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 ?.

@Stroganoffo , so, in answer to your question, my lovely dad died last year and left me a bequest to specifically buy a new-ish car in order to facilitate all of the UK beach holidays my girls and I take. I traded in my old car (with a failing clutch) for a ridiculous amount of money (like £2K more than it’s actual worth). My new-to-me car is apparently depreciating very slowly. It is the most expensive/showy car I have ever owned (and it makes me nervous driving it) but I have never bought a car on credit and I have always bought them outright. I also own my home outright and I never do credit. Ever.

Oh just seen this - so you don't care about it looks and that is your choice too and you dont want to fork out loads - so be it. What does it matter to you then what others have certain cars and choose to look after them. That is their choice.

Because I can

Did you not have a mortgage?

Well… depends what you’re buying. I have a very nice Ford Focus. I bought (from a family friend, whose husband passed away) it at 5 years old, with only 27k miles on it. I seem to recall paying £6000 for it, or thereabouts. I have now had it for 6 years. I’ve paid about £2000 on servicing and repairs over that time. I also do a high mileage of about 15k a year.

If I was paying £400 pcm for a lease, in the 6 years I’ve had it, I’d have paid £28,800 in that time. I accept I would have gotten a new vehicle every 2-3 years, but I’d also be paying the mileage excess, and for a couple of dinks on the bodywork.

I intend to drive it until it becomes too expensive to maintain. I reckon it’s not done me badly. When it comes time to change it, I’d be looking for a similar kind of deal - or one at 3-5 years old which has been on a lease and returned. I’d rather own.

I think it’s most likely to be people with company cars. You have to change them regularly so I always have newish car.

Tbh Audi and BMW have very basic models and I wouldn't consider most of them "luxury car" nowadays.
Most brands mak some "budget version". Even Maserati

@Blossomtoes thanks, I didn't know there was a trade in value, the whole thing makes much more sense now!

No, I paid that off at the age of 32 🙈

The family members I know of with the 2nd and 3rd most expensive cars in our extended family have the use of them through a business associated with a high profile sport. They are not sporty nor famous.

Previously the female was driving a new “loan” vehicle as part of the business arrangement, but they both drive something flash and very new.

When you next see an expensive car for sale with “dealer miles” on the clock, it’s quite possible it wasn’t the car dealer but loaned to people like them.

the family member with the most expensive vehicle bought his outright because he could. Worked hard, didn’t inherit anything, made some good choices. When I was a kid he lived with us for a short time because he couldn’t afford to go elsewhere. it’s all been legit and he is about to upgrade again to a new model.

It took me until I was 35 to save for a deposit for a house 🤷🏻‍♀️. We’re all different.

We buy used cars but are careful about which ones. We like Japanese cars as they tend to be reliable.

The brand new German car owners we know seem to be young men still living with their parents, so very few outgoings other than a massive car repayment every month.

I agree, and we’re all at different ages and stages. I’m an older parent with two adopted children, both of whom have significant ongoing needs, and will continue to, so I needed to make myself as financially secure as possible at as early an age as possible.

You paid the mortgage off ?

Yes!

Well sorry but your statement isn't true then, is it?

I also own my home outright and I never do credit. Ever

By lease do you mean PCP or is it more like a long term rental?

Confused now. Which bit of my statement is incorrect? Are we splitting hairs here? Happy to duck out of this thread now. (I am biting on my own tongue.)

www.confused.com/buy-a-car/tips-for-buying/the-most-cost-effective-way-to-buy-a-new-car

You said you don't do credit but surely that is what a mortgage was?

I assume the poster is referring to the fact that if you have paid off your mortgage, that means you once had a mortgage. Therefore you did ‘do credit’ at least once.

Yes

We buy them second hand and keep them a long time. Our Land Rover is 12 years old (we bought it at 5 years), has done 110,000k and runs beautifully. We’ll keep it for at least another 5 years fingers crossed.

Fair enough, I thought we were talking about car envy/car loans?

Being given credit doesn't mean you can afford something. It means a credit company sees you as a prime opportunity to make money. The two things are separate issues and assuming that if you are given credit you can afford something is a fallacy that screws up a lot of people.

^ this was the subject of a recent moneybox on R4. So many people are given credit they cant afford in real terms.