Page 3 | How do lots of people afford the brand new luxury cars ?

Stroganoffo · 2023-02-02T15:24:59+00:00

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 ?.

BeyondMyWits · 02/02/2023 16:18

We pcp a 1 year old car over 4 years and trade it up after 3. Never paid more than £300 a month. Servicing and extended warranty included.

We own a little ka+ that we use as a runaround. The pcp is on a nice VW that's big enough to transport the kids stuff to and from uni,to go away on decent trips and back and fore to mil who is ailing.

Works for us.

Anamechange2 · 02/02/2023 16:18

The tax breaks with a Tesla very good.

Isyesterdaytomorrowtoday · 02/02/2023 16:19

We get about £1300 a month (pre tax) in car allowances between us… that goes some way to cover it

Blossomtoes · 02/02/2023 16:20

noworklifebalance · 02/02/2023 16:17

Generally speaking there is no point in owning a car outright as it will depreciate in value - unlike property, which will generally appreciate over a long period of time.
If you can afford to, you would be better of putting down a deposit of, for example, £3k and paying £200/month for 3 years and then trading it in for a better model. This is particularly useful for electric cars where technology may improve a lot in a 3 year period and so you can trade it in for one with better mileage etc.

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Exactly. Owning a depreciating asset is a mug’s game. I never want to own a car again.

whiteonesugar · 02/02/2023 16:20

We lease one car and own one car.

Prior to leasing we owned outright, but when a lorry ploughed into it and wrote it off, we got £2000 paid out to us. We couldn't buy a car for £2000, and we needed a car soon, so couldnt spend much time saving up, so we used it as initial payment on a brand new lease. No MOT / Tax / Service costs and if something goes wrong it gets sorted. Not like the one we own outright that cost us £1300 in repairs last year.

Saying that, it's not a 'luxury' car because that would have cost between £100-£200 more pcm which makes no sense purely for the badge. It's mid-range I would say.

MissConductUS · 02/02/2023 16:21

Baconand · 02/02/2023 15:40

We lease. We get some absolute bargains.
Only a financial idiot would buy a depreciating asset like a new car outright.

We pay cash when we buy new cars, then drive them until the wheels fall off. I guess we're financial idiots.

Leasing vs. Buying a New Car - Comparing the two major finance choices

Disadvantages to Leasing As attractive as a lease may appear, there are a number of disadvantages:

• In the end, leasing usually costs you more than an equivalent loan because you’re paying for the car during the time when it is most rapidly depreciating.

• If you lease one car after another, monthly payments go on forever. By contrast, the longer you keep a vehicle after the loan is paid off, the more value you get out of it. Over the long term, the cheapest way to drive is to buy a car and keep it until it’s uneconomical to repair.

• Lease contracts specify a limited number of miles. If you go over that limit, you’ll have to pay an excess mileage penalty. That can range from 10 cents to as much as 50 cents for every additional mile. So be sure to calculate how much you plan to drive. You don’t get a credit for unused miles.

Anamechange2 · 02/02/2023 16:21

RedToothBrush · 02/02/2023 16:01

DH could get a 'nice car' on his company scheme.

Why, you would, boogles my mind though in terms of the financials. It doesn't even work that well in terms of taxation for him.

He looked at it for three or four years before deciding it was a mugs game, which tied you to a company. Thankfully since he didn't get one, it was easier for him to change jobs when problems started emerging there. He's paid better at his new place.

He was relieved and he's been massively put off the company car handcuffs. Instead we're saving for a new car of his choosing which we will own and not have the spectre of debt having over us (which in theory could affect remortgaging in future too). It's theoretically an asset, which although it depreciates, you still have something tangible rather than just throwing money at thin air. Indeed because the second hand market has been so inflated, the amount his current car has depreciated is a lot less than we factored. Its functional and gets him from a to b.

Every so often he wistfully dreams of having the flash badge with all the gadgets. Then looks at the numbers and goes 'fuck that, I could do x, y and z for that'. It makes no sense except for ego or status.

DH is reinforced by the experience of someone else. A friend of his at his last place is single and bought a fancy car. He's stuck with it, it's woeful fuel efficiency (at one point last year it got to the point he was avoiding going into the office). He loves his car but he'd never get something similar again.

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My apologies, I should have said having a Tesla is good tax wise.

CementTrucker · 02/02/2023 16:30

Seems to be some confusion on here about company schemes that allow cars to be leased under advantageous terms, financing a car via company car allowance and receiving a company car. If you can get a fleet car from your company as part of your package it’s usually a very good deal. For electric cars I can’t see how any other means of running a car could match the advantages financially, and that includes cars far in excess of £50k.

BeyondMyWits · 02/02/2023 16:33

MissConductUS · 02/02/2023 16:21

We pay cash when we buy new cars, then drive them until the wheels fall off. I guess we're financial idiots.

Leasing vs. Buying a New Car - Comparing the two major finance choices

Disadvantages to Leasing As attractive as a lease may appear, there are a number of disadvantages:

• In the end, leasing usually costs you more than an equivalent loan because you’re paying for the car during the time when it is most rapidly depreciating.

• If you lease one car after another, monthly payments go on forever. By contrast, the longer you keep a vehicle after the loan is paid off, the more value you get out of it. Over the long term, the cheapest way to drive is to buy a car and keep it until it’s uneconomical to repair.

• Lease contracts specify a limited number of miles. If you go over that limit, you’ll have to pay an excess mileage penalty. That can range from 10 cents to as much as 50 cents for every additional mile. So be sure to calculate how much you plan to drive. You don’t get a credit for unused miles.

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The monthly payments go on forever, but your car is never more than 3 or 4 years old. So new features, less obsolescence. Its nice to have adaptive cruise control, assisted parking, heated seats etc... I can't afford to buy a car with all that, and all the nice extras. But by trading up on pcp you don't need to worry.

Last time we traded diesel for petrol, next time we'll trade petrol for electric... by the time we do that, electric cars with the features we want will have been around for a bit. And who knows what the trade up after that will bring...

I'd rather still be paying and sitting in a car with all the bells and whistles, than in a 16 year old, falling apart, money pit mondeo like my brother.

RudsyFarmer · 02/02/2023 16:36

From the people I know this is how they afford them;

one car household so one car payment
both people working - high household income
self employed household so cars are an expense
not huge earners but car is a priority so the payment makes up a large portion of monthly expenditure

ThreeLittleDots · 02/02/2023 16:36

I'd never lease a car, no matter how convenient.

Even my shittest cheap 2nd hand car didn't cost anything like £500 a month to maintain.

Applesandcarrots · 02/02/2023 16:37

when I was little these were quite rare as only the wealthy had them.

When my mum was little same apllied to jeans and bananas....
Times change

x2boys · 02/02/2023 16:38

We got a brand new mobility car as my sons disabled it's not a top.of the range model though ,it s paid for out of the mobility component of my sons DLA.

RudsyFarmer · 02/02/2023 16:39

The reason we buy, not lease is because DP does all the maintenance on them. We can put as much mileage on. The kids are pretty bloody messy and I’m not freaking out and I guess we can afford to buy. Then we part exchange and but again. Oh and I don’t give a shit about what I drive as long as it’s reliable, so I guess I’m low maintenance in that regard.

SweetSakura · 02/02/2023 16:40

They have more money. Or they like spending the money they have on cars.

DH and I have two basic runabouts but both have high paid jobs, we've prioritised a big house,.decent pensions, lots of activities and holidays with the kids. I have friends with big new SUVs constantly sighing about things they can't afford.... Different priorities.

(I also know people whose parents buy them a fancy new car every few years - some people just have a lot of money from sources other than employment)

MissConductUS · 02/02/2023 16:41

I'd rather still be paying and sitting in a car with all the bells and whistles, than in a 16 year old, falling apart, money pit mondeo like my brother.

When the car costs more to repair than it's worth, we trade it in or donate it and buy a new one. My daughter has our 2012 Subaru at uni and it's fine. It's never needed a major repair, just the scheduled maintenance and things you'd expect to replace like tires and brake parts.

Original poster

Stroganoffo · 02/02/2023 16:41

I balk at spending £500 on a car per month, I'm in a high income household. Aren't people worried about denting it ? Scratching the alloys ? I bought a one year old car outright it's nearly 7 years old now. I've looked at the lease deals but I'd be worried about having to keep it pristine and the sums are eye watering. I think I'll wait until this one packs in and do the same again.

OP posts:

x2boys · 02/02/2023 16:45

rothbury · 02/02/2023 15:53

Sorry, should have elaborated. I don't think people with DC with SEN cannot have nice things, but one of these children will never be able to live independently. I would have put money aside for my DC care rather than spend it on a luxury brand car, as would most parents I believe.

Depending on the rate of DLA,the child gets ,they might be able to get a mobility car?the child would have to be in receipt.of the High rate mobility component.

Cactuslover88 · 02/02/2023 16:47

I’m paying £175 a month for 3 years to effectively lease (PCP) a brand new Audi, on a £100k a year household salary that’s perfectly affordable… If you want to own the car at the end that’s different. I was fed up of driving an older car that constantly needed repairing where I’d worry about it needing work done constantly. Like others have said, I don’t see the issue renting a depreciating asset.

AngelsWithSilverWings · 02/02/2023 16:48

I'm our case leasing. It's not so easy to get a deal now but when we got a brand new E class Mercedes in 2019 we had actually been all set to order our third leased Nissan. When we went to complete the order a "hot deal" popped up for the E class which was cheaper per month than the Nissan.

The lease is up on the Mercedes now and we've ordered a CLA class but it's very much a downgrade even though it's more expensive ( and it's been 6 months since we ordered it and still no sign of it even being built let alone delivered!)

Comedycook · 02/02/2023 16:50

Cars used to be a barometer of wealth. Not any more.

WowIlikereallyhateyou · 02/02/2023 16:53

Baconand · 02/02/2023 15:40

We lease. We get some absolute bargains.
Only a financial idiot would buy a depreciating asset like a new car outright.

Really, your comment is absolutely hilarious!

Soooo, you put down an initial on your lease car……..which you loose
You make a monthly payment to cover the depreciation of the lease car……which you loose.
You own nothing at the end of it and start the process all over again.

Mmmm, who is the idiot???

AngelsWithSilverWings · 02/02/2023 16:54

@Stroganoffo we paid £330 per month for a four year lease on our E class Mercedes. This was an absolute bargain. Yes the alloys are a nightmare. We never had that worry when we leased a Nissan. We have just paid £400 to get them all fixed just to hand the car back and avoid a penalty. The car went back yesterday and we are waiting on the verdict regarding any damage penalties due.

It was the best and most luxurious car I've ever driven so I don't regret the expense.

Blossomtoes · 02/02/2023 16:54

Stroganoffo · 02/02/2023 16:41

I balk at spending £500 on a car per month, I'm in a high income household. Aren't people worried about denting it ? Scratching the alloys ? I bought a one year old car outright it's nearly 7 years old now. I've looked at the lease deals but I'd be worried about having to keep it pristine and the sums are eye watering. I think I'll wait until this one packs in and do the same again.

If you’re trading it in for a new one they don’t even look at small defects that a few hours in the workshop can solve. It definitely doesn’t have to be pristine. Our new car is going to cost us £240 a month, it’s hardly eye watering.

QuertyGirl · 02/02/2023 16:56

Comedycook · 02/02/2023 16:50

Cars used to be a barometer of wealth. Not any more.

No, just willingness to consume regardless