Does "everyone" really buy their posh cars on credit?

[Bottleplant]

Or using some sort of lease arrangement?

A colleague recently bought a £30k car and paid cash. Our boss, (privately and I guess unprofessionally) was having a little jealous bitch about it saying who earth pays cash for a car.

Now, I wouldn't dream of telling anyone such details about my financial situation and I earn less than either of them, but I have a broadly equivalent car and I've never had a car on credit in my life.

To me it seems odd to "buy" a luxury car you can't afford, which I would consider I can't if I can't pay for it.

I understand sometimes people will need to get a car for work etc by whatever means possible, but I was surprised at the suggestion that it's what "everyone" does.

I have friends who have spent over £75k cash on a car.

People have differing financial situations, I wouldn’t really be interested in how anyone financed their car.

A really good value approach is to buy a cheap new or used car, and keep for a long time. Cheaper cars generally suffer less from depreciation, and over many years it's relatively good value.
Quite often a 3rd party hits your car causing cosmetic damage, that can write the car off economically. You can buy the car back from the insurance company and keep using it with the dent whilst getting 70 to 80% of the value of the car back!

I'm pretty sure most Ubers are category n write offs. Worth nothing on paper, but decent cars.

New cars are much more expensive than they were a few years ago due to increased complexity due to safety and emissions regulations. Also the dreaded first year road tax surcharge. So I'm keeping my car for as long as I can.

No. We spent £50k on one car and then £65k on another. However we have had the first for 9 years now and the second one for 6. We may change one before the supposed 2030 cut off (upgrade again in cash) but the other we are planning on driving into the ground.

I don’t view them in my monthly assessment of assets (I know they are but it’s such depreciation I may as well right them off) and certainly wouldn’t waste interest payments on them

90% use some form of finance - biggest lending market after mortgages. According to bbc.

Most car finance is not 0%

We paid cash for both our (high end and expensive) cars. If you have the cash then why use finance and pay interest?

Always cash but trade in so not 40k in one go.

We had a 69 reg golf that we px’d my little runaround towards and paid the rest from savings. We’ve since sold it privately as I qualified via PIP for a Motability vehicle, we picked an electric car.

The levels of consumer debt, car-loans, and general unsecured loans in the UK is shocking, with a very low savings ratio when compared to other Western European countries.

For all those still punch drunk on PCP buying cars that they know they can never own outright, I very much hope that neither they nor their partners get ill or lose their jobs, as those forever monthly payments won't look so manageable then.

What stocks earn 20% per annum??

Loads of people I know do because cars are upgraded every 1-2 years.
May as well just be a monthly payment when you are changing the car so frequently.

Why? That suits you but it may not everyone.

There is truth in that. I buy my iPhone on 0% interest - why would I shell out 1200 in cash ? I've done it with furniture too.

But it's not always an expensive way of doing it . That's the point. I bought a car , kept it for 5 years and then sold it. I paid for services. Calculated that and the " loss" per month is the same amount as the amount paid on a new leased car where we got a replacement car if any issues and all services. That deal worked for us.

Yes, car financing is extremely common. But I will never understand why the mumsnet consenus is that a car on finance is terrible and irresponsible and a waste of money. People can spend their money how they choose, everyone has wildly different ideas of what a waste of money is.

We pay cash and buy sensible cars which we keep for a good number of years. We’ve passed one on to our mid 20s DD so she’s got something safe she can afford. Three Toyota Corolla touring sports hybrids between us now. They’ve got 10 year warranties and so far no problems with any of them. I think they’re just over 30K new now but weren’t when we bought them.

Also, users on here are always on about buying used cars and running them into the ground - this is all well and good when your mileage is fairly standard, say 10k a year. My DH does upwards of 40,000 miles a year - he needs something extremely reliable, under warranty, with a service package so tyres can be changed regularly etc, and as he is in the car so much, he wants something comfortable, with all the latest safety features. Not hard to understand!

I don’t think it’s about having a luxury car, it’s more about the value / process of getting a car. Most people don’t want to buy one car and have it for 10+ years. If you buy a car for 20-30k then by the time you’re done with it the resell value will be less than half. So you might as well lease it on 0% - it feels like an operational cost. If you’re then deciding on what car, then the difference between a Dacia and a VW feels like nothing monthly.

Most people who buy cars at almost all levels do so using some sort of finance deal. Objectively, using expensive debt to purchase a depreciating asset is the definition of financial insanity and we would all drive round in second hand Toyotas & Hondas which we buy outright, but cars are status symbols so…

The main exceptions to this tend to be cash-rich retirees and very wealthy people for whom £250k+ for a new Bentley / Range Rover / Aston/ Ferrari etc is not a lot of money. The car is just one shiny toy among many.

over the past 15 years we have had a car on a PCP. In my opinion for a lot of people in their 20s and upwards this is the best solution. You get to try out the car for three years, keep it and pay the remained if you like it, or if it is not suitable for you, you can exchange it for something else.

Our needs changed considerably & each time we have had the option to change for a different car. Also, the car is pretty much always new so it doesn’t need any large upkeep/ mechanics fees.

I’ve never ever paid for more than a service in the past 15 years. This in my opinion out weighs the benefits of purchasing a car outright, and then having a 10-year-old old banger and have a load of money down a black hole with mechanics. I also have a friend who almost had a knee fatal accident on a motorway in a relatively old car. I don’t really trust anything over 10 years old on a motorway.

I know various people driving 10-year-old Audis they bought outright cause they thought it would look good, but at least annually they are paying a fortune in mechanics fees and expensive replacement parts.

Buying a car is the most expensive purchase ever because you'll never get your money back. Why are people surprised about this?

I don't understand people talking about leasing because of depreciation. That means just paying hundreds every month for nothing at the end. If you buy outright (or even finance) at the end of the same period of time, eg 4 years, you'll own it and no further payments.

I think leasing is the most expensive long term. I just did the rough maths: leasing my car for 10 years is 10 k more expensive that buying it. And it "only" cost 24 k. (Or am i missing the point that leasing is cheaper than buying a new car every 3/4 years

I bought my car with very high deposit and 3.5 % interest (special offer). I intend to own it for at least 10 years.

Also buying old cars is not cheap anymore and it like the game parcel the parcel. At some stage the music is going stop and you have a money pit on your hands. Been there done that. Still traumatised!

Bought our xc90 cash- the garage was most put out that we didn’t want a finance agreement. Must be a good earner for them

DH car was leased for a few years and then we bought it. My car we own outright.
Amongst friends it’s a mixture of leased vehicles - often through work schemes - and owned outright.

Yeah our £55k+ car is on finance