Why do people on limited incomes choose upmarket cars?

[SirGawain]

Not really an AIBU, nor a criticism of peoples lifestyle choices, but I'm genuinely curious.
I live in an estate of mostly starter type homes built about thirty years ago. Many of the houses have been aquired peicemeal by different housing associations. The neigbours are generally very nice and most seem to be employed in decent, if not well paid, jobs.
As they are living in housing association properties I assume that they are not particulary affluent. What puzzles me is that the car of choice for many is a BMW or an Audi. Why would people spend there money on an expensive car which depreciates rather than investing it in a homes which will rise in value?

Because they're financially illiterate. That applies to a lot of people though. I know people who say that they cannot afford the deposit for a house (5% here), but will piss money away on expensive cars and alterations etc. Or on holidays to Europe (a 24 hour flight from here) etc.

Here, you do have to be skint to get a housing commission property. They are few and far between now. So, yes, I would be judging someone in a housing commission property if they were driving a new expensive car.

Lease, lease, lease

I'm working class. I have a good job for the area of the country I live in and have a decent wage with lots of disposable income. Since I learned to drive I've had cars about 10 years old and got by fine.

My work have a salary sacrifice car scheme which gives me a brand new car every three years on a just add fuel deal, I pay around £250 per month from my salary and drive a brand new BMW 118i. And I will never pay for a service or a tyre, it's only petrol.

Sometimes people get deals like this. I'd never have had one otherwise!

I know what you're getting at OP
I agree too, it's almost as if people want to try and imply to others they are slightly above working class - almost middle class -but that assumption really does catagorise the working class mindset.
Basically ten bobs to us and an annoyance to the upper classes.

To be honest, I think it's far more a middle class mindset to want to appear better off than they really are.

At least some of them will have bought their HA home several years ago and seen their salaries increase in the intervening years. They've now got more disposable income but like where they live, or just enjoy buying nice things with their spare cash and have no interest in increasing their secured debt to move up the housing ladder.

I don't really agree with the implication that people are making poor choices. Older generations seem to think that the only sensible thing to do with money is sink it into property, but there's definitely a case for just enjoying life, spending what you have on the things you love, and just generally remembering that you only live once and can't take it with you.

Is it a priority thing? I drive cars that are 10 years old, I'd rather put my money into paying off my mortgage/childcare/nice food/holidays.

250.00 per month = 9K over 3 years.

20K initial value - 50% over 3 years - 10K,
so you got a fair deal.

Much depends on how much they actually bought the car for, and if you paid a deposit or not.
The servicing and tyres will be based on your estimated mileage and built into the price.
Did you pay a deposit? any balloon payment at the end?

We buy nice cars because they don't depreciate in value as much as cheaper cars. Our house is small and maybe it used to be a council house, who knows and who cares. We love the neighbourhood. We could get a bigger house if we want, but we just don't feel the need.

They are all on credit and it’s all about show.

Personally - if you can’t afford to buy it outright, don’t buy it.

The ones that make me cringe are those with the used Ranger Rover Sports and ofcourse in the obligatory black with matching "I'm a wannabe celeb" tinted windows, they finish it off in pure working class style with the ultimate in chav tackiness ...a full sleeve tat.....pure class is that!! Honestly you look classy - lol

Different people have different priorities. I had an old car, it cost me a fortune in repairs. It was cheaper to get new one on HP. (no decent bus service in rural sticks). I'm also happy to rent forever now I'm in London in a nice area, rather than buy in a not great area because that's all I could afford. Spanish Intern at work told me everyone rents forever but n Spain, so she doesn't get UK obsession with property owning.

We are on rubbish income and rent. Our upmarket car was gifted to us, and we can't sell it as the close family member who gave it will be offended. It's a bit embatasing tbh especially as people make huge assumptions about our income based on the car alone, and I suppose we don't feel we earned it.

How do you know it's not a company car? When I was in a corporate job I had some very nice cars. Company cars.

I've always driven other people's cars or company cars. Didn't buy my own first car till I was 45!

People do know that company cars aren't free right? you still pay for them!

I agree with you OP. Me and DH notice how everyone seems to have brand new fancy cars now, no one wants to put up with second hand! There's a couple I k ow, their DD goes to Nursery with my DS, who are always moaning IRL and on Facebook about being skint, I once met her for soft play and bought her a coffee as she only had £20 to last 5 days. They have a brand new Audi! I don't get it and I think it's irresponsible. I also think that if people can afford flash cars they shouldn't be in HA properties, it should be for people who need them 🤷‍♀️

Like a lot of people I get an allowance for a company car (£500 pm) but I pocket the money as my car is paid off. A company car doesn’t mean it’s free, and I’d rather have the money.

Of course company cars aren't free, but many jobs require them or are much easier to do with them. I have a company car because I need a car anyway, and getting a company car frees me from having to go to the office to pick up a pool car, or book a hire car every time I drive somewhere for work, which is generally once or twice a week. We have no car allowance scheme and use of own cars is seen as a last resort and generally not allowed. Massive hassle, waste of time and mental load I can do without.

I don't care about status, my cars a Skoda anyway and I just need a reliable car and to me this is a cost effective, time efficient way of sorting it. If I didn't have a company car, I would have a sub £1000 car that I would regard as disposable if I had an expensive bill.

Old cars are fine if you don't travel all over the country so aren't faced with it not starting when you're setting off to an important meeting 100 miles away, or it breaking down while you're out. I'm not saying old cars break down all the time, but it's more likely.

Over the last 20 years, I've usually had company cars, apart from when I had the PCP and DP has usually bought his own, but I would be fairly confident I've spent no more on cars than him, because his cars have always needed money spending on them, and there's the cost of tax, insurance and breakdown, which I've generally not needed to pay.

What I'm saying is that unless you know the person very well and the ins and outs of their bank account, you have no idea whether their car is appropriate to their means or circumstances. We already own a house that is nearly paid off and plenty suitable for our circumstances. I also have a very good pension and savings, and can afford several holidays a year. We have no DCs so have no university/inheritence etc considerations and I don't give a fuck whether anyone thinks I should be spending more money on a house instead.

Of course some people are spending unwisely on cars, but people spend unwisely on all sorts of things.

(Re renting in Spain vs buying in London - tenants have vastly more rights there, a lot of UK people are 'obsessed' with owning property because the rental market is so shit and expensive, especially in London, I would have thought that was obvious to your Spanish colleague now that she is presumably experiencing it first hand).

I've wondered about this, too. I always think it looks odd to see a new Range Rover parked in the drive of an ordinary 1930's semi. It just seems a bit fur coat & no knickers to me, but then I've never spent more than £5k on a (second-hand) car so clearly don't understand the appeal.

TBF, most of the used "marque" cars we are referring to are pretty much worthless. Our car was recently written off whilst parked up at work. Looking at a replacement I note I could easily afford a so called used luxury car such as audits, BMWs, Merc's etc etc. Yet for the same cash I can't find a "invisible" car such as a Skoda or S-Max.it seems to me that used prestige cars are worthless these days, so people buy then realise the crippling running costs.

I understand saving money by leasing a new car, or spreading the cost on credit, as long as it is affordable.
I don't understand a car being a status symbol though, or how some people think it makes them better than someone else. Everyone on the road, be it in a prestige car, or an old banger, van, on a motorbike or pushbike is just trying to get places safely.
I've chosen my new car, a classic cabriolet, because its fun to drive and I like the experience of driving with the roof down. It doesn't matter to me so much what it looks like, although I am pleased I managed to get my favourite colour :)

I used to wonder this OP as I drive an old banger and have the embarrassment of often being the worst car in the carpark, or at least the least status one! I used to think how come all these people with fairly ordinary jobs can have fancy cars? I get it now, it's due to finance deals. I still don't have a spare £2-300 a month so I stick with the old car which is very reliable and gets me about, but part of me would like a fancier car!

This was like when I wondered for ages how my friend who worked as a carer could afford her large 4 bed rental property in a nice area, til I heard about tax credits/housing benefit.

I've never really understood the fascination with having new cars. They all look tatty and old after a year or two anyway. It gets you from A to B so why lose a huge chunk of your income simply because you can't be bothered to spend an hour of your day getting an MoT certificate for it once a year.

I know someone who works in car finance and lives in a mortgage free half million pound house plus he’s put two dc through private education based on his commission. The tens of millions of finance he handles in a relatively small geographical area is astounding. He himself has a company car and his wife drives a very modest car because he doesn’t want to take out finance himself.