How do people afford to PCP brand new cars?!

[JusWunderin]

DH recently mentioned looking into us getting the car I’ve had my eye on for many eyes now. But we’ve looked at prices for financing one and my good god alive it’s not what I expected!

I’m struggling to imagine someone having £400 a month to comfortable pay for a car, we had a budget of about £200 a month.. which I thought would get me something pretty nice!😂

My heart is a little sore, I’ve never really had anything ‘proper nice’ we don’t buy anything designer, branded/luxury. We live modestly, both work full time in what we thought were good jobs on relatively good money for where we live. this car was the one thing I just thought would be my little bit of luxury in life.. but it turns out it’s quite far out from ‘a little bit’ of luxury 😂 it’s big luxury and now I’m pretty gutted as I can’t imagine us ever having that sort of money to fork out every month for a car 😅

If you lease/brought a brand new car recently.. how? What job do you do? How much do you earn (if you don’t mind me asking)? I need to know where I’m going wrong 😂

You do realise that ‘owned by Ford’ more often than not means leased to a daily hire company by Ford for 3/6/9 months and returned before they get to their first service? Yes, some are ‘management’ cars (where management means anyone employed by Ford) but most are fleet.

Most German stuff these days is shit, they wouldn’t know build quality if it punched them in the face. Long gone are the days of solid built, quality German cars. Don’t get me wrong, I love a BMW M car but I don’t expect reliability, if I wanted that I’d buy a Lexus.

Agree with PPs - buy 18 months or 2 years old - new cars lose so much money the minute you drive off the forecourt. And pay by bank loan.

Unless you earn shedloads and needs a really reliable new car to drive 1000s of miles all over the country, every year, you don't need one of these three year lease deals.

Cars to buy, and subsequently leases / PCP, are a lot more expensive since covid, but tbh I find it insane that you think you could get a luxury car for £200 a month, even before that!

Back to the OP, how do people afford expensive cars on lease / PCP? They could be company cars, or have a car allowance, or, they’re just financially reckless and can’t really afford it….. I’d love a really nice car and technically “could” afford to spend £400-500 a month on a car but I refuse to.
Id much rather go on a nice holiday a year and put the rest into my savings.

I have friends who pay more for their car than they do for their mortgage, and they don’t even own the car! The mind boggles. But I guess different people have different priorities!

People are daft enough to covet cars just because they have a badge on them that says Mercedes (sorry) and get into debt for it.

Sorry OP, but just buy a decent car - why pay double for the badge? I've always had Kias and they never let me down.

Very few people ‘need’ a new car, but then again no one ‘needs’ expensive shoes, bags or clothes. But they might well want them and comfortably be able to afford them.

And let’s be clear, if no one bought / leased new cars, there’d be no secondhand cars for the less well off or interested to buy. So I struggle to see why people are so sniffy about how other people spend their money!!

I have always said both of these things.

For me, takeaways and meals out are a complete waste of money because food is just energy, just like cars for some are just transport.

I got a brand new car a month ago. Didn't do finance as we did with a previous car and the interest is crap. We did HP previously as wanted to own the car. Got a bank loan to cover but had a large deposit as previous car was stolen and so had a payout from the insurance company. Paying £400 a month but that was part car part consolidation with a previous loan so we didn't have two loan payments.

Don’t believe in PCP, bought a fairly new car 2-3 years old luxury brand outright. Cost about £30K and £16K for our respective cars, but very happy with it. Much better than taking car on finance.

And to answer your question household income 100K plus.

I just got a new car. I traded in my previous one which was 10 years old. This one is a new Volvo SUV. I got a decent discount on it and it’s gorgeous. I was able to put a large deposit on it (about 65%) from my pension savings and I’m paying the rest off on 0% interest. I wouldn’t have considered HP or a bank loan, as I hate paying interest unless it’s really necessary. I think PCP arrangement are a rip off, so wouldn’t ever consider that either. I am not keen on paying £397 per month, but as its interest free, only over 3 years and includes 3-years servicing and is affordable, I’m okay with it. I’m 65 in a couple of months, so this may be my last car. I have never had a ‘luxury car’ before and I figure since it’s as tough as old boots, should take care of me as well as any car can in the event of an accident (in recent years, I’ve become nervous on motorways) and keeps me very comfortable with its heated seats and heated steering wheel, I can justify the cost.

So yes it’s £400 a month, I don’t have a large income, but I don’t drink, smoke, or go out much, all things considered, I’m happy with the decision.

Thank you but I'm not convinced they will pay out if a tyre prematurely wears out due to your negligence/ignorance when the tracking is off, but good luck

We never keep old cars as they may look cheap but cost a lot in repairs - they tyres on our cars cost us loads and two have 20 inch very wide tryres and one has 22 inch

looks like you have a good deal, good luck

Honestly it can depend on the make of the car, but with all the cars we have had its always been cheaper to keep them long term and repair than change the car. I always say a reliable car is one you know the history off and has been well maintained. We have had about 3 call outs by breakdown in over 25 years. I've had friends who have terrible problems with brand new cars.

Cars are just money pits anyway, you will always lose money on them and if you buy brand new you'll lose a lot just driving it off the forecourt. Even going for a nearly new car saves you £££.

Where I live only drug dealers drive mercs 😂

get a good car a couple of years old. Let someone else pay for all those optional extras. I have money enough to buy a brand new car , but I wouldn’t dream of it.

The value of the car depends on what it is. I sold a three-year-old car I’d bought new for £13k more than the balance of the finance. I bought a brand new car last year which is now worth £5k more than I bought it for. I even sold an eight-year-old truck for only £7k less than I paid for it, in in those eight year, it didn’t need a single penny spending on it.

Several people have said about the number of people driving/being able to afford to have nice new cars, but they're are some of us who DO have lovely new cars, but wouldn't necessarily be able to afford them but for our unfortunate circumstances, which yes, I know sounds a bit weird, unfortunate circumstances mean you can have a brand new car??? Let me explain...
I'm disabled, and can't work, so I exist on benefits (which in itself is difficult to manage), but I get a brand new lease car every 3 years. It costs me nothing personally (it's paid for by the DWP), other than the required deposit (which can be nothing, or run into £1000s, depending on my choice of car).
I'm almost sure to exchange my car for another new one, but might be keeping this one for another year or two because the deposits have absolutely rocketed this year. The perfect example, my current car's deposit was £500, if I exchange it for an identical one, just with a 24 plate instead of my current 21 plate, the deposit is almost £4k!
I've had several people over the years say to me that they're jealous of the fact that I'm entitled to have these brand new cars, and I've responded by saying that they're welcome to have my car, as long as they take my ever worsening, life-limiting, horribly debilitating disability along with it!
I would gladly drive a 15yr old banger, if it meant I'd be free of this horrible disability.

Haven't RTFT OP but many workplaces offer good deals. At mine there's some sort of tax advantage too.

In 2021 we got a brand new VW Tiguan for £360 a month with a £1000 deposit. Now a second hand one (2021) with the same deposit is £550 ish. Interest rates have obviously made payments skyrocket. I do a lot of driving so a car with a decent warranty etc is worth it, plus I like cars and spend a lot of time in it so it’s my little splurge.

There’s usually more room to negotiate at a dealership on new cars than second hand as manufacturers give them bonuses based on new car sales (and fine them in a car is ordered then the sale is cancelled I believe, so they’ll especially do deals on cars that have been ordered in then the customer cancels before they’re delivered)

Sorry to be a twat @JusWunderin, but it's "bear" it. Bare is exposed, naked etc.
Good luck with your car hunt. Definitely haggle. When we got out last car (inheritance) we had cash and my husband pitched his offer, said we've cash, then just sat in (excruciating, for me) silence. Worked a treat.

@taxguru When you ask, they tell you they don't haggle these days and it all has to be list price, but when you walk away, they tend to start talking!! I think the industry as a whole is trying to get away from the old haggling image, but when it comes down to them having to hit registration targets to get the very valuable manufacturer bonuses, they'll talk!

Not sure they all do. I recently visited a dealer and hi (gloomily) told me he would give me a test drive etc but he couldn’t negotiate. I had to either order myself online or he could help me. This was a Ford. Previously I’ve never been precious about when I changed my car so I’d let them know I was interested but just let me know if they had any deals on, usually at end of year or quarter. Over time I’ve had some amazing deals but seems harder now. However, I haven’t had any end of quarter experiences and not sure how it would work now.

The reality is dealers almost expect you as a private buyer to PCP. Over 90% of new sales are PCP so when I said I’m paying cash via bank transfer they were gobsmacked and also not happy. PCP ties you into replacing the car at a fixed point when the deal may not be very good so for this reason I don’t use it at all

When I worked , my company car cost me 700 a month in tax., that also included private fuel. To me it was worth it to drive a new luxury car replaced every 3 years. Some people pay closer to a 1000 for the privilege. When I retired I bought the car and we still have it, still looks perfect 3 years later and still only done 60k miles.

I’m with you OP. I don’t get how people do it. Am still driving my 2010 Fiat 500 aged 40 looool and to be honest I really don’t see why people care about new cars. Mine is so cheap to run, tax is £25 and I can do hundreds and hundreds of miles on a full tank!! I earn a good salary but the price per month for a new car just seems like a waste to me 🤷🏻‍♀️

Our Ford Focus has all those features too. And a heated front windscreen.

Yes, we do.

For most people, cars are little more than status symbols and PCP exists for people who can't really afford the car they want to just about squeeze into it for a few years until the cost catches up with them.

@Notthatcatagain where are I am it's taxi drivers in Mercedes.