Even moderately expensive cars..how do people afford them?

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  • Even moderately expensive cars..how do people afford them?
  • allthegear
    Member

    Most of them are company cars?

    Premier Icon footflaps
    Subscriber

    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….

    Premier Icon andytherocketeer
    Subscriber

    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,…

    lodious
    Member

    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.

    warton
    Member

    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 🙂

    Premier Icon footflaps
    Subscriber

    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….

    bikebouy
    Member

    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.

    b r
    Member

    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.

    Premier Icon dannybgoode
    Subscriber

    @footflaps – you mean the Range Rover Clitoris (because every c***’s got one…).

    Cheers

    Danny B

    Premier Icon footflaps
    Subscriber

    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.

    Premier Icon binners
    Subscriber

    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

    Premier Icon tonyg2003
    Subscriber

    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.

    warton
    Member

    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 sell drugs.

    FIFY

    djglover
    Member

    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.

    lodious
    Member

    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.

    MrSmith
    Member

    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.

    Premier Icon footflaps
    Subscriber

    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

    🙂

    d45yth
    Member

    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
    Too true! I despair for anyone who feels the need to get £££££’s in debt for something like a car. Especially the ones who don’t do thousands of miles a year.
    I can’t knock anyone who does have the cash though and are buying because they like nice things…earning a lot is ‘VERY’ different to having a lot of money.

    Premier Icon footflaps
    Subscriber

    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.

    peterfile
    Member

    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).

    warton
    Member

    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, needed 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.

    brakes
    Member

    it’s their money/ debt – let them do what they want with it.

    djglover
    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

    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.

    Premier Icon Northwind
    Subscriber

    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?

    agent007
    Member

    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 ‘Cock Chariots’ 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.

    freeagent
    Member

    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…

    MrNutt
    Member

    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!

    shooterman
    Member

    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.

    b r
    Member

    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.

    +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.

    surfer
    Member

    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?

    Premier Icon binners
    Subscriber

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

    Premier Icon jamj1974
    Subscriber

    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

    Premier Icon smogmonster
    Subscriber

    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’. 😉

    slowjo
    Member

    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!

    Premier Icon smogmonster
    Subscriber

    Im after a new motor, i earn a pretty decent wage, and fancy something like an Audi SQ5, but looking at the price, its £45k….which has me thinking, how the hell does anyone afford this sort of car? Frankly even something at half the price, if you buy over say 3 years, is still over £600 a month, and lets face it, that barely gets you a Mondeo.

    So my question is, what am i missing? I cant imagine ever paying over £600 out of my wage each month, never mind double that…enlighten me please.

    wrecker
    Member

    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.

    stumpy01
    Member

    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….

    MrGrim
    Member

    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.

    Premier Icon scotroutes
    Subscriber

    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.

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