for treating financed cars as unaffordable?

[Youraveragelass]

I was having a discussion with friends about cars, having issues with mine at the moment, and it has made me question my thinking around cars. There are some beautiful cars on my estate, and while I’d say I can’t afford one, I could afford the monthly repayments but I just couldn’t afford (or want) to put £100k down to buy one outright. That is the extreme of course, and I could buy something secondhand, which I do, but I can’t ever see me going beyond my means for a car.

This seemed to be such alien thinking to my friends, they didn’t understand why owning it outright matters to me. It’s made me reconsider how I think about finances more generally. I’ve never had anything on finance, and the idea has always made me feel uneasy. My default has always been that if I can’t afford it outright, I don’t have it.

I guess, I just wanted to know whether I’m being unreasonable to hold this view and need to lighten up on such strict viewpoints or whether I’m not being unreasonable to be cautious about a depreciating asset.

I buy a 1-2 year old car with cash, then keep it 12-15 years. I sit quietly smug in the pub when people are bemoaning cost of living... my current car is 9 years old, has never had a big repair bill. I paid £19,950 for it when it was 1 yr old and had 4,000 miles on the clock. Its got another 10 years in it, so far its cost me the equivalent of less than 200 a month and thats falling every year i keep it.

I am baffled by what people will pay for a range rover. They aren't even good cars, everyone i know who's had one has had things breaking on it constantly!

Me & DH are the same as you OP.
DH is always asking ‘how is everyone affording these fancy cars?’ and I answer ‘THEY DON’T OWN THEM!’
We don’t have any debts at all & are very cautious when it comes to money. Different people have different views on these things though & if having a nice car is important to them then why not get finance I guess?

I own my car , paid for it with savings. It was three years old.

thats great but honestly by the time I managed to save like 15 grand for a car, cars would’ve tripled in price

saving and buying isn’t an option for a lot of people

I really think the massive repair bills are overegged
In 30 years of car ownership I've had one breakdown, one!
Current car-no repairs at all just servicing,might need new tyres this year.

Paying xyz a month just in case of repairs is ridiculous.
Just be honest,the only way you can afford a nicer car is to lease it, not all this bobbins about cars breaking down

@Peridoteage its called " Car poverty"

I could go and buy my current car tomorrow if I wanted to own it. I don’t. Nothing to do with repair bills though, I just have no interest in owning a car.
If it was the only way I could afford it though, why would that matter? Still my money to spend how I wish.

I own a cheap car. I’m going to teach my teenager to drive in it. I have no desire for another car but if this one broke down and it wasn’t possible to fix it I would have to get another one on finance as I don’t have any spare cash and I need a car for work. It’s all very well saying save up but I have had one thing after another break so all my money has gone on my son or maintenance for the house. So I can’t afford to save for a new car. It’s the reality of life for a lot of people. I wouldn’t get a fancy one but I would need a reliable one as I’m a shift worker so can’t really be breaking down at 3 am on my way home from work as I would feel unsafe.

@cheeseonsofa newer cars are only going to get worse for repairs though I think. One of our cars is owned outright (keeping it for DC) it cost us over £3000 in repairs last year (wet belt was the main cost) it’s more than it’s worth now (hence keeping it!)

I suspect that's luck.

I've been driving and owning cars for 24 years.

Car 1, owned for 2 years. 1 breakdown - starter motor had gone. Was serviced evey 6 months but was just old. Also needed the odometer refitting and then the fuel meter broke. Also needed a new brake pipe as it leaked brake fluid. Thankfully my grandad could do 90% of the work so it didn't cost much. I spent about £500 on parts in the 2 years I owned it.

Car 2 bought brand new. Someone went in to the back of me so needed breakdown recovery then. One time the clutch cable went and I needed recovery then. Was £900 in total.

Car 3 no breakdown or repairs.

Car 4 intake valve failed so needed recovery and replacement -£600. 6months later, new cat - £650. Then the clutch went, £600.

Car 5 brake lights failed, recovery needed. Was an electrical issue which cost about £200 to fix.

Car 6 Breakdown and new exhaust needed. Breakdown, unknown cause but oil pump was replaced as thought it was that (it wasn't) Breakdown again, new water pump. Breakdown again, head gasket. Cost £2800 in non -standard maintenance in the 18 months before we got rid of it.

That's on top of all the servicing costs, brake pads, discs, general maintenance of tires etc for all of them.

Of all my friends with second hand, owned outright car, this experience isn't unusual.

Oh absolutely your choice 🙂

Its car poverty that's concerning though, as @Peridoteage mentioned, I am surrounded at work by people who can barely afford their bills or to eat.
Its yet another poverty trap
Hey ho not my problem as you say.

Understand. I had a payout for something.
Just a PP said no one owns anything anymore

I purchased my car for $5,000 and had colleagues who paid $500 a month for 5 years just to lease the car. Madness.

We have just had this issue. 10 years ago I bought a second hand Peugeot for £10,000 Must have spent approximately 4000 in maintenance.
Petrol was £55-60 for about 300 miles a month.

So monthly £116 cost and approximately £170 with petrol. It gave up the ghost a few months ago so was only worth £209 scrap.

Got a 2022 WV electric on finance with warranty and mot package it is £215 for 4 years. The fuel costs are £5 now.

So for not much extra a month we have a modern car with good features . Yes the kicker is the £4500 balloon at the end. But to be honest I don't mind paying the £200 for a good car. Especially as the other one was just ran into the ground.
The Peugeot will be cheaper overall but the driver experience and the less hassle of the VW is worth it.

@Outwiththedebt I don’t know it is - I have been driving 25 years. First two cars kept few years no issues

next car had one issue and broke down - some band had pinged off the clutch and it was fixed at roadside by the aa (Toyota), had that until about 10 years old no other issues. next was a Renault and walking nightmare. Last car a jazz - 13yo and no issues other than standard routine brakes / pads etc.

We have a 2009 plate car we bought new on the scrappage scheme for about 8k I think. It's lasted well but it's tiny and we only had 2 dc when we bought it.

We also have a mini bus that fits the dc, their friends, ds1's university stuff, ds1's band, plus all their equipment etc. It's about the same age as the little car. We bought that one second hand 3 years ago for £5k.

Many people want a new car but can’t afford it would be a more accurate description. They can afford a monthly payment but can’t afford the car itself.

I had an old car 12 years old from new and it’s never let me down , however I have a car allowance with my job and am required to have something fairly new so am having to look at leasing a new one, I’d never have done this but I have no choice , a car is a car to me as long as it meets my current needs.

So this thread

Leases work well for some people

Buying outright works well for some people

Some people have much more money than others so it's all relative

Rich people don't care about depreciation or high VED

What was the AIBU again?

We go into a main dealer and ask if they have any ex demos or pre-registered cars. We only buy middle of the range Seat/Skoda MPVs, but get say £6,000 - £10,000 off an otherwise pretty new car. The garage has already taken the big hit of the first year’s depreciation. We buy it on HP. It’s cheaper imo than keeping a car 10 years and paying £1,500 or so in big repairs pa. Our last car needed a new automatic clutch after 50,000 miles, because the specialist centre told us, it’s a known fault with DSG clutches, which they do every day!

£150 a month seems so cheap! I don’t think I have ever come across a car on finance for less than £500pcm but I do need a 4x4!

Mine is £198pcm

Over £500 seems very steep, sure maybe going back to your unusual example of a £100,000 car, but most people with a car on finance will be paying less than £500. As stated I have a top spec brand new Audi and my payment is well under £500pcm, and that was quite a luxurious choice, prior to that we mostly did nearly new cars in a cheaper brand for under £250 a month. Depends on the deposit as well of course, and if it’s leased, PCP or HP, as they are all very different schemes.

Chucking money away? Having a car for 4 years which is reliable, never breaks down, goes to the garage once a year for a service, only needs one MOT, attracts no charges for LEZ, has a lower VED?

I spent 20 years having the second hand run into the ground cars. They ate money every time I needed a MOT or they broke down. You can pry my brand new leased car, with all its bells and whistles from my cold dead hands.

The most basic Volkswagen Tiguan you can get (no extras, no fancy colours etc) is £5835 deposit and £441.64pcm for 47months! Then you need to fork out a further £15k at the end. That just seems bonkers to me.

A loan is better than lease as you can actually sell the car at the end. You’ll never own your house outright so I can’t see why it’s different really