cars on our roads. How many of that 7% or so are doing so because they are scheduled to do so, how many are doing so because they want the latest shiny car? With the vast bulk of new cars being humdrum cooking models, whats to be achieved by trading in a 2017 for a latest model 2018 model? Very little, and i would have thought very few do it. Likewise you would be financially blowing your brains out to do so, to the point of it being nigh on impossible via finance.

James2k wrote: »

And in life, people lose their jobs. You seem to think 'most' people get another within 1 or 2 months, well i'd like a source on that, you are a regular here, you have seen the multitude of threads about not being able to afford the car anymore, or having issues handing it back, or other things SOLELY related to the fact that they didn't buy something within their means. I could (touch wood) lose my job tomorrow, and i wouldn't have the pressure of the car draining my account every single month to add to the worry of what would already be a worrying time. Oh but its ok, because Motorface said i would get a new job in two months tops, it'll be fine kids!

Unemployment rates are extremely low. Even faced with waiting for that right job to come along, i think most people will take a temp job to keep themselves ticking over.

Theres just 4% unemployment across the UK. Once you factor in the dole heads and unemployable dolts, you're probably looking at nearer to 2% which is pretty much full employment.

I would say - almost without doubt - you could have a job by monday if you really put your mind to it. Your typical call centre is usually crying out for people and recruit weekly. The place my wife manages needs to take on around 50-60 people per month and rarely hit that. Often they have to turn work away because they cant get the staff.

Would it pay the bills for you or me long term? No. Would it keep anyone ticking over until they get the job they want? Yes, absolutely.

Likewise your catastrophic failure scenario relies on (a) people not having ANY savings and (b) people not having ANY other income coming in to the house - most households are two income.

So no, the odds of people losing their job AND hitting financial disaster are fairly slim.

It does happen, but not at anywhere near a sizeable amount.

James2k wrote: »

Except its not the same monthly amount, its more, because as you say, 'phones are over £1000', yes some are, which most people don't need (and cant really afford), but they need to look like they can so they pay their £80 a month instead of keeping that iphone 7S the obsolete junk that it is and paying £10/15pm

Agreed - i've an S8+ that i plan on keeping indefinitely. My last "weapon of choice" was an agey Note 4.... BUT people budget £X per month and it suits them to pay it. Maybe at some point they'll realise theres better things to spend the money on.... BUT - not for me to judge