The car ladder?

gzoom

@adamjpl I get the whole car buying addiction, and looking at your situation, under 30, own property, and have ISA investments whilst running a M2, I would guess your income is far far above that of an 'average' 20 something old, intact your income is probably far above that of many 40 something olds.

In your shoes I really wouldn't worry about buying or leasing, both ways ways cost money because new cars cost money regardless how you fund them.

Your biggest headache is actually what you are going to replace the M2 with when you get bored. The natural choice is something like a M5 at which point you are talking about some really big spends. However you are very close to the top of the ladder, so actually long term ownership should be considered. Anything that's considerably better than a M5 and you are looking at proper supercar money, which your projected income when you're 30+ may or may not support.

I've always used cars as a way to motivate myself to progress my career and increase my income, as that is the only real way to get into a nice brand new car. My current new aspiration is own a Taycan before I hit 50, that's over a decade away, but when you have family + house renovations to do cars take a back burner.

So why not work backwards, think what car you want to own when you're 30, and work out a plan of how you are going to afford it!!  In your shoes you should be aiming for a cash purchase as you clearly have the income to support it.

Good luck, it's a nice problem to have in the current financial world where 1/4 of people are been paid by the government.

fred246

I used to work with young people who were earning good salaries. It does seem to be quite a common way of organizing your finances now. You have a series of monthly contracts and as long as the sum of them all is less than your monthly income you are happy. You don't save money but you don't really need a cash reserve because everything is taken care of. Problem with your house - phone the landlord. Problem with your car - under warranty. Problem with your phone - it's insured. I remember saying buy a car. "No we can't afford repairs". "We have to have a brand new car under warranty". It sort of works but it's not good for your long term finances.

[Deleted User]

I wonder at what age this thought process goes on until 😯🤨
All i see there is all that hard earned money going to other people and not me 😥

fred246

I remember someone telling me they couldn't afford an older car because they had no money for repairs. It's hard getting your head round the concept of poor people have to have new cars. Rich people can afford old.

AdrianC

fred246 said:

I remember someone telling me they couldn't afford an older car because they had no money for repairs.

Perhaps it's because people have swallowed the guff about all garages being scammers who only exist to rinse people at every opportunity?

Perhaps that's why people have bought into the "£600/mo is cheaper" stupidity.

I mean, anybody can maintain something like a modern M2 on their driveway via YouTube. Nowt to it, right?

WaywardDriver

Like someone else said, I think you need to check your maths. Not that familiar with leasing costs but I calculate the PCP monthly payments to be £730 based on 4% over 24 months and 40% depreciation. 
In an idle moment, I once compared a £k30 middle-of-the-road SUV with a Porsche Macan at £k50. Due to considerably lower depreciation, the monthly payments for the latter weren't that much more. But then I looked at Porsche user forums and discovered that most added between £k10-15 on extras which weren't reflected in the residual value. A quick look at the options for your £k50 M2 suggests something similar.

daveyjp

If you are a petrol head with expensive tastes two options.

Have an income which means running expensive cars doesn't dent your bank balance.
Run a business involving petrol head vehicles so you can play with them.

Jonesya

fred246 said:

You have a series of monthly contracts and as long as the sum of them all is less than your monthly income you are happy. You don't save money but you don't really need a cash reserve because everything is taken care of. Problem with your house - phone the landlord. Problem with your car - under warranty. Problem with your phone - it's insured. 

Yes but it's a very hand-to-mouth existence with all those fixed monthly out-goings and leaves people in a vulnerable situation if they lose their job and their income stops. At that point you need assets and savings to fall back on, all you've got is a load of fixed out-goings and zero assets.

Scrapit

Whats the problem if you can afford it? 

adamjpl

There seems to be quite a lot of people summising that all I have are monthly outgoings built on contracts. I'd like to clear this up for the ones that can't either read or read between the lines in the first post. I have one depreciating asset contract if you like which is my car. I have had this for the last 3-4 years now and have continued to grow my wealth. I do 8-10k miles/year I would say half of this is travelling to and from work with the other half me taking the car on journeys down south whenever I want. My question to the forum was what's the best way to continue to do this if my ultimate goal is to continue to jump into better and better cars. My question was not should I be spending 459/month + 190 a month saving for a new car every couple years (which I have budgeted for). My question was what's the best way to continue doing this, should I get a loan and do it that way or should I continue to lease/look at PCP. Although I am 26 I work hard and I do this for enjoyment you might disagree with that but I might disagree with some people spending £5k on a holiday to X destination every year that you can't enjoy for anymore than the time you are there. I am lucky with my situation I have a job that is a part of an essential service, makes me a decent amount of money and with my active trading and investing allows me to live very comfortably. If you cannot contribute to this in a productive manner then don't contribute at all. I know that might be hard for some of you but I urge you to pass this thread if you wish to lecture me on how much I spend on my car thanks.