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From accumulation to de-accumulation?
Comments
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The tipping point for me to lease rather than own was when my out of warranty 2013 Audi Quattro Coupe developed an engine management fault that cost an eyewatering amount to resolve.
At that point, the prospect of buying a more sophiscated newer car with even more complex gadgetry/ running gear to go wrong once the warranty expired was simply unacceptable. The Audi had been a faithful relatively trouble-free car right up until the point it wasn't.
A friend of mine is currently facing the same quandrary. In the last year his previously trouble free 2015 low mileage Volvo V40 has racked up £3,600 in unexpected repairs and problem diagnosis costs.
He had intially considered buying a full hybrid car similar to my own leased vehicle, on a 3-4 year PCP contract. However after some consideration, he too realised he did not want to own such a complex vehicle once the manufacturer's warranty expires. After doing some number crunching he is now looking at a standard 3 year lease of a full hybrid Nissan or Renault.
Finally, and just to labour point a little, my sister in law has expressed deep regret in laying out £4,000 this year to resolve a critical chassis failure on her low mileage 15 year old BMW X1 diesel. She now feels forced to hang onto it far longer, just to get some benefit from her expenditure, but as I pointed out she is now a hostage to fortune to any new faults that could develop in the meantime.
For me there is a certain comfort / freedom in driving cars perpetually within warranty, for which I have zero responsibility should they develop faults during the lease period.
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And take 3 weeks travelling along the coast of Spain and Portugal or the Pyrenees and along the Cotes D'Azure and into the Alpes Maritime retiring through the Eiffel and a short dash back into Calais.
After all the new bike needs to be run in😎
If that seems too long or too far and you prefer shorter routes get a copy of the bike coffee passport:
There's loads of brilliant UK roads and going mid-week avoids a lot of the negative attention that weekend riders seem to attract.
Your life is too short to be unhappy 5 days a week in exchange for 2 days of freedom!
One can always make more money. No one who has ever lived can create more time.1 -
My wife and I bought a new Audi A3 in 2014 and have always extended the Audi warranty at a cost of around £350 per year.
In total it has paid for a new heated door mirror glass and window motor regulator so it hasn't given us much value except for piece of mind should the complex engine and autobox go wrong.
We also own a Toyota that remains under warranty for up to 10 years as long as Toyota service it.
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Such extended warranties are a wise investment, especially in the case of Audis.
However, having decided I wanted a brand new car every three years, such warranties became of academic interest to me.
I am enjoying the ever changing array of gadgetry each generation of new cars are endowed with (360° cameras, Google sat navigation and app integration, radar controlled automous cruise control, phone app car status viewing, etc ). All features I never had on the Audi, but now non negotiable for any future leased car.
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It must be something most people grapple with. At 57 (me) and 54 (wife), we have just gone from a joint income of £120k to my part time wage of £40k. She is managing using 12 months net pay taking VR. When I retire next year we'll have a gross of £50k a year for life using bridging pensions. When you factor in all those pension contributions, NI, additional fuel for work etc, a lot of your monthly spend vanishes.
My have spent a lot on the house over the past three years but the watch out is some of the spending that creeps in when you have more time. We recently got a new car, big TV and I have my eye on a pricey coffee machine. So I am sure we will be fine (with capital as back up) but I have to keep reminding my wife that we have won the game. It also doesn't have to mean that you can't pick up some paid work if you get bored/the itch but nice to live life on your own terms. The scary thing (for me) is that it reminds you of your own mortality and that you are on the down slope! I work with plenty of people in similar (or 'better') positions, who are clearly programmed to work full time to state pension age. Ewww!
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The scary thing (for me) is that it reminds you of your own mortality and that you are on the down slope!
The down slope! at late 50s!?
You haven't got going yet. OH & I are both over 70, and we don't expect / want to slope down for at least another 10 years.
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I guess it depends if you are a glass half full, or half empty type of person.
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With 4 major back surgeries (starting at 18) and a pretty full life at 57, I am happy with my 10,000 steps a day with my pooch. It's all relative, I want peace and not craving grand adventures, I've done plenty of those. Definitely an optimistic, happy and grateful person but I won't be hiking up mountains in my 70's+….by downslope I meant 40 years of work behind me and I don't think I'll make 114, although my dad is 90 and mum 85, so must have decent genes. I intend to enjoy my freedom from the tie of work and loving my 4 day weekends. My OH already wonders how she had time to log on.
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A reasonable planning assumption is you'll be fit and healthy to age 75 (adjust if parents died young or were long-lived) and will therefore be able to enjoy spending on holidays, travel, going out etc. After that, issues with mobility etc. reduce need for discretionary money and you just need to cover basics of home maintainance, heating, eating, cleaners etc. and likely won't need car as it'll be net cheaper to get a taxi when needed.
Model your money requirements year on year accordingly.
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From personal experience, for many people these days 75 is much too young an age to assume you will stop travelling or enjoying meals out etc. Furthermore with increased age you may want greater comfort possibly with business class long haul flights etc. Travel insurance becomes rather expensive.
Then you may have added expense paying for people to do tasks you cannot manage yourself. Perhaps mid 80s would be a better choice, though I may change my mind when I get there.
My retirement plan assumed constant inflation linked expenditure until death at a seriously old age.
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