for treating financed cars as unaffordable?

🙄

No it isn’t - depending on what you prefer. I now lease my car and have done for 10 years after driving round in second hand cars that weren’t very reliable. I really enjoy driving a comfortable, reliable car as opposed to worrying about breaking down constantly. After breaking down in the middle of winter with a 3 month old in the car with me, I vowed never again to be in that position. And yes, I know new cars can break down but it’s less likely. So I set my budget, and stick to it. Some people think nothing of spending £3k on a designer handbag every year - I prefer to spend that much on a car each year. It’s not depreciating in value because I’ve never owned it in the first place!

Yes we’ve gathered that. Keep up

If you pick reliable cars, buy around 3 to 4 years old, you can usually drive them for about 6/7 years before you have any major issues. I bought a Volvo V60 in 2021, it's a 2017 plate. It cost £9k, which I paid half up front and half on a 20 month interest free credit card. So £225 a month for that time and no interest paid. It's had MOT service every year about £200, new battery and tyres. So it's wayyyy cheaper than a lease, reliable and comfortable. I'm saving up at the moment and I'll do the same in a few years time, I'll probably need to spend around 12k this time as second hand prices have gone up loads. It's worth about 5k now privately/4k part ex, so if I did want a newer car now I would be funding 8k myself.

What do you mean , never own your house outright? Of course that’s not true.

Haven't you just contradicted yourself though?

If someone is concerned about depreciation of buying a car then there's some logic in leasing one instead, particularly if having a new car is something that matters to them.

Also I think it's possible to overthink it - 40% of people in the UK have less than £1000 savings. 16% have nothing at all. Many people might prefer to buy if they had the choice, but they don't - they can't afford to buy a new or even second-hand-but-decent car, and either also can't get enough 'normal' credit (either already in debt, just don't earn enough, have already used it on other things, or whatever), or just think if they're going to take out a loan anyway they may as well do PCP and don't have to think about insurance, MOTs/services, maintenance costs, etc. on top.

They're not choosing leasing, it's their only option.

The fancier and more electrical engineering in newer cars are making me want to buy exclusively 20 year old Volvos every few years.

If you look after your (older) car, it will last. Ours are 18 and 21 years old respectively. One has done just under 200k miles and the other is about 170k. They’re serviced and fixed and looked after and both run well. They also don’t cost £600 every time it needs plugging into a diagnostics machine when a light comes on that you can’t access because it’s sealed behind a dashboard…

Agreed. I’m not a car person and would rather slam my head against the wall repeatedly than have to go buy one and my husband sees car shopping as a hobby.

We learned early onto make some ground rules.

1. no more than 1 car payment at a time
2. All new car payments (or significant cash spends) need to be mutually agreed on
3. He took over car maintenance and I don’t bitch or moan when he spends money on preventative maintenance or repairs.
4. As long as #1 & #2 are adhered to I don’t comment on his car buying

What this looks like in practice is that has bought and sold multiple trucks in the last 15 years and I hav had 1 new (to me) suv in that same time period. My choice about my vehicle as it’s in great shape and I’ve said I’ll drive it into the ground. With one exception he trades in his current at the time vehicle for a new to him on with less than $500 cash being spent. Works for both of us!

Cars are a really simple thing.

You either like them and choose to spend money on them or don't like them and spend as little as you think is necessary to suit your needs.

Some people like objects others like to spend 20k a year going on holiday.

That's why we did it. It seemed a reasonable price. Especially as we have no mot ans it's under warranty.

Second hand cars are much more than when we bought our previous one 6 years ago. Coincidentally, that car (we own it outright and have it still) hasn't depreciate as much since we bought it. We again had a stroke of luck and bought it just before all the chip issues and prices sky rocketed. It has been a pain in the bum though. Extremely low mileage, ex mobility car and after a year the gearbox went. Cost thousands to repair!

I would only lease again if we could find a similar deal on a big enough car but we don't need a 4 by 4 or suv and we're not into luxury cars. Holidays on the other hand, I like to spend on and you could argue that leaves you with nothing in your hand too.

The car I had before this one I loved so much and I had it for 16 years and paid 12,000 at a year old. It cost me only servicing, tyres, brakes, springs and a new battery.

My latest car, also bought used was 13,000 and I've had it 7 years so far. This year it needed around £400 of repairs and any other costs have been usual things. I would like at least six more years out of it.

Between them I've had 23 years of car ownership so far for £25,000 plus a bit of maintenance. These were not small runarounds but not status cars either.

I've just bought a 3 year old second hand car. I did technically have enough to buy it outright, but that would have left me short of money, and the car was a good deal so I didn't want to lose it, plus my old car wasn't in great shape. So, I got a few thousand on finance which got me 2 years servicing and roadside assistance instead of the standard one year. I'm expecting to receive an inheritance soon and I plan to pay off the finance then. I'd never get a lease car. I want to own my car, even if it is a depreciating asset.

That was nearly four years ago, I’ll have to dig it out. Probably not a bad idea anyway. Thanks for the info, it’s giving me the kick up the arse I need

@Davros your balloon payment will be in your paperwork, it’s declared up front.

@Youraveragelass mine is a small engine VW polo, manual. I can’t remember a big deposit and I don’t think there will be a big balloon payment. I hope I don’t get an unpleasant surprise but I doubt it.

We buy new and keep for 10 or 12 years

That doesn’t really his question though does it? They still afford it

the answer is they just have more money

I just looked up mine, it’s £240.96pm. Finishes end of march so I need to decide what to do. I can afford to buy something modest outright but we will see…

Ok thanks

Personally I would hate the monthly expensive commitment and have always owned cars outright.

But I am quite lucky that my DH is excellent at maintenance if/when it’s needed.

I bought a 10 year old car last year with very little mileage…bought it for 8.5k cash. It was fine for about 2 months then gave me nothing but trouble for a few months. Spent 300 to get it fixed. It ok now but the gear stick gets stuck at times. Drives me nuts. And it’s an absolute petrol guzzler. For these reason and numerous others I have decided to buy a new, hybrid automatic. They are taking my old car and giving me just over 4k for it. I’m paying 29k cash for the new one. Some may say this is insane but I’ve had enough of second hand non trustworthy cars. The one i mentioned is not the first to give me trouble. Some people do choose to pay upfront for their cars. Someone has to I suppose 😅

I’ve always had old second hand cars, basically with what I could afford to scrape
together, as indeed has DH.

Worked fine until we poured all into a house move this summer, both our cars basically died within 3 weeks of each other, and of the move, and we just didn’t have the cash to buy 2 half decent cars.

I ended up getting one on finance - I’m not thrilled about it honestly but I can easily afford the payments - I just did it with a bank loan rather than car finance as the rate was better. It’s still a second hand car but much nicer than previous ones I’ve had and I’m really enjoying having a decent one for once. We’ve no other debts and are mortgage free so this is working out ok for now.

That’s not true, with a mortgage you own the house. Same with a PCP car, you own the car. Like a mortgage it’s a secured loan, you don’t pay your mortgage you lose the house, don’t pay the PCP payment you lose the car. You’re still the owner though.