How does everyone afford very expensive cars?

[Idratherbewithmycat]

Ok yes I live in an expensive area but I can’t help but notice that everyone seems to drive expensive SUVs. Some families I know have good but normal incomes (like us) and still drive massive cars (not BMW type but bug lovely peugeots or Kia etc). I was just googling prices as we could do with upgrading what we have and OMG, it’s a lot of money!
Do people usually buy their cars on finance or upfront? We only bought a car once, it was a second hand cheap-ish car we paid fully upfront. Don’t see how we would be able to fork out £25K + for a new car!

I would think they’re nearly all finance or loans… or pcp. It’s quite rare, I think, for people to buy a very expensive car outright.
As for how do they afford it, well, as with anything, by earning more potentially and/or by prioritising differently.

We lease. Yes it’s dead money but for various reasons it suits us to do so.

They pay on finance or lease, that seems to be the norm. Personally I've never done it, I prefer to buy an older one outright, but each to their own.

On finance.. DH is changing our 3 year old car today.
I'd prefer to keep the old one but our big payment is due shortly so we would have had to pay that.

They're leased, or company cars. They don't own them outright.

I lease. It's my treat although I have an ordinary car, not a fancy one. Leasing means I get a new, reliable vehicle and don't ever have to worry about it breaking down or having to pay a garage to maintain it.

Finance, I love having a nice new car and changing every few years. I see it no different to people who spends a chunk of their disposable income on hair/nails/gym/sky/Netflix etc or whatever. Everyone has different things they want to spend money on

Oh yes absolutely, I wasn’t criticising and how can see how nice it can be. I was just curious to ask what most people seem to do in order to afford such cars

For the people on this thread who have lease cars, do you have a limit on mileage?

I do but you set your own limit. The dealer then prices the car accordingly.

I have looked at this but drive around 20k a year - I couldn’t find anything online that would let me do it.

Ah, the old "computer say no" 😀 Go speak to a dealer in person you'll probably have more luck that way. I don't see why 20k a year should be a problem.

Or just take the maximum mileage you can get and pay the additional when you give the car back.

I do.

We always buy new/demo, pay in full and run them till they die.

We have 3 on the road currently. One cost £55k in 2023. The one before that cost £18k in 2016 (little run around for DH) and the one before that was £30k in 2005 (still running).

Company cars
Leased/loans

Pay for them out of savings, taking your £25k example, that's not even £200 a month over 10 years including interest if you save.

So if someone saved £200 pm in their 'car fund' and then every 10 years used the money accumulated to buy a new car, they could be driving a new/nearly new car - look at the registration plates - many of those 'new' cars will be 5/10 years old. I highly doubt that 'everyone' in your area is driving a brand new car, changed regularly.

Plenty of people will buy nearly new and keep it for a good few years, which is massively cheaper over time than buying new and then always replacing the car.

But some people will just have more money than you, or have in inheritance that they've bought the car from.

Ok yes I live in an expensive area

How do you afford to live in an expensive area?

Lots of people lease. I think people see it a bit like phones etc. you pay monthly, get a lovely new car, and upgrade every three years.

My son did it for 3 years in his early 20s. Hed had a succession of older cars which forever needed things doing to them. He decided he'd rather pay a fixed sum each month and have a sporty car that he loved than end up spending £500 here and there to patch up/repair a car he owned outright.

We've never leased but I can see the attraction

If you own a business, leasing a car means you can write the monthly payments off as company expenses and lots of people do that.

Luxury brands like BMW and Mercedes give people from professions like medicine and law a significant discount (10-20%) because that's the clientele they want to be seen driving their vehicles.

People in diplomatic services are exempt from various types of tax so a new car always costs 30-40% less than retail price.

Loads of people buy second hand luxury cars so they can have the show off factor for a fraction of the price.

Well just because I live in an expensive area it doesn’t mean that I live in a very expensive property. Expensive areas do sometimes still have a mix of households, some people live in 3 million mansions, some people live in £400K flats. We have a good income but this is London so not much spare money left for luxury cars

If you own a business, leasing a car means you can write the monthly payments off as company expenses and lots of people do that.

Only if you need a car to do the work.

Motability

I bought an expensive car with money from an inheritance. I had always wanted this car and thought why not? I also got a significant NHS discount. I plan to keep it for many years.

I bought my first car (that wasn’t given to me) in the early 2000s for £15k out of saved income. I had just got a good job in the City but was still living in a cheap flatshare so I could save easily. Since then I have traded in my car every few years and added a bit to it. I usually buy nearly new. I drive a bmw x3 now. I have had it since 2020 and will probably change it next year. 7 years would be a long time for me to keep a car but this one was hardly used for the first two years as we got it just before the first Covid lockdown.

The same way anyone affords expensive things - either by saving up, coming into a large amount of money, taking out a loan or renting. It can't really be a puzzle to you. What possible explanations had you come to before asking the question?

Not true currently but there was a time when leasing a car was a perk through DH's job - I think the payments were taken before tax, similar to pension contributions.

We only had one car and needed it to be totally reliable. The car leasing co changed our car every 2yrs or so b/c that was the magic age when they could sell the car on for best value for them.

So we had a series of brand new cars. I'm sure some people thought we were minted but actually it was all a clever wheeze.

When DH's company decided to close down the perk, we bought the car we were currently driving b/c it was a good car and we were the only ones ever to have driven it. It's now 10yrs old and (fingers crossed) going fine.

Yep I set the limit when I got the car, it affects what your monthly cost is.