How do lots of people afford the brand new luxury cars ?

Ev’s with current tax breaks,soon to disappear are the exception at the moment.

@WaddleAway

Our new car is far far cheaper as we’re leasing an EV and the tax breaks are huge.

Out of interest, how long do you think the tax breaks will last. There are already increases announced on BIK values of EVs. The tax breaks are only temporary to drive people to move to EVs but won't last forever as the Treasury needs the revenue generated from vehicles.

Same here - we got our car when it was 2years old and 10k on the clock. Brand new it would be £40k.
We could have bought it outright and still have money left over but preferred to have it in the bank for a rainy day, rather than having to sell the car to finance emergency payments.

Increasing interest rates could well burst the bubble of "cheap" car leasing.

Already, a car subscription firm, Cazoo has been reportedly ending contracts early, maybe partly because of higher interest rates and partly the current high value of used cars.

If something looks too good to be true, it probably is!

cardealermagazine.co.uk/publish/used-car-dealer-cazoo-terminates-customers-subscription-contracts-early/278999?fbclid=IwAR3ukE7VHmzfqyR0uJMYSAeWwUbycIDS3FlVD4kjsOjxQCWc6SGfapZWs4Y

Saver rather than savings accounts are higher interest as limited. Club Lloyds is 5.25%

That particular one is the Barclays Rainy Day Saver, but there are others offering similar rates.

Which savings account is that? I want one!

Exactly. Our mortgage is 1.48% for the next 4 years. Our Barclays savings account earns 5%. We’d be silly to put any extra money into our mortgage.

We’ve just come to the end of a 4 year lease. Our new car is far far cheaper as we’re leasing an EV and the tax breaks are huge.

The same applies to cars. We debated when we ordered the one that’s taking ten months to be delivered if we should pay outright but the money’s doing very nicely in our investment account and the pcp is at a very low interest rate so leaving the money where it is was a no brainer.

You can buy secondhand on PCP as well. We had one

Credit is not necessarily bad, buying outright is not necessarily good.

People just need to inform themselves as to the best way to finance what is, for most, an essential purchase.

I guess what happens with monthly payments of any kind is the thinking of ‘in for a penny in for a pound’. If you started wanting to pay £300 a month and that only got you a ford fiesta then the extra £50 to get a land rover doesn’t seem like such a big step and you can justify it due to how much more value you are getting. Those are hypothetical figures btw.

and yes to the PP who said that some people might be shocked on renewal as lease prices have gone up. As I said previously, I took my spend on the new car I wanted plus service deal, got a resale figure after one year using a figure at the lower end not assuming a private sale and worked out the monthly cost. I thought lease was marginally cheaper until I realised that the insurance and service wasnt included which I thought it was as everyone talks about simplicity (also tyres and consumables like wipers) and, the big one, all the headline figures are for very low mileage, 5k iirc. So, I’m no idiot. At my lower end of the market leasing came out about the same or a little more.

PC bloody P.

Which is entirely designed to keep car manufacturers in business by persuading a load of people that they need a brand new car every three years. It’s an environmental disaster and a financial con.

I think we also can't compare cars 15-20 years ago which lasted ages. There is still lots of Ladas and Skoda 120s happily driving around.
The never the cars the more electronics etc they have in. I don't believe that most cars made in 2023 will have same possible lifespan like 90s or early 2000s cars tbh.

Kind of like mobile phones. I still have nokia 6131 which works. I also have 5 dead smartphones by now😂

I’ve got a mid range VW on lease.
Leased it for 4 years from brand new in 2019, which included free servicing. I’ve just been discussing getting another new car of the same type and yes, it has gone up since 2019, but only by £70 a month. I thought that was quite reasonable. it’s been fabulous having everything taken care of and driving a new, problem free car.

Previously I owned a car I bought outright when it was about 5 years old and ran it into the ground pretty much, driving it until it was ancient and the gearbox went, so pointless replacing it.
I hated having an old car. Nothing to do with the optics, it was just constantly having issues and it was an unreliable pain. I will never drive an old car again.

DH has an electric car we bought outright, as both me and DH need to drive for work. But for me, I’ll be leasing new cars as long as I’m working and can afford the monthly payment. So hassle free.

My car is over 12 years old and has done over 150k miles. I bought it for 4k and I've spent about 3k on it over the years. I think that's reasonable.

They are comparable in quite a large parts of the country price wise. Well yeah ok it's not luxury house for 50-80k by tbh nor is the car.
I really think luxury starts on 80k+ for cars. Then you have just cars and then budget cars.
@Blossomtoes was right imho
Our car even appreciated in value😂

As I have said recently, it is going to be a shock to alot of those people renewing their lease deals due to a perfect storm of supply issues and interest rate rises. Huge rises in monthly payments.
There is a reason why our friend who ran and owned one of the biggest leasng companies in the uk cashed out for a couple of hundred million. And that reason is not because leasing is to the advantage of the leesee.

Is it,no shit sherlock, i shall be able to sleep well in my bed toniight, thanks.

High incomes, or two average incomes with sensible outgoings.

Some live on debt, blow up inheritances on fancy stuff or have side income

I used to agree with this but we live in funny times right now.

I bought my car outright. Cars are my thing and I put away money each month until I can buy what I like. I usually do this saving over a 12 month period and am
pretty frugal otherwise. It is where I invest my money (plus louboutins). I used to change my car yearly. I have had Range rovers, Audis, mercs, bmw, a Porsche…
The car I currently have isn’t available in England (I’m not in England), and I bought it new in Jan 2020. Since Covid, the price of my car has increased and is actually worth more now than what I bought it for new. This is the longest I’ve ever had a car and it’s a flipping Toyota (200 series Landcruiser)! LOVE it! Best car ever!

I would have never ever predicted I’d fall in love with a Toyota and that it’d make me a profit.

On the mortgage front, it's not always better to pay it off if you're earning more on the money elsewhere. Ours is interest only and we're currently on a 5 year fix of 0.99%. The last year aside, our investments typically make 20-30% a year. Or you could get around 4% on a one year fixed savings account at the moment.

A random aside but it's a topic discussed often on MN and it's not necessarily the best option to pay off your mortgage if it's a competitive rate of interest.

We buy ours outright. I'm an accountant so can't bring myself to buy new because of the depreciation so they're usually 2-3 years old. They're still quite expensive though you often get lots of extras if you look around.

We keep them for 6-10 years and haven't found the maintenance expensive, plus you have the asset at the end. However I currently have a Range Rover Sport and feel obliged to spend £120 per month on the warranty as it breaks constantly and spends a lot of time in the garage.

We are retired and have a lot of disposable cash so buy new cars outright.