If you have a car on finance, why?

[Cupboarddoorknob]

Genuinely curious and not a dig.
I’ve only ever owned three cars, my first car my parents bought for me was an old banger, then the other two I’ve bought myself one for £6k which I saved for and then ran it until I realised repairs were silly and sold it on for £3k to cut my losses, I used that £3k and a bit of savings to buy my now car which cost between £3 and £4k and seems to be doing well so far. DH has always bought his cars cash as well.
We have friends who have up to £1k a month going out for car payments, all the while they are stressing about their outgoings, not able to save, not living in poverty obviously but it strikes me as total madness to have this monthly expense on a depreciating asset, even if it does bring a level of enjoyment.

Ah, OK thanks.

I thought it sounded too good to be true !

But we’re not talking about investing, we’re talking about paying a price we are happy to pay for something we want. The fact someone else sees it as a waste of money is subjective, yes it costs more money to buy a car brand new but you get to spec it how you want, you have a warranty, no MOT for 3 years, heck for some it’s just nice knowing you’re the first driver (yes I’m some!) I’m not stupid or financially illiterate, I know that comes at a cost, but it’s a cost I am happy and able to pay! It’s like telling someone they’re wasting money flying business class when they could just fly economy, you’re not comparing like for like.

Show offs do this so they look "rich" driving 40k plus cars brand new that they could never buy. These people are driving up the price for everyone because it seems the majority of people are now doing this. People with real wealth that live in areas where property is in the 1 million+ category often drive more modest often very old clapped out cars, because they have nothing to prove. The people that I know that are doing this don't live in particularly "good areas" but all have ridiculously expensive cars parked in their drive.

This is such a myth spouted out by bitter people, I live in an affluent area, most people are driving cars less than 5 years old!

Our finance car is on a salary sacrifice scheme. So pre tax. We get taxed about 50%, so the lease company gets full whack price pre tax, we in practice only pay 50% of our income on it as the other 50% would've gone to income tax anyway.

That's not everyone's situation, but it's what makes it cheaper for us

It is. My kids go to an independent school and very few of the parents are driving old cars. They might have an old Defender at home for using on the farm but very few are driving old bangers day to day.

I have to agree with the nothing to prove theory. I work for an organisation where our volunteers are genuinely wealthy (the type who mix with royalty). They as a rule don't have spanking new cars. Often beaten up Land Rovers etc.

For those asking where I found it, I found it on auto trader and it was a used care sales guy basically. I think it’s huge luck of the draw re finding an old car without massive issues, but we got the AA check you can pay for first to mitigate best we could.

A one year old automatic electric corsa cost 14k would have been 32k new. Had 6k miles on the clock. Best wee car ever. Costs nothing to run. 6 quid to get 220 miles range.

It’s unbelievable to me how much a brand new electric Corsa costs. And the depreciation is massive. Buying brand new cars outright seems nuts to me unless it is a really special car. Most aren’t.

I was lucky to find it. Love it.

this is of course their 5th car they drive specifically to their volunteering assignments.

I like not owning the car and not having the hassle of having to sell it but just hand it back. Plus, theres a lot of additional cosumer protection with financed cars. I've had full refunds over 6 months later that paying cash would not have entitled me to, so I would have been stuck with a useless car

but I don't want to drive a 10-20 year old car. I don't buy cars for investment purposes.

Genuinely, why do you find it so hard to understand? It really isn’t that complex.

I don’t want to drive a 20 year old car but I don’t stuggle to understand why others might.

Are you taking about leasing or PCP as they are two different things?

I’ve not once had any charges when trading in my financed car.

And finance is very clearly explained these days. Days are gone with hiding finance details in my experience

Because some people like to have the newer, flashier car as it looks better, like they have more money than they do. I know people like this, everything is about appearance yet they are constantly complaining about having no money

Although I get that some people need to borrow money to buy any car, so have no choice, the amount that a lot of people spend on cars is ridiculous. It’s the main reason most people are short of money.

I earn six figures and the most I’ve ever spent on a car is £7,500. I simply don’t believe that more expensive cars are any more reliable, and they’re certainly not cheaper to run.

If you earn an average salary (thirty or forty odd thousand) and have a car worth over £20,000 you’re just a moron.

Why are they “morons? How offensive

Because if you’re not very well-off it’s damaging to your future to unnecessarily spend a very large sum of money (probably borrowed) on something that goes down in value.

So not morons then. Just making different financial decisions than you do.

We’ve had to buy a bigger, more expensive car due to having 4 children, we earn average wages, took a loan out to buy the car and make the repayments every month. It’s not a new car, but the best we found get. Does this make me a moron?

I really feel that a lot of people’s financial problems could be significantly mitigated if they were more financially literate, and car loans are the clearest example of that.

Well.... mainly because I don't understand why people want to add hundreds of pounds of extra expenditure to their outgoings. That's why.

Having car finance does not mean people have financial problems or that they are financially illiterate.