[Closed] Even moderately expensive cars..how do people afford them?

Most of them are company cars?

leasing?

I often wonder the same, I'm guessing a lot of them are on contract, but it's still a lot of money for a box of metal on wheels....

Buying outright, either in cash, or over 3-5 years with a loan are not the only ways to get a (new) car.

Plenty of schemes where you effectively rent the car and give it back, or extend the loan, or extend for another 3 years with a new model,...

Finance packages which hide how much the cars actually cost by making things so complicated people haven't got a clue what they are signing up for.

the vast majority of new cars, like BMW, Audi, VW etc are either leased, on the never never, with a one off massive end payment that will never get paid or company cars.

EDIT :

Plenty of schemes where you effectively rent the car and give it back, or extend the loan, or extend for another 3 years with a new model,...

this says what i wanted to say, a lot better 🙂

I'm amazed at home many people, with quite modest houses, have the new squashed Range Rover thing on their drives, does seem an insane amount of money to spend on something that will depreciate £10k+ in the first year....

You don't need much of a deposit to take out a PCP, £2500 dep was what I was asked for when I enquired about an SQ5 at a recent motor show in Canary Wharf.
Not a lot, then payments of £650-750pcm depending on what length of contract you decide upon.

People paying out loads of cash is the answer, whether they can afford it or not is a different question.

But for many the move to taxing company cars heavily made them look at spending the same cost on something they actually wanted to drive.

@footflaps - you mean the Range Rover Clitoris (because every c***'s got one...).

Cheers

Danny B

Not heard it called that, but I know what you mean 🙂

Plenty of people who bought houses in the 90s, for example, have shed loads of equity and can easily move funds about to accommodate the purchase/leasing of a (sometimes relatively) new car.

I've lost count of the number of chavvy looking folk I've seen driving decent motors. Not saying they've not grafted for them, but I reckon a fair few bought council houses on the cheap (discounted) and are sitting on a stack of cash as a result, especially down here in the SE.

Some people do seem to be prepared to shell out serious money to try and to fill the yawning void where their soul should be

As everyone says. Lots of company cars, lots of leasing deals or finance deals pushed by the dealers. I'm always getting offers sent through. As we as a small proportion of people that are very well off buying them or people stretching themselves to get a particular car.

Also I think that there is an observational bias since you probably notice the expensive / outlandish cars more, when in reality they aren't that common.

I've lost count of the number of chavvy looking folk I've seen driving decent motors. Not saying they've not grafted for them, but I reckon a fair few [s]bought council houses on the cheap (discounted) and are sitting on a stack of cash as a result, especially down here in the SE[/s] sell drugs.

FIFY

Mortgage paid off? Loads of disposable income? No bikes, bike trips to pay for?

I know loads of people who prioritise their car ownership over other spending.

You can lease a brand new m3 for a little over £500 a month.

That is achievable for many many people who want a nice car.

A few years ago I looked at buying an Audi/BMW. I didn't want one of the finance packages as a) I don't understand them and b) everybody I know who has had one has been shafted in one way or another.

IME the dealers don't take you seriously as a purchaser unless you think in terms of 'how much a month', partly because of their commission, and partly because if you pay outright and think about what it costs, luxury car ownership makes no sense.

You don't need to spend 45k to get comfortable seats and aircon, which lets face it are the priorities for sitting in slow moving traffic.

I know loads of people who prioritise their car ownership over other spending.

and

Some people do seem to be prepared to shell out serious money to try and to fill the yawning void where their soul should be

+1

🙂

binners - Member

Some people do seem to be prepared to shell out serious money to try and to fill the yawning void where their soul should be

IME the dealers don't take you seriously as a purchaser unless you think in terms of 'how much a month', partly because of their commission, and partly because if you pay outright and think about what it costs, luxury car ownership makes no sense.

To be fair to the car dealers, the margins in the car are tiny (often 1%), so the only way they make ends meet is selling finance, servicing and hitting manufacturer set volume targets which trigger bonuses.

A guy at work is currently leasing an M6 at around £1,200 per month.

He isn't on a particularly large salary, drives it 5 miles to work every day, then 5 miles home and uses a people carrier at the weekend.

Seems to like looking out the window at it all day though! 🙂

As someone who spent the first 30 years of my life without a car, I still can't get my head round why people want to RENT one for £500+ a month, then drive it to work/about town (that said, not many people understand why I'd want to spend £600 on a rear shock for a bicycle).

Plenty of people who bought houses in the 90s, for example, have shed loads of equity and can easily move funds about to accommodate the purchase/leasing of a (sometimes relatively) new car

To be fair, I did this, bought a flat back in the 90's, had over 50k of equity in it, [s]needed[/s] wanted a bigger car when Warton junior came along, so freed up 13k to but a nearly new civic. cost me an extra 50 quid a month on my mortgage.

it's their money/ debt - let them do what they want with it.

Some people do seem to be prepared to shell out serious money to try and to fill the yawning void where their soul should be

I don't know that its really any different to owning a nice bike?

Why the need to be so judgmental? Jelousy?

I'd LOVE an M3, but I simply can't afford one.

I could have afforded a silly car, when I was in my last job. Pretty good salary (not amazing, but good), and few real commitments. I bought a scabby mondeo instead, because it still seemed like madness, a brand new expensive car is not 20 times better than my faded rattly repmobile.

But people have different priorities, how many people in here have spent more on bikes than cars?

I'm amazed at home many people, with quite modest houses, have the new squashed Range Rover thing on their drives, does seem an insane amount of money to spend on something that will depreciate £10k+ in the first year....

Makes me laugh. I'm a bit of a petrol head it has to be said yet have never spent over 12k on a car in my entire life, all of those bought outright with cash or a simple bank loan.

Interesting that for that first years 10k depreciation on one of those brand new [b]'Cock Chariots'[/b] you could afford some really unusual, deeply cool, fairly rare and fast machinery. How about a seriously cool and seriously fast B5 RS4 Avant, the manic mid engined Renault Clio V6, a duo of Mint Fiat Coupe 20V Turbo and Mint 205 Gti, A 8-10yr old BMW M3? The list could go on . . .

I know which I'd rather have.

PCP or leasing seems a mugs game to me. You have the depreciation of the car to pay for, plus the profit margin of the lease company on top, plus a 'pants down shafting' at the end of term when you've gone over your mileage allowance or there's a small scratch to the paintwork - all spread over 36 convenient monthly payments.

As others have said - leasing and various 'personal finance plans'

I've got a company car (BMW 1-Series) however if I opted out of the scheme and took the cash I'd get something like £450 PCM (taxable though) which goes a long way toward something pretty nice on a personal lease...
The only reason I don't is because I do a lot of miles (25k per year, about 20k of which is personal mileage) and lease-plans get quite expensive with high mileage.
I also quite like taking the car to a dealers for a big service and not paying anything.
If I got put up a grade or so at work there are 5-series BMWs, big Audis and Mercs on the list - you just get caned for tax on big company cars these days...

they are all paid for by "where there's a blame claim", "PPI refunds" or "record company advances".

Debt is only a fiction, some people are often willing to pay £300 or so a month and ignore the "balloon payment fiction" as they will be handing the car back after three years and getting another, their ownership is no different to that of someone who has bought one outright except for they have more cash readly available to them.

Its all down to how you look at it.

Back in the day I used to swap cars practically every summer; including an M3, VX220T, 320D, A4 Avant etc. All were either new or 2-3 yrs old. Have always been into cars and back then I could afford it - cheap mortgage, no kids etc. Frightening how much was lost to depreciation 😯 Still use the A4 now as the expenditure of house and little 'un has gone virtually exponential!

I've owned two 3 series in the last 9 years. Had to take some HP but was able to put a fairly large deposit down. Neither were brand new.

The general manger of the dealership told me over 80% of the vehicles he "sold" were PCPs. Therefore, when I see an expensive car I tend to think it's only being rented or is a company vehicle.

I also had a client once who was a valeter in a BMW dealership. She told me the lot was full of vehicles people had left in for service or repair and had not collected because they couldn't afford to pay for the repairs or servicing!

I don't think I would ever put money into a car again. Most seriously wealthy people I know drive scrappers.

if I opted out of the scheme and took the cash I'd get something like £450 PCM (taxable though)

Similar here. I have a car allowance but from day one opted for the cash. Can no longer advocate any significant spend on a shiny box on wheels.

[i]PCP or leasing seems a mugs game to me. You have the depreciation of the car to pay for, plus the profit margin of the lease company on top - all spread over 36 convenient monthly payments. [/i]

+1

A pal of mine who leased a pair of nearly new BMW's (at £450 per month each) said I was mad to buy my old 535i (paid £2k for it), as look how bad on fuel it'll be...

Hmm, his 520d did 46mpg whereas my 535i did 23mpg - so over the 50k miles mine cost an extra £5k in fuel. But he'd paid out over £20k just in lease costs for the one car, nevermind his initial deposit.

Why the need to be so judgmental? Jelousy?

STW in sanctimony shocker

Just priorities isn't it, If I wanted a new car I could buy one, but I don't so haven't.

Some people do seem to be prepared to shell out serious money to try and to fill the yawning void where their soul should be

On a bike forum where handmade titanium hardtails are considered fairly normal?

Not jealousy at all. Just incomprehension. I really don't get it.

Many decisions others make seem crazy when you apply your own 'logic' to them. What do you spend a lot of money which gives you pleasure?

Houses appreciate in value, but this could seem a bizarre investment when the greatest benefit from this is likely when you die... I have bought reasonably expensive cars, bicycles, hifi etc... All have given me pleasure and I have used them a lot.

Because some people seem to get paid an amazing salary for doing mundane and boring jobs.

They cant afford them , but constantly increase their level on indebtedness to be able to buy them

The money come from an inheritance from a grandparent who owned property since the 60's , and is blown on an ego chariot

Certainly not jealousy...just curiosity. I just wonder how the school run car park can be so full of Discos, Range Rovers, Audi's, BMWs etc...I would love any of them frankly, and there's me in my crappy Insignia, which cost me £10k....I won't feel quite so inadequate knowing that they're all 'renting'. 😉

Second hand is the only way I'd buy a car. Have never seen the point of shelling out on a new car. As mentioned elsewhere in the thread, you can still pick up a nice car second hand for comparatively little.

A colleague of mine shelled out for a new Jaaaaaag recently. Within a week it was covered in supermarket style scratches and dents. He was distraught...as I would have been.

Meanwhile....in a shagged out Berlingo.....

Have to admit though, it is far nicer going places in his car than mine!

I had to source my new company car. I ended up with a 3 series touring efficientdynamics. It costs them ~£330/month for a 3 year lease with 20k/year milage allowance. Seems quite reasonable to me. I certainly want for any more car. It's returning ~60MPG and is saving them (fuel) and me (tax) a fortune.

I was speaking to a bloke at the last place I worked about this, as he and his wife change their car every 3 years for a new one and get them on a finance deal (PCP?). Nothing really fancy - just small hatchbacks.

One of the reasons he does this as he never has to worry about any big expenses - the car is covered under warranty, it will be replaced before it needs an MOT and he knows how much his servicing is going to cost. So it's a fairly consistent expense and he doesn't mind paying the cost to always be driving a 'new' car.

Also, he's almost trapped into doing that indefinitely as while they are paying finance for a car, they don't have enough disposable income to save to buy themselves a 'decent' second hand car that isn't potentially going to go BANG leaving him with a massive bill that he can't afford.

I can kind of see his point.
My first car I bought with a student loan straight out of uni (which I paid off early) and my second (current) car I paid for outright.
But, with a house that needs a fair amount of updating and having just paid for a wedding, I am not sure I will have saved enough come car replacement time to afford to get one without a loan or getting it on finance.
I'm banking on keeping my current car for a couple more years and hope that it doesn't pack up in a major way, but with 215k miles on it and still on the original clutch there are no guarantees....

I guess it is personal circumstance. I get money from my work to have a car. It's a nice car and costs a decent amount on a monthly basis, all is covered by my allowance though even after tax. From the outside looking in I guess folk could be judgmental, but I need a reliable car and do around 15-20k work miles a year so know I would rather be in a comfortable car and have the backup that if it breaks, it's under warranty and there are no nasty unexpected costs.

If I lost my job or I didn't need a car for work, it would be sold.

Moving from a contributory car scheme to buying my own certainly made me review my choices but then I've never been a car buff of any sort and my most expensive choice was a Honda Civic 🙂

After a house, a car is probably the most obvious statement of wealth and status. That's why so many feel the need to keep up with their friends and neighbours.

A colleague of mine shelled out for a new Jaaaaaag recently. Within a week it was covered in supermarket style scratches and dents. He was distraught...as I would have been.

I came back to my car after sleeping on Sanna beach at the weekend to find it covered in giant bird crap, a stubbed out cigarette, a container of Finish Line lube which had leaked in the boot, followed by me accidentally smacking it with my forks as I tried to repack things. About 5 miles down the road I ended up railing it along a bush after some numpty decided to take the racing line round a corner.

If I had a new car I think I'd spend my life constantly worried about it! 🙂

I took a hefty car allowance instead of a company car, bought an older car and now have lots of spare cash to [s]waste[/s] spend on bike stuff 🙂

How is it that BWM seem to play the tax/leasing game so well and other companies dont?
A quick look on some sites and you get a 520d touring for the same price as a Mondeo 2.0 estate.

How is it that BWM seem to play the tax/leasing game so well and other companies dont?
A quick look on some sites and you get a 520d touring for the same price as a Mondeo 2.0 estate.

Better resale value

Yeah, I think I'd find it hard to get the full use out of a really nice car- mine is fine, it's mechanically solid and very fit for purpose and all, and comfy and reasonably rapid but it's also old and worn enough that I'm happy to park it in a ditch, or leave it in a ropey area of town, or fill it with mud and bikes, or bounce it up a forest track with a load of trailbuilding kit in the back when we run out of pickups...

Always a balance between owning things and things owning you. But then again I guess if I was properly minted I could do all that in a really nice car and still not care!

I hadn't realised that owning a car, and parking it on the street, causes a low level anxiety, worrying about whether someone had clocked it or not etc. It's only since I scrapped it and went car free did I realise that I was slightly happier for not owning one - one less thing to worry about. OH gets a company car, so I can borrow that if needs be.

I live in a modest semi in a modest part of Bristol. My next door neighbour's son has a one year old Audi TT. Easy to afford when you're still living with your parents, I suppose, though how he insures it, I've no idea.

I completely understand why folks want and buy nice new cars, its all depends what you're into.

Some people get a lot of enjoyment from owning a nice car and I don't necessarily think they are trying to fill some kind of void.

Plenty of folks have a car as their hobby and get loads of fun from just owning and driving it; depreciation doesn't even enter into the equation.

If you really had the hots for a particular car and can afford it; then does it really matter what the depreciation is?

There is no point making do with something else and being too sensible about it. A car is probably the next dearest thing people buy after a house, so you need to love what you're spending all that money on.

I no longer run a car as I only work 7 miles away from work and I can get to the shops and trails without needing a car.

"Nearly new"? A twelve month old motor will be a fraction of the price of a new car. Never understood why anyone would buy a brand new car, they depreciate vertically.

I wouldn't choose to spend money on a car anymore, when I was younger I liked nice cars and was happy to spend my company car allowance on various half decent ones. Now I am older and have two children, two large dogs and commute by bike I have very different priorities so a car is low on my list. How people choose to spend their cash is up to them, leases on nice cars are affordable so I can see why people are tempted. Personally my limit is now 3k and I expect to run a car for up to 3 years and then punt it on for around half what I paid. It's bangernomics but not quite a banger. Works for me but many people wouldn't be seen dead in my car.

For many people there seems to be a link between the car you drive and self esteem which I just don't have.

There is no point making do with something else and being too sensible about it. A car is probably the next dearest thing people buy after a house, so you need to love what you're spending all that money on.

Nah - my bikes are worth much more than my car. Which is, of course, as it should be.

Back when I had a substantial business in Oz, I used to look at the real cost of cars because I used to pay cash for mine - I never liked borrowing money for depreciating consumables.

Buying a new decent quality luxury car was the same as standing in the forecourt of the car dealers and tearing up about $15,000 - $20,000 for 1st year depreciation. As I was in a business where clients tended to judge your merits by external signs (first impressions) it was important not to be in an old wreck or something too basic.

I solved the problem by buying a new Australian car (Fairlane) every couple of years and with the money I had saved by not buying an overpriced import, I used to buy myself a new motorbike as well.

If anything this impressed the impressionable more.

So don't waste your money on luxury cars. Spend the extra on bikes 🙂

A car is used as a display of social status though, so if you need a boost buy a car on tic.

a car is a tool at best, otherwise its an expensive luxury--that gives dubious pleasure, talk about people being sold an illusion.....

a [s]car [/s] bike is a tool at best, otherwise its an expensive luxury--that gives dubious pleasure, talk about people being sold an illusion.....

Different how?

Different how?

Expensive bike = £4k
Expensive car = £40k

Different how?

Well when it comes to car adverts, they all show said machine carving through beautiful, empty alpine roads, when the reality is this...

[img] [/img]

In bike adverts, other than the riders generally being less bald and fat, the reality tends to tally a lot closer to the 'image'

wors - Member

How is it that BWM seem to play the tax/leasing game so well and other companies dont?
A quick look on some sites and you get a 520d touring for the same price as a Mondeo 2.0 estate.

[b]Better resale value[/b]

A friend is having to give up driving due to a worsening eyesight problem.
18 months ago he bought a new Lexus that was 60k.
7,000 miles on and the best offer was from Lexus who'd give him 33k.We buy any car 27.5k.
So much for the 50% depreciation over 3 years figures bandied about for high end cars.

I've always wondering this.

I've followed the launch of the new Merc A Class quite closely as I think it looks bad ass and one day I might fancy once (One day = 5 years later)

Now this car is about £23-25k depending on what you have obviously.

£25,000 pounds!!

Who has that just sitting around? I mean, I know i'm only 23 and on a less than average wage (UK wide) but still.

Yet every day I see at least one driving about. Some in the top spec AMG version.

How do people afford all this?!

I guess the answer is the personal finance option.... £5k deposit is realistic and then £300 quid a month. I guess if you have a house already then that's reachable if you've not much else to spend for.

And then give it back after 3 years.

Different how?

Seriously? A bike is a thing of beauty, a sublime combination of cutting-edge tech and human muscle to move you smoothly and almost silently through almost any terrain, powered only by what you had for breakfast.

A car is a tin box used for moving stuff, that spends most of it's life either stuck in a traffic jam, or breaking in expensive ways.

binners - Member
Different how?

Well when it comes to car adverts, they all show said machine carving through beautiful, empty alpine roads, when the reality is this...

I'd say for a lot of people (SE England excluded, perhaps) your image of motoring is the exception, rather than the rule.

Your statement could be easily modified and be equally appropriate...

Well when it comes to [i]mountain bike[/i] adverts, they all show said machine carving through beautiful, empty alpine [i]trails[/i], when the reality is this...

[img] [/img]

I'd say for a lot of people (SE England excluded, perhaps) your image of motoring is the exception, rather than the rule.

Purlease. Most people use their cars for commuting, the school run and shopping. They are purely a convenient tool.

I'd say for a lot of people (SE England excluded, perhaps) your image of motoring is the exception, rather than the rule.

Seriously? You're not familiar with the M62 or M60* in the morning then?

* substitute for pretty much any motorway/major road in any major town or city in the country.

All advertising pushes the boundaries of lying, but the yawning chasm between the reality and the image of car adverts is waaaaaaaaaaay beyond any other industry,. With the possible exception of Macdonalds 😉

To the OP, there are so many reasons.
Company car
Lease car
Finance.
Inheritance
All sorts of ways to own something expensive. The biggest reason will be 'want'
Then take a day off and go for a drive in the same place at about 10.30, you'll see less newer cars, far more oldish ones.

Another reason as reported on the news is people taking the pi$$ whilst on interest only motgages.

Personally I'm a cash buyer, don't spend much. Our car is nearly ten years old and just done over 60K. If I had truly free money I'd get a new motor in a blink of an eye. I only ever want a new car when I see other people in nice new shiny ones 🙁

Seriously? A bike is a thing of beauty, a sublime combination of cutting-edge tech and human muscle to move you smoothly and almost silently through almost any terrain, powered only by what you had for breakfast.

Cars are just as amazing machines as bikes. Even more so in fact. A modern car (even a cheap one) is an amazing and fantastic machine.

Far more engineering goes into one than a bike. That's why they cost so much.

Any number of reasons -

Company car
Leasing Hire
They earn a very good wage
They don't spend money on other things that you may consider important and therefore have more to spend on the things they think are important.
Buy second/third hand

I'd love a big car, just can't afford it so I've parked that 'requirement' for now...

When i announced to the car dealer that i was intending to buy my car with cash, he nearly fell off his chair in suprise, and his "perma-smile" slid off his face when he realised that they were just going to get the cost of the car and that's all, not some massively inflated and well hidden total sum payable over the next 5 years!

When most people say "I want a Ferrari" what they really mean is "I want a Ferrari lifestyle". Just having a 458 and taking it to Tesco's is really no different to taking a mondeo (except you can't get much shopping in, and will spend the whole time panicking that it's been scratched/dented/stolen etc!)

As well as all the reasons above. There are also (remember I live in deepest Surrey) plenty of people around here that are still very cash rich. They just buy expensive new cars because they like them and they can. I have no problem with it.

To all of you saying "how do people afford expensive cars" there is probably a forum somewhere of people saying "how do people afford £1K on a bike". It's all relative.

£25,000 pounds!!

Who has that just sitting around? I mean, I know i'm only 23 and on a less than average wage (UK wide) but still.

I work with a guy, mid twenties, no wife, kids, car, rents his flat. doesn't go out drinking, just plays xbox and watches American TV. he earns around 28k a year

He has > 30k in the bank.

^ Warton, he sounds like a fun chap.. and much like a mate of mine who is approaching 40!

rootes, he's actually a good lad to speak to, can have a laugh with him, but I know what you mean 🙂

My neighbour has a Rangerover Evoque with a private plate.

I earn a good wage and drive an 06 Passat estate. She works evening shifts in a local pub.

I don't get it either.

I think the house v car v bike v whatever thing is interesting as it's comparing different scales of cash and people choose to split their money differently.

A house is always there as a pot of cash that can be sold if necessary so many are quite happy to spend as much on this as they can as they consider it to be as safe as, er, you know.

A car depreciates significantly no matter how much it's been used so there is a fairly easy cost to be calculated based on depreciation and running costs.

Bikes depreciate in a similar way to cars but the absolute amount isn't so dramatic.

So where to put your money? A £10k car will do most of what you want - indeed all of what most need. If this is used to buy a 3 yr old car then it'll depreciate less than a new £10k car but is likely to need more maintenance and potentially break down.

Might be interesting to compare % split on houses/cars/bikes owned, I'm house heavy I suppose - 98% in fact!

Feel kinda sorry for people in brand new cars - particularly common base spec, Euro-box, dull as dishwater stuff like Vauxhalls, Audi's, Peugeots, VW's etc, or stuff that's actually a pretty dull car but has a supposed prestige price tag/badge like an Infiniti or similar. If they'd have bought second hand then for far far less money then they could be driving round in something pretty damn special.

If you compare it to partners then what would you choose? A pig ugly virgin who's no fun in the sack, or a good looking model with a tongue like an electric eel who happens to have had a couple of previous?

I guess if you don't like driving/cars/women/men/sex then the above won't matter to you I guess - but perhaps it's food for thought none the less?

People say they buy new cars because they don't want any unexpected bills - but what's more unexpected than a £30k loss come trade in time as per the guy with the Lexus above? Cars are more reliable than they ever have been and a few components wearing out and needing replacement on a second hand car is small change compared to the hidden depreciation shocker, particularly as an out of warranty car can be serviced at an independent specialist at 1/2 the main dealer prices.

Anyway people, please keep buying expensive new cars, and I'll keep buying them off you with a few thousand miles on the clock and full main dealer service history for 1/3 the price you paid in 5-6 years time.

agent007 - Member

what's more unexpected than a £30k loss come trade in time as per the guy with the Lexus above?

That's pretty much a perfect example of "expected" tbh.