How do people afford new cars?

If you need a contact of where to scratch that itch let me know Ron ... Found a very knowledgable independent.
 
And don't forget Ron, the Porker is a lot more comfortable to drive in than a Z4. Mrs PVR found the M way too hard, but loves the Porsche as even with the 20" wheels, it absorbs the UK potholes beautifully without losing any teeth :D
 
I can vouch for that too PVR, the Boxster and Cayman are sooooo different to the Z4, no crashing over potholes or having to avoid anything in the road, including pedestrians 8)
 
I do loans but with a caveat. I use my work car allowance to pay for them. I've been building up equity nicely in the last 7 or 8 years doing that. Started off with £1k down and probably got £18k in both cars now and they are both fully paid for. I do as Zermatt does - I scan depreciation rates like a hawk and my next choice of car will be a very low depreciator. That way the equity keeps on rising. I reckon in another 10 years I'll have £70k equity in the cars and none of it will have come from my salary.
 
interesting discussion. i largely agree with most things said - i think afford is definitely subjective.

If you take a very simple approach, i can afford something very silly via finance, but if anything happened id be in a world of struggle..

I have often had this whole convo with other petrolheads .. i never understand how families can afford a brand new mondeo or similar. i cant, and i have no dependents and and no mortgage.

I always come to the assumption finance is involved for 90% of car purchases.

Personally i have the opinion that i should go all out whilst im young, in 40 years time ill just be wishing id had the money when i was younger.. and used it. As long as you can afford the risk of finance then i guess its ok, it's just that a lot of people cant (and dont know they cant), and the industry designs products to fool people into thinking they can.

I go for a mix of large deposit (minimum 50%) and a loan on the rest, where the payment is a small percentage of monthly disposable income. Interested to hear why personal loan is worse than pcp. my maths showed the opposite.
 
Oakleyextreme said:
It must be nice having a new car, but I've just bought a 2 year old zed with only 4000 miles ( so it's like new ) and saved myself just over £18000 on a new car, that's a hole new car saving lol.
Click to expand...

Quite agree with that one. Recently bought a 13 plate Fiesta and saved about £6k and it was only six months old. Would look at nearly new every time.
 
inkey$ said:
Seriously. I'm looking to replace my 13 year old Golf and new car deals for a similar vehicle are after large deposit, around the £300 a month mark but you dont really own it and are limited to the mileage dictated. Most finance deals on new cars offer interest rates higher than my bank can so why dont more people take out loans?

Not sure I understand the thought process for buying a new car or accept that level of commitment. For a decent family car £300-400 a month to 'rent' something thats going to depreciate like a stone seems excessive; even with included warranties etc. Am sure my 13 year old golf will be worth peanuts as a part ex too.

Maybe thats why I've always bought outright/secondhand after saving up. Am I being an emotional fool for wanting to actually own a car? Have I missed something?

Apologies for the train of thought. Looked at new car deals, second hand car deals, bank loans and finance deals. Confused but still need a car and cant get my head around it all!
Click to expand...

I'm sure someone will have said this, but the cost of a PCH "hire"/"balloon" payment over three years, normally costs the same as a five year cheap bank loan. Which is kind of the same as financing the balloon payment left after three years anyway.
It's not voodoo, just maths :)

But yes, new cars are expensive. Especially golfs!
That's why most modest families don't have brand new golfs on their drive.

Most people I know have second hand cars. But having said that my last three cars were shiny new minis 8)

Have you looked at a five door polo? My folks have just bought a new one and I was surprised with the size, spec and cost. I actually said why would anyone buy a golf?
 
nick&sandra said:
Hi

People rent houses .. people pay £300 per month for top golf club membership, people pay £500 per month for top boat moorings

so ..... why not rent a car and use PCP to your advantage

all the best

Nick
Click to expand...

I'm applauding you!

I don't get the negative loan talk on here? Lots of old Skool (post war) thinking perhaps.

It's up to the individual, I've had car loans for maybe 12 years and I love the fact my list of cars is (IMHO) pretty epic.
I won't bore you, but let's just say I have my own cabinet at the DVLA.

On the flip side I don't go to Majorca/Bali/cruise every year, I chose to spend my disposable income on cars. But then this is a car forum....
 
I guess for me I dont want to get stuck in the vicious circle of renting - whether it be a house, car, holiday or whatever. By always buying outright and owning it allows me to then rebuild my capital for the next big purchase allowing you to upgrade.

If you take a house a prime example. I purchased my house in 2012 for 240k. Its now worth about 330k without any work done to it (and thats in an uninhabitable state). I am adding 120k worth of extension / renovation to it and once its done I will be able to sell it off as maisonettes for about 600k (if I want to) or take a return of around 3k a month (10%). Either way its cash in my hand and the ability to upgrade in the future.

However I see the point with cars - They will always depreciate. But all loans cost more than buying outright (unless they are 0% which almost never happens) so if you can afford it why would you?
 
Yes of course!
Renting is dead money, amen!

But 90% of the population have to finance a car in one shape or another
It's unusual to have £40 for a Z4 knocking around
 
bluestreak56 said:
I guess for me I dont want to get stuck in the vicious circle of renting - whether it be a house, car, holiday or whatever. By always buying outright and owning it allows me to then rebuild my capital for the next big purchase allowing you to upgrade.

If you take a house a prime example. I purchased my house in 2012 for 240k. Its now worth about 330k without any work done to it (and thats in an uninhabitable state). I am adding 120k worth of extension / renovation to it and once its done I will be able to sell it off as maisonettes for about 600k (if I want to) or take a return of around 3k a month (10%). Either way its cash in my hand and the ability to upgrade in the future.

However I see the point with cars - They will always depreciate. But all loans cost more than buying outright (unless they are 0% which almost never happens) so if you can afford it why would you?
Click to expand...


Hear Hear, it is all about choice, you earn it so you choose how to spend it. Only thing I don't agree with is comparing cars and houses as one generally increases in value whereas the other decreases.
 
You must log in or register to reply here.
Back
Top Bottom