How can anyone afford a car?

[PoisedGoldBiscuit]

So we've leased cars for the last 14 years or so. Have paid a non-refundable deposit of between £500 (for a regular hatchback) to around £900 for a SUV. I pay just under £300 p/m now for a Qashqai that includes maintenance (so services, MOTs, most repairs not covered by the warranty or caused by accidental damage). I also don't need to pay car tax.

I'm conscious of the fact that this is a debt that I'll essentially never pay off as I'm not gaining any equity in the car and just hand it back. I've looked at other options and they seem so far out of reach.

• buying cars second hand, friends who have done this seem to regularly spend £££ on maintenance issues, even for cars that are only a few years old.
• buying cars new but with a warranty, the monthly payments are huge and the car seems to drop so much in value that it's not worth the payments.

-taking out a PCP/ other scheme where you can hand the car back or pay a balloon payment, again, these seem to have huge monthly payments. Dealerships have never been able to get anywhere near the lease payments (and then have a huge balloon payment).

Am I missing something?

I think op has got it right !

I wouldn't say that's necessarily the case. Some people want a decent car with all the latest innovations and comforts. I love my heated steering wheel and seats in the winter. I love my full sun roof. It's a part of my life I enjoy. I like the safety benefits., I once had a VW Beetle that had the bonnet of another car welded to its underneath . The water still came in when it rained 😂 called it my Fred Flintstone car.

Short version: I've got a 6 year old car that I bought from new, only done 35,000 miles due to COVID and no way would I swap it for anything else, because a PCP on the same spec vehicle would be about £550/ month in today's market.

Long version: I bought my current car, a new Vauxhall Astra, in June 2019, the year before COVID. I decided to buy it on PCP at £350/month with the option of the balloon payment of £7,000 after 4 years at contract end. I got a great deal on it, lots of extra features (metallic paint, electric wing mirrors, heated seats and steering wheel, DAB and satnav, electric hatchback and leather seats).

This was before the CoL crisis and before everything including cars went through the roof in price. Then in Mar 2020, COVID struck and my mileage plummeted for a long time as I went from going to the office 4 days out of 5, to about 1-2 days a week if that. So I ended up with a 4 year old car with the same wear and tear on it as if it were a 2 year old car, pristine body work and good condition tyres.

Just before the lease was due to be paid off, I started getting loads of emails and phone calls from the dealership - they were literally begging me to trade my Astra in for a new one in PCP. They gave me a comparative cost for the new car, including me agreeing to part exchange my Astra as part of the deal. WeBuyAnyCar valued it at £13,500 at that stage. The PCP would be £475/month for 4 years with a maximum annual mileage of 6,000 per annum,
and I'd have to give back the car with no option of a balloon payment. And none of the added extras I have on my current Astra. And hand in my almost brand new Astra at £13,500. No deal!

I said "you've got to be joking! You're telling me. I have to give up my current vehicle which is as good as new, lower mileage than you'd ever likely to get on a 4 year old vehicle, no extras and an extra £125 per month for the privilege, no thanks!" They then said "you've do know your cam-belt is going to need replacing in the next year" so I checked on the Vauxhall website and they were lying through their teeth - with my mileage and age of vehicle, it would be another 50,000 miles before it needed changing. They then came clean and said they'd "got that wrong" AKA lying through their teeth!

they had realised that the secondhand market for petrol cars had gone through the roof and tried to get me to part with an almost brand new vehicle and get back into debt again, just to get their grubby hands on my car.

It's still running very well, I love her to bits, she's so reliable annd comfortable I've not intention of changing and getting into debt.

Well say that then rather than complaining about other people's opinions. It's all irrelevant as OP hasn't bothered to come back anyway. However I've gained as it's helping me decide what to eventually replace my ancient car with 😃

Who are you to decide what people can or cannot say ? 😂

Where did I complain about other people's opinions? I talked about MY experiences in this area.

I bought a 10 year old Lexus SUV hybrid for £9k in 2018. I've had it serviced annually at an independent Toyota/Lexus specialist.

I had the cambelt changed at 15 years, but apart from that it's just been consumables - tyres, 12v battery and brakes.

I've a fairly low annual mileage, but it seems to be a very solid and trouble free car.

Bought my little citroen for less than 1K, 3 years ago, tax is £20 per year, never had a single issue with it, passes the MOT each year, recently drove it from London to Chester, no issue. If status symbols aren't your thing, you can pick up a bargain that costs nothing to run

Lexus (and presumably Toyota) have a little known insurance scheme where you can pay £40 a month after the car reaches ten years and extend the warranty to 15 years. It covers all parts and labour with zero excess.

Definitely buy second hand, still under warranty. Take a personal loan out (you can research to find the best loan APR). There are plenty of online reviews to do your research first on reliability. Car is obviously yours at the end. However, it helps to have a decent deposit.

Arg, so I typed a long reply a few hours ago that worked on the app but doesn't seem to have submitted 😅.

Anyway, a huge THANK YOU to those who have submitted practical advice, especially around extended warranties, RAC checks, reliable models etc etc!!

Leasing was a fantastic option for me at an uncertain time, which I absolutely have no regrets for. I admit that I have settled into this way and I will be researching nearly new options when we have our next renewal, thank you!

For those quick to judge, I leased because it was the most financially stable and sensible option for me at the time. It guaranteed predictable monthly payments and, crucially, reliable transport. I’ve never once broken down while leasing (touch wood). That reliability meant I could get my children where they needed to be safely during a very difficult period. And if anyone thinks this was some kind of vanity project, I assure you—if you’d seen some of the cars I’ve leased, you'd know it had nothing to do with image and everything to do with practicality.

And to add that I've been scarred by second cars that have led to multiple breakdowns and at one point, legal action with a main dealership. None of which are ideal with small children. A safe and reliable car has always been my priority. A set monthly payment, especially as a single parent, has been a huge bonus.

We will be replacing our car in the next few months. We bought it new on 0% pcp, with a good deposit contribution from the dealer. It is normally 8 years old, 70,000 miles and we want to get rid before we start to get big maintenance bills. We want to go electric but the prices are eye-watering. However, on a new model, on pcp there are some big deals, so if we can get the right deal, 0% interest, good contribution from dealer, good part ex, and a home charger plus the new grant from the gov, it may be worth going for a new model. If we can't get the deal, we will look at used with under 5,000 miles run up. Thus may be our last car, so want one that will see us out. We have a friend who buys v cheap, luxury cars, BMW or Jags, and runs them into the ground. Even with repairs he reckons it costs him less than buying new, and he has a quality car to drive round in.

I commented the other day to a friend that you don’t see as many older cars about any more. Mine is 2014 and people keep saying oh it’s really old, aren’t you changing it and I’m its a VW with less than 50k miles on it!

Im sure I used to see loads of say older micras, corsas etc about but now I see more new cars

My DC has bought a used car more cheaply by buying a colour that nobody else wanted!

I just looked it up, my Toyota which I sold for 2,000 with 120,000 miles on the clock when needing something bigger is still going and now has 240,000 miles on the clock!

I got fed up with my older car being in the garage and costing me hundreds in unexpected bills (plus never actually having the car as it was constantly breaking down!) so I got a PCP car last year. Brand new it would have cost well over £300 pm, but mine was 2 years old, and only costs £120 a month. It will be under warranty the entire time I "own" it, and is electric, so no tax, no fuel costs (can charge for free at work) insurance is pretty cheap, and I'm hoping I have no issues when it has its first mot. Electric cars only need servicing every 2 years too, so I'll only cover one of those in the time I have it. I'd much rather pay an expected monthly cost and have a relatively new reliable car, than be worrying about what's going to go wrong next, like with cars I've had in the past. I know it's not for everyone, but I don't actually want the stress of owning a depriciating asset that causes unpredictable problems once it reaches a certain age. I couldn't give my last car away when I wanted rid, as it had so many issues, and I'd already spent thousands in repairs. Managed to use it as a part exchange for this one, and the garage actually gave me a reasonable amount for it, even with the list of issues it had. I could afford more on a brand new, or more fancy brand, but I'm not a car snob, just need something to get me around without the worry of it breaking down every month. £120, which works out at £4 a day(!) is worth it to me for the peace of mind and reliability.

It depends where you live. In rural areas I see a lot of older cars as the norm. In outer London the ULEZ expansion forced a great many perfectly functional 10-15 year cars off the road to the scrap yard and massively inflated the price of second hand cars. A friend from the local hospital had staff travelling as far as Birmingham and Manchester to get a replacement car they could afford so the impact on prices was not just in the SE.
It caused a great deal of hardship for low income workers in outer London where transport links are nothing like those of central London and most low income workers are on shift patterns. It also pushed people into lease deals they couldn’t really afford at a time of the CoL crisis.

I drive a small car. It’s 2016 reg. Rarely have to spend on it bar MOT and service. It was £6k about 4 years ago and I paid cash from previous sale. Dah has a company car but in the past he bought privately. Always bought VW or Audi and they were reliable. He knows what to look for( few owners, low mileage, service history etc)

The need to manage on a tight budget and transport children is common.

Before the manufacturers started coining it with lease hire deals it was commoner to take a bank loan and buy 2-3 years old in your position. The same certainty of monthly cost, a car still in the warranty period and at the end you own it outright to sell or keep using without the monthly payments, no big payment to keep the car at the end of the deal. This is still the cheaper way to run a nearly new car.
Leasehire is an expensive way of borrowing the money for a car during its maximum depreciation period. If you are on a budget that is worth considering. The sales team will target you as worried about reliability and play on that - they are highly skilled. But I’ve never had reliability issues buying a “nearly new” from a good solid make.

I’ve been watching the Which? regular assessments of lease hire for years as there was a time where it promised to be cost effective over the life of the car but that was before the CoL impact on the car industry. If you are on a budget and can’t afford to buy something outright have a look at the old fashioned low cost bank loan model - it still exists.

Mine is similar age and costs - a Corsa, as was its predecessor. I'll replace it when it starts becoming problematic. Meanwhile, I put about £150 each month to cover big bills on it and save for its replacement. I prefer me to have a few thousand rather than a car company.

Bought a decent car…Toyotas never break! Originally it was PCP and then we saved alongside it to pay it off. Monthly payments were a hell of a lot cheaper that the work lease company and our insurance doesn’t cost a lot (I don’t pay it monthly I pay it yearly).
The car is now 6, apart from some new tyres it’s needed nothing else.

Until recently we had two cars from 2011 which we bought cash in 2020-2021.
Both were low mileage at the time, one has been the work horse and used for long distances and my partners commute. The other car has mostly used for pottering around when we have needed two cars and has done 3-5000 miles a year.
They have both had a few things go on them but I think annual repair costs have been no more than £500 a year mostly brakes, tyres and coil springs - one has broken on both cars over the last few years. As they reach 10+ years we have had a few low cost maintenance required. Both have needed new batteries and spark plugs which were relatively cheap. We have ensured they have had services on time and generally looked after.

At the end of last year the work horse car started with a few knocks, it was approaching 100k miles so we made an assessment of the value of the car to us versus it's second hand value and determined that actually this car is starting to not meet our needs mostly due to the space in the back seats and boot. So we have traded it in and bought a low mileage 2022 plate estate car outright. It's not the trendiest of cars but had a good review, the car has good service history. Had it still met our needs or it been the other car, which is worth more to us than it's second hand value, we would have accepted a year or slightly higher than typical repairs knowing that it would then give us another 50-100k miles and the expensive year would average out to less than the cost of upgrading the car.

I just wanted to comment on people saying you lose money as soon as you drive a new car off the forecourt… it depends how long you keep the car of course…

My VW was bought brand new for about £11k over 20 years ago - so it’s cost me £500 a year plus MOTs, servicing and maintenance. I think it’s on the 3rd exhaust and cambelt - they’re the only major repairs in all those years, laregst ever bill was about £700 but most years just sails through MOT & service. The car savings we’ve had could pay for a yearly cruise…

I just wanted to comment on people saying you lose money as soon as you drive a new car off the forecourt… it depends how long you keep the car of course…

if you are buying a brand new car in UK:

1. You will pay VAT on the car, which will not be recoverable, unless you are a business and can reclaim VAT if you're registered and can justify with HMRC that it's a company asset, eg a commercial van, which won't apply to most people),
2. The car loses actual asset value every minute you own it. If you go on a website like WeBuyAnyCar, and put in your reg number it gives you the current value, do that 1, 2, 6 months later and the value will go down even if you leave it in your garage unused). The except is if it's a classic car which tends to appreciate in value over many years.

so it is completely accurate to say that a new car loses value on those two counts (VAT and actual asset value), the minute you drive it out of the dealership.

you are not "saving" money just because it only costs you what you perceive to be a smaller amount for your annual MOT and maintenance than other people spend on their cars. you are expending cash on an already depreciating asset, however the intrinsic value to you is greater, because it is convenient, gives you freedom, means you don't have to wait for a bus etc.