[Closed] Car buying financial perspective required please!

Was there a question in there somewhere?

Yep! What's a reasonable amount percentage wise (of income) to splurge on a car? There must be some sort of "rule" or something?!

First up assuming you owe nothing on the current motor , Start now sticking your anticipated finance payment away now.... See if you can actualy live without the extra money ( ie afford it without it being a millstone round your neck )

Then realise that you dont "need" the sports model - many on here will tel you the "vrs/cupra/turbo" is the only model of x car to have - its not cost , fuel , insurance and repairs will be less on the lower models.

Are there any tax drawbacks on your works leases ?

I recently went through this with wanting a bigger van (had to change car anyway) , went round the doors testing cars and realised that it was not a necessity and that for all the miles we do and types of road we drive a 10year old berlingo was still the smart money.- 1/4 the price of a deposit on a big van without the 250 payment everymonth for the next 4 years.

Im stil at the stage where id rather stick that into my mortgage than drive a new car.

How ever i do think that will change if little t-r ever comes along. Cant imagine mrs t-r being chuffed if ours bangers broke down and she was with kid.....although i do my own maintainance and bar the odd failed battery fingers crossed we have been fairly good for keeping on top of imminant failures.

Good advice from Trail Rat there - but why not put the monthly payment away for a while, then see what your savings would buy you outright?

Something like a five or six-year-old Ford would be pleasant, reliable and economical to run.

No need to keep up with the Joneses when you can drag the neighbourhood down instead.

Well my current car is on HP but at mid term so I can hand it back without penalty. I can get many decent cars on the work lease deal for what I'm paying now in total for HP/Insurance/maintenance but obviously I won't own it (although there is an option to buy after 3 yrs).

I could for example get a passant or mondeo for £350 a month all in which seems a bargain given my insurance alone is £75 a month at the moment. I am also considering the banger route (although it means I'll cry when returning my current 6yr old car) but like you say reliability is quite important with sproglet on board!

Spend what you can afford to and what you reasonably want to. There's no right or wrong answer. My wife and I pool our car allowances for something nice, but something cheap would do 80% of what we have but be less fun to drive. If your priority is a cheap car with no hassle, go for a lease or PCP as you'll keep it only as long as the warrant lasts. If money is more of a concern, go for a car that's just come out of a PCP as there is a lot of stock of three year old cars that get handed back to be replaced with new.

Haha cha****ng do you know me ?

- the guy with the collection of old van based vehicles or as im known on the street.... The guy with half a land rover in his drive.

Dragging the neighbourhood down since 2012 🙂

.. But as I'm currently paying HP and we only have the one car I don't have the luxury of just saving some pennies (which arguably would be a sensible idea) hmmm

As a rule in our house, have a think/decide what you can afford, then half it. Oh, and get a red one. No, a blue one.

.. Im suffering "requirements creep" in that a normal family car is reasonable but there are some shiny mercs/Bimmers for not a whole lot more. I've just lost track of what's sensible to spend tbh!

What are you driving thats 900 a year to insure ? Assuming your older than 25 of course.

Our total insurance bill isnt that on a car and a van with mrs t-r having a currently at fault claim on here record and zero ncb . Age 28

350 quid a month is alot of money to rent a mondeo.

^ 3 series coupe but have been driving for only 2 yes

The lease schemes require no deposit I should add

Haha cha****ng do you know me ?

I was thinking of my own front drive tbh, everyone else in the road seems to have BMWs, Jags and Mercs, we've got a Fiesta and a van.

Your mileage is very low. That means your insurance could be on a declared mileage and that could help keep the premium down. That low mileage also keeps the maintenance down - less wear and tear etc.

350 a month could be worth it if you were doing lots of miles. Do you need more than a Mondeo estate with 40k on the clock? Do some proper sums rather than getting drawn into shiny shiny. Kids cost more than cars.

Just seen you drive a 3 series with only 2 years of driving.

You're a dad. Hand the shiny toys back and stop thinking like a teenager. Cars like that are not a status symbol with a kid seat in the back and jammy smears on the window. Also - do some proper car ownership sums rather than accepting the 'all in' HP price from work.

^ hmm current car isn't a status symbol, I just like it! Tbh when I got the car I was doing quite a lot more miles hence that helped to justify it!

I guess we probably don't need anything more than an 8yr old focus but I'm not sure at what point cheap becomes too cheap.

I was doing quite a lot more miles hence that helped to justify it!

There isn't a mileage that means '3 series coupe'.

Most modern cars will comfortably do 100k miles. If you bought a Focus with 40k on the clock, it would take you 10 years to take it to 100k and it wouldn't cost that much in maintenance over that time.

I sat down last year and looked at how much I spent, on a monthly basis, on depreciation and maintenance fixing, taxing, rac'ing and MOT'ing 'average' age cars (5-10 year old) over the past few years

truth was, it actually tipped me into the balance of buying a brand new car, for about thirty quid a month more I've now got five years (ie. warranty) of not worrying about breaking down or unexpected bills, totally worth it for the reduced stress levels in my house.

TooTall - nope, the milage justified the newish car aspect. The lack of sprog at the time helped justify the coupe bit! 😀

Ninfan - this is why the work lease is tempting as it's 3 yrs of no stress followed by the option to buy a well maintained car that I know the history of, at a reasonable price (apparently)..

the stress of worrying about denting/scratching/mileage would do my head in.

Look at it this way - you can buy a brand new Fabia estate or Roomster for a little over 10k including the 5 year warranty, thats works out (if you finance it yourself) £170 quid a month plus about £15 a month fully covers servicing and tyres etc. contract, - may not be fancy but it does the job perfectly, and you own the car at the end of it

of course, if you're more worried about status symbols and making your willy look big, you can always spend a lot more money or have a bigger car - but you've got a kid now, you've proved that works 😀

a bit depends on your age and how much insurance costs you of course, I'll admit that could make an inclusive lease attractive (would you still develop no claims for the future that way?)

£350 a month seems like a hell of a lot of money to drive a Mondeo or Passat estate to me! £4.2k a year.

You should be able to pick up a sensible petrol car for £2-3k and put aside £500 a year if you know a bit about cars. If you get an old diesel, put away a grand as a float on top of that for when the clutch and flywheel goes.

Often the fastest model you can get is the cheapest to run as a second hand car. The bits can be more expensive if they're dramatically different to the standard car (ie, BMW M cars), but often the fastest model is just a common engine from a bigger model or the turbo boost cranked up a bit. The good thing is that the faster and more desirable models in the range really hang onto their value, so if you go out and buy something like a MK5 or 6 Golf GTI now, in a few years it'll still be a GTI and you can flog it on as a low mileage car...

I'm not saying that you can get a nice Golf GTI for £3k though. Unless you want a MK2! £3K will easily get you a SAAB Aero estate or a 3 series estate.

Very interesting

makes me feel better about life

I thought my Scenic had been a total Lemon (it has)

cost £6500

3 years insurance £750

But we have spent a fortune on it. New turbo and exhaust gas thing. Water pump and cam belt. Those 3 alone were over £2000

Maybe another £1000 on servicing

But we've done £50,000 miles and the total is still less than 36 x £350

So if blows up tomorrow we are just behind you

But if its still running in 3 years then my cost per year could be way lower

So I think a used smaller car would have to be alot less over 3 years

ampthill you've not allowed for depreciation in your numbers there....

Buy a £1-1.5k car that doesn't depreciate (i.e. about 12 years old). Older cars' lower MPG doesn't matter so much with low mileage.

Get Autoaid breakdown cover at about £35 a year for both of you.
Car breaks down, you/wife/kid get home. New cars break down too.

Even if the car had a catastrophic engine failure and wasn't worth fixing, you could buy 3 in a year and still come out ahead £££s wise. Smaller repairs will be cheaper - scrappies or eBay for parts.

Steve I have. I assumed my car is now worth nothing

Just going through this myself. Part of me wants to run a banger for the cost, part of me wants to have a modern car for piece of mind.

I just checked how much a rental car would cost in the event of a banger breaking down, you can get a basic car hire for £90 a week. Add in an autoaid assistance package for £40, and that is a cheap way to get piece of mind.

What is the depreciation on a 350 quid a month lease car ?

Well its 350 x number of months owner + damage repairs.- its pretty hard not to come out on top when your playing against that as long as your not trying to play flash/fast car willie waving. They all go the same speed stuck in the traffic 😉

When was the last time folks had a complete failure of the car that made it undrivable ?

My last car even drove back to my mates garage in convoy with one wheel pointing to the shops and te other coming back with the change.......it had been rammed into a bus.

How ever if your idea of car maintainance is putting fuel in and turning the radio up ( like my mrs) then i dont suggest bangernomics.

Im stil at the stage where id rather stick that into my mortgage than drive a new car.

Instead of looking at what car you can afford, work out how much sooner you'll own your house (assuming you've got a mortgage) if you just got a cheap 2nd hand car and pay off an extra £100-£200 a month. Mortgage rates will never be this low for a long time (I think).

I sat down last year and looked at how much I spent, on a monthly basis, on depreciation and maintenance fixing, taxing, rac'ing and MOT'ing 'average' age cars (5-10 year old) over the past few years

truth was, it actually tipped me into the balance of buying a brand new car, for about thirty quid a month more

Really? I'd love to see the figures which show that, given the new cars you mention are costing you well over £100 a month in depreciation.

I'm still amazed how much money people are willing to piss away on a box to transport them around which isn't actually all that exciting to use, given all the other things you could be spending a thousand or two a year on. Including purchase cost and replacing the DMF I've spent far less over the last two years in owning my car than two years of the lease RRR mentions (that's all in, including servicing, MOT etc.) and I still own a 6yo Mondeo.

I'm well past the age and years that require a new sport GTI model -- many years past that, had what seemed like the oldest car in town let alone street for ages... mileage around 6k / year which helps..

Even now have something for under £10k, hopefully low maintenance usually, happy position of buying outright and low insurance as well - NFU Mutual... the HP / lease deals tip you towards buying something fancier IMO and also load it up so that they assume you'll trash it in the 3/4 year run of the plan..

given the new cars you mention are costing you well over £100 a month in depreciation.

Yeah, but all the second hand cars I'd had showed a not dissimilar similar figure when you added up depreciation, repairs, RAC membership, servicing, MOT's, fuel economy, etc.

I'd not had a car that cost me less than a grand a year with everything taken into account properly, and a couple that were a lot more.

just to add having had a quick look - over the years an abs ring here, a DMF there, a seized brake caliper somewhere else, a new battery, a slave clutch cylinder somewhere down the line etc... all ads up!

It does, but depreciation on a new car still dwarfs that, and you still have to pay for servicing on a new car (not cheap if you want to keep the warranty - servicing is actually rather cheaper on something older). Maybe you've just been unlucky though, as I don't think I've ever spent huge amounts on repairing older cars.

I'd love to see the figures showing that the new car cost less as i reall don't believe it

A quick look at the per mile cost at the back of a car mag will give you a hint

Well if you can currently afford to spend £350 per month, then why not spend that much again?

A cheap car isn't going to be as safe or nice compared to a £350 per month car.

I went from a £4k paid for 54 plate Mondeo to a brand new BMW 320d touring on lease for £340 all in.

Not once have I regretted the decision, as I can afford £340 per month. The cars themselves do not even compare.

There is no % of income that says what you can afford. Some people like to spend 0% of total income, others happy to spend over 50%.

"A cheap car isn't going to be as safe"

Interesting assumption , but if that how you talked your self into a new car fair enough.

Im not sure the sums would add up if you have to use a garage for every little thing needing doing.

Mines goes in for timing belt and clutches , almost everything else i do at home.

Home service is 40 quid for my car using premium filters and oil.

My colleague stuck his 02 325 coupe in to the garage for a service and was lightened 180 quid- fluids filters and labour.

So, mini RRR undoubtedly will force our changing cars at some point in the near future it seems

As for lease cars theyre only yours for as long as you have a job with the company, loose the job via redundancy or sack and youve lost the car,perks like that may also be withdrawn at any time if you look at the terms of the lease.

RopeyReignRider - Member
Well my current car is on HP but at mid term so I can hand it back without penalty. I can get many decent cars on the work lease deal for what I'm paying now in total for HP/Insurance/maintenance but obviously I won't own it (although there is an option to buy after 3 yrs).

I could for example get a passant or mondeo for £350 a month all in which seems a bargain given my insurance alone is £75 a month at the moment. I am also considering the banger route (although it means I'll cry when returning my current 6yr old car) but like you say reliability is quite important with sproglet on board!

As your insurance is so high @ £900 a year, £350 a month for a passat/mondeo is absolute robbery! 😯 If I was in this position i'd simply buy an 2004-2007 mondeo with that £4200 you'd spend in the first year alone. Then enyoy having £350 in my bank every month in years 2 onwards!

I recently got very tempted by something shiny, lots of choice around £12,000, thought I could stick it on the 0% credit card (and play the balance transfer tart game) or low interest loan and it would have cost me about £200-£220 a month for 5 years.

I looked at the fact my current £5k 2004 car is paid off, passes its MOTS, good on fuel, and decided the £200 a month would be better invested in paying the mortgage off, doing up the house etc Stuff that I can really appriciate long term as opposed to a shiny "keep up with the jones" mantlepiece on the kerb outside.

Also current car doesnt leave me distraught if I find a new stone chip or scratch, were I paying £200 a month for a car, let alone £350 i'd be devastated if some loon clipped it or dented the door in carpark.

So in summary the most i'd want to spend a month on a car is around £100 tops, which is how I bought my current car, on 0% credit card offers. £4200 a year is simply insane.

Do you have any savings?

If you do then a £3K - £4K six or seven year old car would be pretty safe and reliable and you'll have no outgoings on it. It would be all yours with no worries about redundancy etc and you'd only have to service it and put fuel into it.

I have a ten year old car and MrsJulianA has a thirteen year old car and we have no worries about safety or reliability. The older one has a few niggles but nothing that £200 wouldn't put right (one door lock that doesn't participate in the central locking).

Audi A4 and Skoda Octavia respectively. Other makes are available, apparently!

Sorry if I've misread the original post and not answered appropriately.

Edit: £350 per month? Covers my petrol bill for 1200 miles to work per month in a 3.0 litre, so you should be quids in!

Those leases sound pricey. I run a 6 yr old merc clk (had it for 2 yrs) on about 2.5k per annum. Prior to that a it was a 5yr old Porsche Boxster S for about 3.5k, buying and selling in one year always hurts!

Seriously 4.2k for a Mondeo or similar is just madness.

Usually with car buying - and as neatly demonstrated by the responses in this thread - people take a position and then seek to justify it. So, new or second hand is basically pre-decided.

But the OP's question was about what percentage of income to spend. I can't give you a number, but when we were paying for two cars, I think we were about 10% of net income. One of the cars was on HP, so is now paid for and that's left the other (PCP) at about 5% of net income (not incl final balloon payment).

TBH I'd like a new, bigger car made in Gernany or Japan, but the rest of my commitments and the other ways we save and spend money means I don't feel brave enough to go for such a thing. And we're going to spend money on our house next year, so I'd rather pay it towards the mortgage and wait for a payrise to cover the cost of new car payments.

A cheap car isn't going to be as safe or nice compared to a £350 per month car.

Given one of the £350 a month options was a Mondeo, I suspect my 08 Mondeo (current model apart from a facelift) is just as safe. Nice? Well I suppose it depends on what value you put on a new car smell.

Usually with car buying - and as neatly demonstrated by the responses in this thread - people take a position and then seek to justify it. So, new or second hand is basically pre-decided.

Chicken, egg? Am I attempting to justify my choice of s/h by pointing out it's significantly cheaper, or is my position s/h because it's significantly cheaper? Or am I simply justifying the reason for wanting to spend less money on a car (because as pointed out above, people seem happy to piss away silly amount of money on cars, when they could have far more fun spending it on other things)?

Funkydunc - out of interest where did you get your lease deal? I thought my work's offerings were good value but perhaps they're not?!

Usually with car buying - and as neatly demonstrated by the responses in this thread - people take a position and then seek to justify it. So, new or second hand is basically pre-decided.

Demonstrated best by the OP, to be fair.

😀

^ hmmm

Not really, I am open to the idea of not getting shiny shiny hence asking what's a reasonable amount to spend. I'm well aware that my own thoughts probably aren't those most logical hence asking for perspective!

Even if you haven't got savings you should be able to get a loan for a cheaper car if you can get a £350 lease or hp deal, thus making the idea of a £5K car viable.

RopeyReignRider - Member
^ hmmm

Not really, I am open to the idea of not getting shiny shiny hence asking what's a reasonable amount to spend. I'm well aware that my own thoughts probably aren't those most logical hence asking for perspective!

Do you not think £4200 a year is money down the drain and wasteful to simply have a Mondeo outside the house?

Do you not think £4200 a year is money down the drain and wasteful to simply have a Mondeo outside the house?

People just seem to think about money differently, like having a mobile on contract even though it's clearly more expensive than buying a handset and PAYG.

My priorities are getting money off the mortgage and doing the house up (lets not mention bikes), so not having a new car or iPhone 9 are easy sacrifices to make.

People just seem to think about money differently

There's a reason car leases and mobile phone contracts are quoted with monthly rather than annual cost.

(personally I have a mobile contract, but handset bought separately, and it works out cheaper than PAYG for my usage).

These days everything is advertised as per month to lull you into the "i can afford that" mindset.

Sofa - no problem - 50 quid a month next 4 years

Furniture - 50 quid a month for next 4 years

New kitchen - 300 a month for next 5 years

Car - 300 quid a month the next 5 years + balloon payment

House 1500 a month for the next 25 years.....

A lot can happen in 6 months and your still liable for all of these payments. Each on its own seems affordable but soon they add up to a monthly paycheck and you find your self un able to cope financially with surprises life throws at you.

Ewan mcgregor got it right.

Fyi the reason i dont give a % of my wage is that its not what i can afford that is the limiting factor in my car choice - its what i can afford to see ruined by other folk. Doesnt matter where i park it and how careful i am to park away from other cars , more often than not i find someones opened a door into it , hit it with a trolley etc etc ....if it was a lease or an hp i might be inclined to fix that ..... On my cheap banger i just leave it. My last car i bought , it came with a dents and scratches inevery panel , looks like father teds car, was over a grand cheaper and much lower milage/fully stamped book than anything comparible , and saves me being precious about it when it gets a new ding.

@trailrat concur! Even though I drive a second hand £5k car I still park it away from the ratrace at the supermarkets, although no matter how far I park away some three door heap always parks right next to me with little room to get in the drivers door. Sods law 😮 Usually this 3 door heap will have a kids seat in the back requiring much extra large door edge ding on my car action while MILF tries to extract the kid from the back.

Theres no respect for others property nowadays 😆

1. Kids don't mean you need a bigger car. When ours were younger we had a Fiesta, friends get on fine with a Yaris as their 'big' car, my Mam had five kids and a Fiesta. Babies are actually very small.

2. Old cars are fine. Our current car is a 2005 Corolla Verso (2 big dogs = big boot needed), which cost us £2k with 103000 miles on the clock. (We recently passed 111111 miles, which was very exciting.) An old car means it doesn't matter when you drag one side of it down the concrete wall of a multi-storey ramp. At its last MOT it needed a £40 tyre.

Renting a car boggles my mind. £4k would get you a car that is cheap to maintain and reliable... granted probably not going to make the neighbours look at you with envious eyes but who really cares about that anyway? I'd rather people spent their cash on keeping up appearances and save mine to move somewhere nicer or go on more holidays.

I mainly drive a 53 plate boringo and it's most expensive bill is the tax each year (£225 for my model). It's never needed anything and I don't think anyone could say it's more unreliable than a new more electrical reliant car.

My misses has a tdi polo thats falling apart slowly and is turning out to be costly so it's going to get run into the ground now so i'm not convinced buying something like a gti polo or golf is a safe bet.. i'd go more simple.

I think the reason you ask this question is that you probably like the idea of a shiny car but you don't have a big wad of cash to splash on one. I'd say £3-4k would get you something decent for the next 3-4 years and then with the cash you've saved you can buy another then and the current car will owe you nothing.

The other advantage of a car as special as a berlingo is that tyres cost about £50 for a decent brand. The roads near us I couldn't get more performance from a bigger engine and I'm not commuting 100s of a miles a day so there is little need for more comfort.

I think the magic number you were looking for was 10% of what you earn is a suitable figure for a car (so said some stw god on here last year?!)

I basically look at car ownership as luxury money, i.e. how much money are you prepared to put aside and never get anything back? Depreciation is so huge that old, reliable second hand cars make a lot of sense. There are loads of 10+ year old Japanese cars that I would be happy to drive. Previous car that we owned (Passat TDI) was 9 years and 93,000 miles old and has been as reliable as the car we currently own (bought less than 1 year and 8,500 miles old).

Unfortunately I do not put my money where my mouth is anymore in terms of buying cheap. The other half was keen to have something 'reliable' and that she wanted to drive. From savings we paid £19.5k for a 1 yr old BMW estate. The new price was over £33k, so in the first year the original owner lost near £14k on a car they didn't even like that much. For £20k, I was hoping for a great ownership experience. Whilst it is good to drive, in less than 3 years it has had 2 bits of major work done under warranty. A friend has had the same issue rectified on an identical, but older model, at over £4k... Dealership service has also been mediocre, as we were not the original purchasers.

Because the repairs would have been so expensive if we had had to pay, I will spend circa £400 on a each year on a warranty extension, as practically nothing can get repaired for less than a few hundred pounds if you go direct to BMW.

So now I think if we are spending those sorts of amounts on a car, I would rather either go cheap and live a stress free existence (the last car we owned cost us £3.5k), or just bite the bullet and chose something expensive but brand new that I can whine at the dealer about if it goes wrong. Either way, it is best to see the purchase price plus running costs as money down the toilet.

At least hookers and coke would be fun.

RRR - Its through the NHS.

Maybe see how you get on with junior using your current car?
Put whatever money you intended to spend in a savings account.
Should your current car be fine keep saving.
In the future you will be able to buy a car with cash,all in and not any kind of finance/loan/whatever.
You will also be safe from the evil money grabbing bastards should anything happen to your current financial situation.

Just to clarify, my current car wasn't new when I took out the HP (it was 4yrs old, 11k and 1/3rd the original price!), it's now 6 yrs old. I'm not desperate to get a new new car but HP on a couple of years old car is again looking like a tempting compromise.

My current car is worth a little bit more than the outstanding HP and I can return it at any point without penalty. I'm just tying to get a feel for what others do as the I think the work lease scheme has distorted my view!