Page 4 | 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 ?.

WowIlikereallyhateyou · 02/02/2023 16:58

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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MissConductUS,
my other half specialises in this area and advising large lenders in automotive, he eould never lease a car, and you are absolutely correct the most financially savvy way to put a vehicle on the road is to buy it, look after it and drive the wheels off it.
You are far from an idiot!

BodyShapeWoes · 02/02/2023 16:59

One company car, one which was a pcp and now being paid off via hp (last few payments this year) and one car is 15 year old runaround

Works for us

household income of just under 100k but we had the pcp before I changed jobs it’s always been around £300 a month

Kangarude · 02/02/2023 17:00

Not £50k but I paid £45k for my car. Paid for it by selling my previous car for £20k and the rest I paid in cash. I work, no mortgage or young children and have savings. It obviously isn't for everyone, but suits me.

jtaeapa · 02/02/2023 17:00

on the tick as my mother in law used to say

FieldsOfRoses · 02/02/2023 17:03

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NImumconfused · 02/02/2023 17:07

I think I may have misunderstood PCP a bit - I thought you made an initial down payment, then your 36/48 months, and the you either handed it back and got nothing back or kept it and paid the remaining lump sum, but people on here have mentioned trade in value? If you don't keep it is it worth something towards your next car?

Surelyitscoffeetime · 02/02/2023 17:11

Baconand · 02/02/2023 16:00

Yes but if your used car goes wrong you can lose all the money you put in to it. With a lease it’s not your problem if it’s faulty. I do a lot of miles so a £500 car won’t work. I’d be looking at £10k for something reliable enough.

We only have electric cars and they are very cost effective to lease. No-one wants to own old tech and because they are so cheap to run the lease cost is still cheaper than petrol.

I’ve not got anything luxury right now as took a super cheap VW on lease after mat leave. It’s under £200 a month inc home charging cost and insurance. I couldn’t run an old petrol car for that.

My electric BMW that went before it was just over £300. That was on par with an old petrol car in terms of cost but all the benefits of new car (plus environmental reasons). Win win.

We also have a new MG4, that’s under £200 a month on a PCP. Not luxury by any means but a lovely car. Far cheaper than anything petrol!

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Is your VW on lease or PCP? Think I need to look into this!

Baconand · 02/02/2023 17:11

WowIlikereallyhateyou · 02/02/2023 16:53

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???

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You may need help with maths. It absolutely is cheaper to lease the cars we have-electric. I’m not interested in driving a polluting shit heap. I have standards!

YaWeeFurryBastard · 02/02/2023 17:11

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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I think you’ve misunderstood here. My DH gets a decent company car fully paid for by the company including settling the tax, if he moves company he’ll just hand back his current car and get a new one as part of the new job package, it’s really quite straight forward! It’s almost always far more beneficial to take the company car than the cash alternative, unless you are talking about a salary sacrifice scheme, which I don’t think the poster you have quoted is.

NotAgainFrederick · 02/02/2023 17:14

I know young adults in ordinary jobs who have these kind of cars. There parents just have ordinary jobs as well. So I have no idea.

Baconand · 02/02/2023 17:15

I genuinely despair at the lack of basic reading comprehension shown on mumsnet.

OP asks a question about the financing of expensive cars. Some people answer that question.

Then dimwits pile in to post absolutely unrelated twaddle about their superiority for not owning an expensive car and that they drive the legs of their £500 car which has absolutely nothing to do with the OP’s post.

Why? Genuinely baffling.

Reugny · 02/02/2023 17:15

@YaWeeFurryBastard one of my friends, who does earn more than average but not enough to afford such an expensive car, gets the same benefit.

Reugny · 02/02/2023 17:17

NotAgainFrederick · 02/02/2023 17:14

I know young adults in ordinary jobs who have these kind of cars. There parents just have ordinary jobs as well. So I have no idea.

The young adults have few other outgoings so they spend what they could be spending on rent/mortgage on car payments.

One of my nephews looked into doing this a few years back but instead decided it was more financially prudent for him to just buy a second hand car outright.

FieldsOfRoses · 02/02/2023 17:18

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Original poster

Stroganoffo · 02/02/2023 17:18

Blossomtoes · 02/02/2023 16:54

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.

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Do you not get stung at the end of the contract? I feel like if I fuck the car up cosmetically oh well I own it but if it's leased you could end up getting charged loads.

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WowIlikereallyhateyou · 02/02/2023 17:19

Baconand · 02/02/2023 17:11

You may need help with maths. It absolutely is cheaper to lease the cars we have-electric. I’m not interested in driving a polluting shit heap. I have standards!

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What a rude, condescending piece of work you sound.
Why would actually owning a vehicle mean it is polluting or a shit heap? We own electric vehicles and petrol ones, and have something to show for it at the end.

FieldsOfRoses · 02/02/2023 17:22

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OneTC · 02/02/2023 17:23

Was looking at cars today and saw that G-Wagons (which is what I call my mum's wheelchair) are £220k SECOND HAND. And I wondered how much money you'd need to ever think spending nearly quarter of a million quid on a car was reasonable. Like if you had a million quid you're still not spending quarter of that buying a car so presumably the people that own these are multi millionaires.

YourApplePie · 02/02/2023 17:23

Car leasing is fairly easy credit to get, as if you don't pay they can just tow the car away.

I've been driving the same car for 14 years. It's a shit heap but it costs very little to run and maintain. The idea of throwing £400 a month at renting a car baffles me.

GroggyLegs · 02/02/2023 17:24

After a lease, you walk away empty handed, thousands of pounds down.

This is true, but if you want a brand spanking new car (it matters to some, plus 3 year warranty) with lower monthly payments than a loan and a much smaller deposit, if you factor in the depreciation there's not much difference on most vehicles.

All cars leave you worse off than when you bought them (with the weird exception of second hand after covid). Cars are not an asset.

NotAgainFrederick · 02/02/2023 17:25

@Reugny Thanks that makes sense

WowIlikereallyhateyou · 02/02/2023 17:27

GroggyLegs · 02/02/2023 17:24

After a lease, you walk away empty handed, thousands of pounds down.

This is true, but if you want a brand spanking new car (it matters to some, plus 3 year warranty) with lower monthly payments than a loan and a much smaller deposit, if you factor in the depreciation there's not much difference on most vehicles.

All cars leave you worse off than when you bought them (with the weird exception of second hand after covid). Cars are not an asset.

When people come to refinance or take on new leases henceforth they will find a massive difference in monthly costs now due to interest rate rises. This wont get noticed til they come to renegotiate their leases but it will hit and cost of leasing is due to go up massively.

Original poster

Stroganoffo · 02/02/2023 17:28

I'm quite attached to my shit heap , no road tax to pay , £280 insurance a year , no major repairs £45 for a full tank. I've spent the grand sum of £200 on servicing and tyres. Its got 43,000 miles on it and it had 1500 when I got it. I think I might wait for a couple of years until it needs a major repair then start again.

OP posts:

WowIlikereallyhateyou · 02/02/2023 17:30

GroggyLegs · 02/02/2023 17:24

After a lease, you walk away empty handed, thousands of pounds down.

This is true, but if you want a brand spanking new car (it matters to some, plus 3 year warranty) with lower monthly payments than a loan and a much smaller deposit, if you factor in the depreciation there's not much difference on most vehicles.

All cars leave you worse off than when you bought them (with the weird exception of second hand after covid). Cars are not an asset.

Example, Audi Estate type vehicle was say £650 per month, new figures to replace like with like £1500 per month. It will mean issues for some.

ginsparkles · 02/02/2023 17:31

I lease mine, DH has his as his company car. Neither car cost us a huge amount monthly