Young people are foolish for leading cars?

[Kitchendrama1]

£2k to get the car and 36 payments of £350 of which you get nothing at the end of 3 years. £14,600 with insurance included, for a car you won’t own for 3 years.

I can understand insurance is high for a young person, but it’s dumb?

I think this is a generational gap and bizarrely also an income thing.

I've always been financially comfortable. I buy a new (or newish) car and keep it until it gets expensive. Therefore you may meet me driving something very new or a 10yo tatty car.

Most of my friends/ family do the same.

Worked out over the years we keep the car it is cheaper than PCP but you have to be able to afford the car in the first place and manage any unexpected big bills.

So it's actually an economy that is only available to those who have money. In addition you have to be secure enough socially to not care that people may judge you on your car.

Cars may be the most reliable they’ve ever been but that doesn’t guarantee a four year old car won’t need work doing to it.

Just because a car needs maintenance it doesn’t make it unreliable. It only becomes unreliable when parts aren’t changed preemptively. I don’t actually know anyone who changes big parts preemptively though so it’s certainly more common to wait for a failure before replacing. Big jobs like clutch, flywheel, drive shaft, timing belt etc do you actually read the manual and change according to mileage or do you just wait for it to die and take the risk.

@MoonbeamSprinkles that is your personal opinion. As you said yourself, the 2nd hand car is already available.
You didn't buy it, because you didn't want to pay the price and believe it will be unreliable. Or did you buy it because you didn't want to wait for a new one?
These are pure economic decisions.
The point I try to make is, if we kept our cars longer, what would the impact on our climate be? What is the difference of 4 new cars v 1 that is already produced over a (say) 12 year period?

The point Im trying to make is, if we kept our cars longer, what would the impact on our climate be? What is the difference of 4 new cars v 1 that is already produced over a (say) 12 year period?

But the cars ARE being kept, they’re just changing ownership.
There’s still a good trade to be had in second hand cars and even really old bangers can be stripped for parts and those parts recycled. None of those 4 cars will be put in the bin.

It’s not new cars driving up demand, it’s people having multi car households and people having cars that they don’t need and taking trips in a car that could be walked or cycled.

It’s not like phones that become obsolete and end up in landfill, cars stay on the road or in the system until they are of no use anymore.

It's worked well for one of my dd's. New driver under 25.

She shopped around and got a newer model Kia on lease paying around £170 a month compared to roughly 350 a month insurance. Paid around £600 deposit and has it for 2 years.

Had she bought an older Kia it was around 9k for the car, 350 pm for insurance plus an up front cost of nearly a grand.

The lower cost has allowed her to put more money into an ISA. When the lease ends she might go down the route of ownership depending on the insurance cost as she wants more than the standard theft and fire. Plus she has the peace of mind knowing if something goes wrong, she hasn't got a potential hefty repair bill, it's not two cars knocked together etc. Plus if she loses her job and cannot quickly find another one, the car cost can easily be covered whereas the insurance would be an issue as although it could be cancelled, many companies charge a hefty fee for this.

When I talk to her later will let her know she is foolish and should have gone for the expensive option of having a car. And instead of shopping around, she should have just got the first deal she saw.

If we all bought a new car and kept it the average lifespan of a car which is 10 years, we’d still need the same number of cars being made than if we did what happens now.

Which is that some people buy new and some people buy those cars second hand in a few years time.

It’s the same number of cars on the road except the 4 new cars are being sold to the same person rather than 4 different people.

Some people are always going to want to buy second hand as in normal times it can work out cheaper.

If they weren’t able to sell the 3 year old lease cars off the garages wouldn’t do it.

I agree with you about phones but cars are a different matter. Cars are getting more and more environmentally friendly with every passing year so there is a big difference between cars being produced now and even three years ago

Emissions rules in this country and Europe have been really strict for years. And even with hybrid/electric vehicles there is no way that producing/shipping new cars for everyone constantly is more environmentally friendly than keeping the same car for 10 years or so.

It makes me laugh when people try to be 'environmentally friendly' by buying a new hybrid car every couple of years!

We lease our car. It's brilliant. We know how much it will cost us a month and don't have to worry about a payment at the end of it. I did have a car on PCP in 2010 and that was a total money pit. I don't recommend that at all.

Also makes me laugh the idea that 4 year old cars aren't reliable! My friends with PCP Range Rovers are constantly at the garage getting issues fixed!

And even with hybrid/electric vehicles there is no way that producing/shipping new cars for everyone constantly is more environmentally friendly than keeping the same car for 10 years or so.

But they aren’t doing it for everyone. They’re doing it for the people who prefer new cars.
If they did it for everyone then the supply of second hand cars in three years would be astronomical, therefore the price would come down and it would be more attractive to buy second hand and the market would reset itself with more people buying second hand again.

At the moment we have a shortage of second hand cars so if you’re looking to buy a car then a new car on lease makes financial sense. Then in three years time those cars will go back into the system and the price of second hand cars will go down and leasing won’t be as attractive anymore.

My friends with PCP Range Rovers are constantly at the garage getting issues fixed

That’s because range rovers are notorious for having issues.
That’s got more to do with it being a Range Rover than it’s age.

If we all bought a new car and kept it the average lifespan of a car which is 10 years, we’d still need the same number of cars being made than if we did what happens now

So if 20 people buy a new car, then 20 will be produced. If the 20 people then get a new car after 3.. 6 ... 9 ... 12 years 80 more cars are produced...
If they don't get a new car and keep it for 12 years, only the original 20 cars are produced in that time period.
Same with 2nd hand, if you buy a 3/4 year old car and keep it for a further 10 years rather than replacing it after 5 years, 1 car less needs to be entered into the supply chain.

This is how we should be thinking. Look at the goods that are already there and replace when absolutely necessary. And stop falling for all all the clever marketing that is tapping into our future earnings.

She shopped around and got a newer model Kia on lease paying around £170 a month compared to roughly 350 a month insurance. Paid around £600 deposit and has it for 2 years.

Sounds like a great deal if it includes insurance. Is it like the Peugeot just add fuel scheme?

I've always bought lowish mileage economic 8-10yo little cars for around £2.5 - 3K and expected to pay several £££s per year in MOT, servicing and repairs. I pay an independent mechanic to give them the once over before I buy, and keep them going for years and years.

Leasing a Corsa at £150 per month with £1,400 deposit, over 48 months is £8600, which is much more than I've ever spent buying and keeping a 2nd hand car on the road over the same period.

But of course understand that some prefer to spend their money in different ways. Each to their own.

@MauveMavis

Worked out over the years we keep the car it is cheaper than PCP but you have to be able to afford the car in the first place and manage any unexpected big bills.

PCP isn't leasing, if that's what you mean.

But they aren’t doing it for everyone. They’re doing it for the people who prefer new cars.

Yes and the number of people who 'prefer new cars' has gone up massively. Think about how many people leased new cars 20 or even 10 years ago. No one needs a new car. It's just another form of rampant consumerism that is probably only going to get worse as everyone continues to desperately try and keep up with the latest thing.

Yes and the number of people who 'prefer new cars' has gone up massively. Think about how many people leased new cars 20 or even 10 years

This is because there are so many more cars on the road.
So many more people have more cars in their households.

Because the general demand for cars have gone up they haven’t been able to keep up with supply.
So they’ve incentived buying a new car with very good lease deals where you only have to pay the depreciation. This helps with the supply of new cars AND second hand cars.

Instead of calling people buying the new cars foolish, we should be buying less cars full stop.
Then the supply would be more in line with demand and they wouldn’t incentivise new cars and it would go back to what it was 7 years ago when it made sense to buy a second hand car and drive it into the ground.

When people talk about depreciation just for driving a new car off the forecourt, have they not heard of ex-demos with little more than delivery mileage for 20-25% off new prices? Do they not haggle with the dealer if they want a brand new one that's not even been registered?

Both our cars were bought new, one is a few years older than the other. They were brand new, not even demos, and we haggled over 20% off the list price, in fact the latest one was 25% off list - we paid £15k and the list price was just under £20k.

Surely no one just pays the list price at a dealership without haggling?

@canigooutyet

It's worked well for one of my dd's. New driver under 25.

She shopped around and got a newer model Kia on lease paying around £170 a month compared to roughly 350 a month insurance. Paid around £600 deposit and has it for 2 years.

Had she bought an older Kia it was around 9k for the car, 350 pm for insurance plus an up front cost of nearly a grand.

The lower cost has allowed her to put more money into an ISA. When the lease ends she might go down the route of ownership depending on the insurance cost as she wants more than the standard theft and fire. Plus she has the peace of mind knowing if something goes wrong, she hasn't got a potential hefty repair bill, it's not two cars knocked together etc. Plus if she loses her job and cannot quickly find another one, the car cost can easily be covered whereas the insurance would be an issue as although it could be cancelled, many companies charge a hefty fee for this.

When I talk to her later will let her know she is foolish and should have gone for the expensive option of having a car. And instead of shopping around, she should have just got the first deal she saw.

She's driving a PCP car without fully comp insurance?? Have I read that right? That sounds extremely risky!!

When people talk about depreciation just for driving a new car off the forecourt, have they not heard of ex-demos with little more than delivery mileage for 20-25% off new prices? Do they not haggle with the dealer if they want a brand new one that's not even been registered?

Both our cars were bought new, one is a few years older than the other. They were brand new, not even demos, and we haggled over 20% off the list price, in fact the latest one was 25% off list - we paid £15k and the list price was just under £20k.

Surely no one just pays the list price at a dealership without haggling?

That’s not a thing at the moment due to the supply situation.

She's driving a PCP car without fully comp insurance?? Have I read that right?
That sounds extremely risky!!

I'd imagine in the contract is some such disclaimer demanding fully comprehensive insurance as well.

@Ylvamoon

If we all bought a new car and kept it the average lifespan of a car which is 10 years, we’d still need the same number of cars being made than if we did what happens now

So if 20 people buy a new car, then 20 will be produced. If the 20 people then get a new car after 3.. 6 ... 9 ... 12 years 80 more cars are produced...
If they don't get a new car and keep it for 12 years, only the original 20 cars are produced in that time period.
Same with 2nd hand, if you buy a 3/4 year old car and keep it for a further 10 years rather than replacing it after 5 years, 1 car less needs to be entered into the supply chain.

This is how we should be thinking. Look at the goods that are already there and replace when absolutely necessary. And stop falling for all all the clever marketing that is tapping into our future earnings.

Yes exactly!

How long would you say a car lasts?

I'd imagine in the contract is some such disclaimer demanding fully comprehensive insurance as well.

I suspect it’s one of these deals which includes insurance

I think everyone’s getting confused with that persons comment on insurance.

I read it as £170/m for the car insurance for the lease car. When it would have been £350/m for a purchased car.

Leased is just a long term rent, probably why the insurance is less. When he daughter goes to buy her own car one day she wants it to be fully comp and not have to oh £350/m just for insurance.

If I had £350 spare a month as a young person I'd save it for a year and buy a car with it, it's what I did when I was young, eight year old VW polo £1650 in 2007, my brother had it after I was done with it, stayed in our family for eight years until someone crashed into it and wrote it off, never cost much other than basic servicing, tyres etc. You don't need a brand new car at that age, the insurance is too high, even now we tend to buy cars about five years old