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I'm starting to think it's time for a new (to me) car as the current one is 10 years old and starting to have issues. Every other car on the road appears to be less than 3 years old so obviously lots of people can make the sums work so how can I with a good wage in a two person, no kids household struggle to justify it.
My car is worth 10% of my annual income and I do approx 10k miles per annum. What are you figures?
And yes I know affordability is more about cost per mile but that's a lot harder to work out.
Doesn't mean much though does it. Mine's on finance, which is 10% of my net income each month.
If I'd bought it outright it would have been about 20% of my gross annual income.
That said, a couple of folk I was at school with appear to have far better cars than I'd expect, and I do find myself wondering how they're paying for them.
my car is a 57 plate, bought when it was 12 month old. I will run it until it dies.
cars are just tool. I try not to use mine.
Car worth roughly 10% of income (it's a lease, so no idea the exact cost), did a staggering 500 miles last year! Only filled it up 3 times and it went back with 3/4 full tank!
my car is a 57 plate, bought when it was 12 month old. I will run it until it dies.
cars are just tool. I try not to use mine.
Just 2 posts until one which doesn't even remotely deal with the question! Gold star Ton 😉
In similar vain. Cars have wheels.
Have a car fund, separate savings account. Pay money in to it every month, even the month you buy the new car, and try not to raid it.
In the last 3-5 years or so, some of the lease type deals look better than ownership, unless you are going to seriously abuse the car. My last one was used as a builders wagon, dog shed and transport for three toddlers. Better to own that one rather than try to hand it over at the end of a lease.
When I bought mine it cost about 25% of my gross annual income. Sounds pretty scary when you look at it like that!
However after 5 years and 2 job changes, it's worth about 3% of my annual income.
I was thinking of changing it but I'm too tight!
Kids grown up and left home (but seem to keep coming back), mortgage paid off, both of us working, two cars under 3 years old, a VW T4 and a KTM Duke 690 for fun. I don't have a clue I just pay the bills.
sorry....I am waiting for my breakfast to arrive and cant concentrate. 😳
Finance and Leasing is the answer to your question.
I'm not sure how most justify it though.
My Mrs' 13yr old car just passed its MOT at the first attempt on Monday and hasn't had a penny spent on her other than oil and filters and brake pads in the past 5 years. She'd like a newer car, but as people keep bashing into it out on the street where it's parked it's really not worth coughing up £2000 - £3000 on lease fee's each year. Even if we have to shell out £500/yr on repairs it's still more economical for a few more years yet.
Car worth 8% of annual income. Fuel costs about the same....
It's an old work horse car that does motorway miles. if i were to change it, which i'm going to have to soon, i'd look at a finance deal.
You will find most are on finance plans either over 3-5yrs at £2-300 per month or on these PCP type contracts which reduce the figures down to £100-£150 but then you have to find a final payment at the end of the difference in the monthly figure (Ie its not cheaper or anything, you are just not paying for all the car)
Dealerships like the second offer because it gets you into a change cycle. Easier to get you to change after 3yrs when you need to find between £3k or 5K to pay off your car or they just hand you the keys to a new one and keep paying. Essentially you are just renting it (Paying the depreciation) and it keeps a nice flow of new cars followed by second hand stock with nice sensible mileage.
I looked at cars for my wife recently. I had about £6-6500 deposit (Her current car) and still I found things astronomical. I decided that the benefits of owning a 15,000mls 3yr old car far outweighed having some more finance and a spangly new one on the drive.
I saved up for 5 years to buy a car that was 50% of my annual income. That was in August 2005...I still have it.
I spend less than 1k on my cars and throw them away when they die .I really couldnt justify wasting money that could be better spent on bikes ,beer and holidays on a car .Current car is an x reg Honda Accord ,cost £400 and had 54k on it when I bought it
I generally get a car between 20-30% and keep it for as long as I can, which in the past has worked out around 10-12 years. During this period I'll save for the next one and not bother with finance.
While I'm not that interested in cars, I do always end up buying one for far more than I should, but I quite like having something a little bit nicer than I really need even if I struggle to admit it. Although judging by the other cars you see it's not really that fancy at all.
I think the same thing, cars are expensive and depreciated hard, I guess people are earning more than me.
I live in a particularly unaffordable area (house price vs income) and I have noticed that the cars I see in more affordable places are much nicer than the dross that's parked on my road.
(London excepted, natch.)
and the answer, mine's leased, with my employer contributing. cost is roughly 7% of my net income. If I had to buy myself it would be a £500 Honda I think.
10 year old car, that's an upgrade for me.
Never let ego get in the way of getting from A to B, could cost you thousands.
mine is on PCP* finance, monthly payment is less than 10% of my nett monthly income.
* I think this is how the majority of new cars are financed these days, other than leased & company cars. PCP schemes generally last 24 - 42 months & the final payment is always significantly less than the car is predicted to have depreciated to, so that you then have some equity in the car to use as a deposit on your next PCP scheme. Provided you stay with the same finance company...
Currently worth about 50% of my net income (but irrelevant as leased through work)
About 35-40k a year.
Before that, banger, leased, hire, leased, nice banger.
Cars are a pita!
I'd say.... don't worry about what other people do with their money. The decisions people make are based of factors other that what change they've got in their pocket.
A lot depends on the line of work you're in and whats expected of you. In some professions and some roles you have to wear your success on the outside. Peacocks feathers. The carpark is the expression of the wellbeing of the company.
If thats the world you live in, whether you realise you're doing it or not, you'll commit your money to a nice new car rather than the other nice (or even necessary) things you could do with it.
People also have varying senses of whats affordable - in some cases 'regular and predictable' defines affordable. If you've got a fixed income high regular payments for a new, reliable, warrentee'd, inclusive servicing, no MOT costs, no exhausts and no tyres car ownership is more reassuring than an cheaper car and the fear of unexpected one-off big bills. For me its the opposite - my income is irregular so it doesn't matter what something costs in total, it better that its paid for if full whenever that cost is required rather than on a monthly drip drip basis. So I'm happy to pay big bills but wary of committing to high capital cost
Conversely in some lines of work and businesses theres no pressure to impress in the carpark. In my field and culture of work a shiney new car would actually be detrimental to my business.
It does surprise me how much people spend on cars and still end up with something dull. I can understand spending a lot if it is something that interests you but if just end up with a 'car' then why spend so much?
Current car was about 2 weeks wages, 4%. Spend maybe a quarter of that on servicing etc, probably keep it 4 years and expect to scrap it. That makes it about 2% of income over its life.
As a household we have 1 car that cost 6% of our combined income. It was paid for over 2 years as, well, we were offered interest free credit so why wouldn't we?
Bought six years ago at around 20% of yearly income at the time. Got a 3 year regular bank loan to pay for it. Car was 3 years old at the time.
Sadly, haven't been able to save up for another so will be running this one till it dies. Its a diesel estate and I drive like my grandad so its far from abused. Hoping to get another 3 or 4 years before the repair costs start mounting.
Car value ~ 8% of annual hosehold income
Van value ~ 15% of annual household income
Last two cars sold/scrapped, depreciation costs....
~ £500/pa
~ £400/pa
So other running costs (fuel, insurance, MOT, service, etc, etc) more signigficant portion of the overall cost
cold hard cash.... always. in my 32 years i have never bought a single item on credit (other than drugs on tick when i was [s]a stoned student[s] poor).
got my old man's mentality when it comes to buying stuff you can't afford.
Approx 4% of my income,a 54 plate Focus bought 3 years ago.It's the most I've ever spent on a car & I'll run it until it dies needs money spending on it or it dies.
I've got better things than cars to spend my earnings on,necessary evil nothing more..
my car is a 57 plate, bought when it was 12 month old. I will run it until it dies.
cars are just tool. I try not to use mine.
My have not answered the question but raises a damn good point. Cars are basically a status symbol these days and finance/ company cars are an easy way for people to get nice new cars 'cheaply'. But even then £200 - £300 a month is a staggering amount of cash when you could:
I spend less than 1k on my cars and throw them away when they die
Iain
It has a lot to doing with outgpings too. Once you have a mortgage, kids in nursery, a bike habit and even worse entry fees and suddenly a cheap 5k deisel estate to throw bikes an camping gear without worrying about scratching it is nirvana.
Then you sit in the traffic queue jealously watch the 22yo's in their M3's and Merc amgs yet not othe commitments.
But even then £200 - £300 a month is a staggering amount of cash when you could:I spend less than 1k on my cars and throw them away when they die
shhhhhh. Someone has to buy them new.
I buy as new as I can, as best looked after and serviced as I can.
I then run into the ground.
So we have 53 Yaris / 100k and 57 Galaxy / 80k. We do 10k per year in Yaris and 25k in the Galaxy (work car). We own both, and save cash for next one if at all possible.
I think it can be the running costs that are the killer - and make running an older car not far off a new one. But then we paid £7k for the Galaxy vs £27k for the new one...
We only pay for them due to works mileage allowance. I too don't know how folk afford new ones, especially if doing high miles in them. 😐
Im not a 'car person' I have a 10yr old car that I pay a few hundred quid py to get through its mot. Its safe, I can fit a lot of stuff in it and it gets me and my family from a to b. I couldn't imagine spending 10% of my income on a car I would rather spend that on holidays and bikes. For some on my street it seems all they care about is having a flash motor even to the detriment to their family and home.
When I do buy a car I always pay for it outright.
Soberingly, my car's cost price was about two thirds of my salary. That said, it's a company car on a lease agreement, if I was buying myself it'd probably be a tenth of that.
Also, that statement speaks more about my salary than my car's value.
I like a nice car but tend to keep them a long time 5-10 years. Current car cost 15% of my income when I bought it new but it's 9 years old now. Annual running costs inc depreciation about 5% of gross income.
[i]sorry....I am waiting for my breakfast to arrive and cant concentrate. [/i]
You and me both ton, I've been lying here in bed awake and listening to the radio since 7.30, it's my day off and I'm still waiting for my butler (even the maid would do) to bring me my scrambled eggs n' toast, I can see the kitchen from my bedroom and there's a distinct lack of any activity going on...I can see the bloody espresso machine is not even switched on to warm up...jeez!, I'm going to have to get up and make my own bloody breakfast yet again.
😀
I couldn't dream of borrowing money for a car and the thought of it breaking down before you've even paid for it. My 05 beemer will be kept till it exhales, it is a bike, building materials, manure, surfboard and people mover and currently it is performing the role of tutor in Spanish. Not bad for a cheapie.
One of my cars (a minibus) was 10 years old when I bought it, and I was able to do so with cash I had saved up. Seeing as it a family adventure vehicle, I sits on the road unless absolutely necessary.
My other car is a 10 year old VW Polo that was given to me to use for work. It works, costs pennies to run, and I can carry a bike on the roof when necessary.
On the Polo I probably do 5000 miles per year while the bus does roughly the same, but the type of miles are different. To keep fuel costs low, we use our massive Tesco fuel discount to fill the tank, meaning that, even when the pump prices are high, we would spend a max of £100 per month.
I have never, and would never, buy a car new (or anywhere close to new), and I try to use what I have as little as possible.
I think everything translates to approximately 4.5% of my annual gross.
Currently in an Abarth 500 2010 which is worth approx 8 weeks salary.
I would rather live in a half decent house in a nice enough area with my 5% of gross income car outside than live somewhere ropey with a nice expensive car.
I could afford to spend more but would rather spend the money on necessities. Like a new bike. Or new golf clubs.
It looks like most of STW has a similar attitude to car buying as me then. It's just the rest of the demographic that have new cars. I'm glad they do as someone needs to buy the new cars for the rest of us to buy off them 3 years later.
New (to me) second car this year.
Cash came from savings and equals 10% of combined annual income.
Our other car was also brought from saving and equals 20% of annual income. Which is the highest we ratio we would spend at. Considering the car it got us, there is no reason to buy anything more expensive.
I'm sure we could probably haggle more if buying on finance, but I'd rather just be done with the buying process in one hit.
My van (when I bought it) was 50% of my annual income (£10k of £20k). However, I have no mortgage and fully expect to run it until it becomes uneconomic to do so.
However, I've never really been into cars so I see them more for practicality than anything else. Some folk appreciate the design, engineering etc and so are willing to pay a lot more. If they can afford it, I see no problem in this - it's just that their priorities are different to mine. I'd rather have a shitty motor and more free time than have to work to keep up payments on a car.
My car .... 1%
A beaten up Golf Gti that I've had for 10 years... the nearside rear passenger footwell is just that ... a well.... it has a permanent puddle in there during the winter. I only use the car for Wickes or tip runs.
The family car is a bit nicer but I'm still in the "a car is a tool" camp.
As above, a lot of them are on lease deals. You can get some pretty fancy cars for £400 a month. Some folk think it's really important to have a nice car, or they just enjoy it so the £400 seems like good value to them. That's not the way I see it, but a lot folk would think it crazy to spend thousands a year on bikes when a £100 BSO will do just fine.
Mine is worth .008% of my income!
16yr old Octavia and it's worth £180 trade-in according to Autotrader (in good condition, which it isn't!).
My wife has a new Panda though, we consider the £100 a month PCP for a reliable new car cheap motoring.
Van and 50%. 7kmiles per year. Will run it for as long as viable. I have no need, nor want a flashy car. I rarely change vehicle, the current one being my 3rd and I'm nearly 40.