car purchasing in retirement

mrklaw

looking at info on what others are doing/plan to do regarding funding car replacement during retirement. We’ll likely drop to one car next year which will need both to be sold as her’s is too small and mine is too big for the other to drive :) so how to finance.

logically we should estimate how long we keep cars for and their purchase price and include that in retirement income. But there are lots of lease deals these days for £200pm or so which seem like a reasonable balance between cost of ownership and running a used car until it dies with increasing maintenance as time goes on. Especially if we don’t have a second car as a fallback that is attractive to us. or even some PCP offers on 0% finance which seems a good way to leave some money in the pension earning interest.

if we were to buy outright, while tempting to use tax free cash, that doesn’t seem sustainable if you want to replace eg every 5 years. Might be better to plan for using UFPLS and pulling an amount out regularly each year into an ISA (to avoid hitting high rate tax).

curious what other people do and how they approach planning for it in retirement

Ayr_Rage

Spend, spend, spend, you cannot take it with you.

67,Toyota GR86 with a wagging tail.

fatbelly

You might be better asking on the motoring board. We have chosen to keep two cars going for the flexibility as we don't do everything together and the two cars have different functions. But each to his own

Woodstok2000

Blow the lot...

https://www.carandclassic.com/car/C2018489

Catflap2

Been leasing for nearly 10 years now, went down to one car during COVID and haven’t gone back to 2. Plan to just keep leasing once fully retired (unless it becomes too expensive and then will see what the other options are at that point). When it’s time to look for a new lease I still check the other options, occasionally there are some very good PCP offers so if that was the cheapest deal at the time then that’s what I would do

leosayer

Do you actually want to replace your car every 5 years?

I've owned one car for 12 years from new (Audi A3) and another (Toyota GR86) for 3 years.

They both cost very little to keep on the road, have been reliable and do everything we could reasonably want.

I worked out recently that the Audi has cost us (in depreciation) around £120 per month.

I'm sure I'll keep the Toyota until I'm not physically able to drive any more and the Audi might get replaced soon because we want a bit more luxury.

Eldi_Dos

" curious what other people do and how they approach planning for it in retirement "

No different from when you were working, plan to pay for it out of income and keep your capital for other use's.

Pipthecat

Planning for my Toyota to out live me.

If I was to buy again it would be for cash unless there was a no brainer finance deal on what I wanted

Roger175

We've always bought outright and run them for as long as we can keep them reliable. We always buy nearly-new to avoid the initial depreciation. Once out of warrantee I do pretty much all the repairs/maintenance - it really makes little difference to the value when selling an older car, especially as I keep a detailed record with copies of all the receipts for the parts and it saves a fortune over the time of ownership.

Even in retirement, we intend following this practice. We actually still run 3 cars, one for me, one for my wife and and old banger for DIY and running to the tip etc - we have a large rural garden and are forever taking messy stuff to the tip. The spare car also doubles up as a courtesy car for when I'm servicing or repairing one of the kids cars (3 adult kids plus their wives/girlfriends) - I do all the maintenance!

Last year we changed mine and my wife's cars for nearly new Skoda's. A Fabia for her and a Superb estate for me - great cars which are more or less the same as the Volkswagen/Audi models, but better value. One of the considerations was that we wanted to get a good petrol model each before we were forced down the EV route.

Albermarle

I had company cars and for the last 15 years of my working life they were all lease cars.

After numerous problems over those years dealing with the different leasing companies, when I retired I bought a car outright to avoid all the hassle. Problems included;

Turning up for a booked service and they had no record that I was booked in; calling the lease company and they could not find me in their system; waiting in the garage for hours whilst they tried to get approval to do some work; long delays in repairing the car after a minor accident due to communication problems between lease company and insurers etc etc

Nebulous2

We tried to get some of the heavy lifting out of the way while still earning, so bought a pre-reg vehicle outright prior to retiring, with the intention of keeping it until at least state pension age.

Then took a part-time job and found our finances were better than expected, so I've just bought another new vehicle outright with a view to retiring again.

In other words - we've adapted our plan to match the circumstances we find ourselves in. Though some unkind people might say we are simply making it up as we go along!