How do lots of people afford the brand new luxury cars ?

[Stroganoffo]

Keep seeing 22 plate Mercedes, Audi , BMW and tesla, when I was little these were quite rare as only the wealthy had them. Now it seems everyone has one considering the average wage isn't that high and the cost of one is 50k. I have a good wage and still don't want to fork out lots. How are people affording them. Is it all on credit ? Aren't people worried with everything else going up and the cost of living crisis ?.

With you

It’s ok ! We built our own house so I’ve never actually had to have a mortgage . I’m very happy you’re mortgage free now too. It’s a wonderfully feeling isn’t it . If you save up you might even be able to buy your next car outright?
Why are you so angry ?

And your house didn’t belong to you until
the mortgage was paid off . Congratulations again!

We bought a fairly pricy car outright. My DH was in a job with very decent bonuses, so we had some cash in the bank. He's naturally very cautious and wasn't keen on leasing a car, so we just paid for it and drove it away. We don't lead a flashy life; you certainly wouldn't look at us and think we're super wealthy (we're not!) but two professional salaries and some decent bonuses mean we're comfortable enough to spend 50K on a car.

Enjoy your new car!

I lease mine
Having a nice reliable car is a priority for me

How ridiculous.

we lease cars of a significantly higher value than that. could buy them outright but I’ve always been taught to lease a depreciating asset.

my SEN son will have whatever he needs in the future paid by us.

maybe your “friend” has money set aside or is planning to use government care.

There are also 65,000 Motability vehicles on the road right now. They are all brand new (up to 3 years old)

@WowIlikereallyhateyou You're really playing fast & 'loose' with the word idiot when you're unable to spell lose. 2 different words, 2 different spellings

It’s mostly paying on finance or whatever.

There’s a lot of keeping up with the Jones’ type thing where I l live.

We work hard, save then buy outright as we won't do credit debt etc..So we started to save for 3 years buy new keep 3 years then sell then selling money plus savings buy new again..we do it with both our cars

We are retired and have a lot of disposable cash so buy new cars outright.

We buy ours outright. I'm an accountant so can't bring myself to buy new because of the depreciation so they're usually 2-3 years old. They're still quite expensive though you often get lots of extras if you look around.

We keep them for 6-10 years and haven't found the maintenance expensive, plus you have the asset at the end. However I currently have a Range Rover Sport and feel obliged to spend £120 per month on the warranty as it breaks constantly and spends a lot of time in the garage.

On the mortgage front, it's not always better to pay it off if you're earning more on the money elsewhere. Ours is interest only and we're currently on a 5 year fix of 0.99%. The last year aside, our investments typically make 20-30% a year. Or you could get around 4% on a one year fixed savings account at the moment.

A random aside but it's a topic discussed often on MN and it's not necessarily the best option to pay off your mortgage if it's a competitive rate of interest.

I used to agree with this but we live in funny times right now.

I bought my car outright. Cars are my thing and I put away money each month until I can buy what I like. I usually do this saving over a 12 month period and am
pretty frugal otherwise. It is where I invest my money (plus louboutins). I used to change my car yearly. I have had Range rovers, Audis, mercs, bmw, a Porsche…
The car I currently have isn’t available in England (I’m not in England), and I bought it new in Jan 2020. Since Covid, the price of my car has increased and is actually worth more now than what I bought it for new. This is the longest I’ve ever had a car and it’s a flipping Toyota (200 series Landcruiser)! LOVE it! Best car ever!

I would have never ever predicted I’d fall in love with a Toyota and that it’d make me a profit.

High incomes, or two average incomes with sensible outgoings.

Some live on debt, blow up inheritances on fancy stuff or have side income

Is it,no shit sherlock, i shall be able to sleep well in my bed toniight, thanks.

As I have said recently, it is going to be a shock to alot of those people renewing their lease deals due to a perfect storm of supply issues and interest rate rises. Huge rises in monthly payments.
There is a reason why our friend who ran and owned one of the biggest leasng companies in the uk cashed out for a couple of hundred million. And that reason is not because leasing is to the advantage of the leesee.

They are comparable in quite a large parts of the country price wise. Well yeah ok it's not luxury house for 50-80k by tbh nor is the car.
I really think luxury starts on 80k+ for cars. Then you have just cars and then budget cars.
@Blossomtoes was right imho
Our car even appreciated in value😂

My car is over 12 years old and has done over 150k miles. I bought it for 4k and I've spent about 3k on it over the years. I think that's reasonable.

I’ve got a mid range VW on lease.
Leased it for 4 years from brand new in 2019, which included free servicing. I’ve just been discussing getting another new car of the same type and yes, it has gone up since 2019, but only by £70 a month. I thought that was quite reasonable. it’s been fabulous having everything taken care of and driving a new, problem free car.

Previously I owned a car I bought outright when it was about 5 years old and ran it into the ground pretty much, driving it until it was ancient and the gearbox went, so pointless replacing it.
I hated having an old car. Nothing to do with the optics, it was just constantly having issues and it was an unreliable pain. I will never drive an old car again.

DH has an electric car we bought outright, as both me and DH need to drive for work. But for me, I’ll be leasing new cars as long as I’m working and can afford the monthly payment. So hassle free.

I think we also can't compare cars 15-20 years ago which lasted ages. There is still lots of Ladas and Skoda 120s happily driving around.
The never the cars the more electronics etc they have in. I don't believe that most cars made in 2023 will have same possible lifespan like 90s or early 2000s cars tbh.

Kind of like mobile phones. I still have nokia 6131 which works. I also have 5 dead smartphones by now😂

PC bloody P.

Which is entirely designed to keep car manufacturers in business by persuading a load of people that they need a brand new car every three years. It’s an environmental disaster and a financial con.

I guess what happens with monthly payments of any kind is the thinking of ‘in for a penny in for a pound’. If you started wanting to pay £300 a month and that only got you a ford fiesta then the extra £50 to get a land rover doesn’t seem like such a big step and you can justify it due to how much more value you are getting. Those are hypothetical figures btw.

and yes to the PP who said that some people might be shocked on renewal as lease prices have gone up. As I said previously, I took my spend on the new car I wanted plus service deal, got a resale figure after one year using a figure at the lower end not assuming a private sale and worked out the monthly cost. I thought lease was marginally cheaper until I realised that the insurance and service wasnt included which I thought it was as everyone talks about simplicity (also tyres and consumables like wipers) and, the big one, all the headline figures are for very low mileage, 5k iirc. So, I’m no idiot. At my lower end of the market leasing came out about the same or a little more.

Credit is not necessarily bad, buying outright is not necessarily good.

People just need to inform themselves as to the best way to finance what is, for most, an essential purchase.