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!

Not always the case dh bought his last car in. 2021 for 29k cash…he then traded it in last year for a 25 car and got 19.5k for it and then paid the rest in cash.

I leased three Volvos in a row and then paid then purchased an electric Audi.

Well that doesn’t fit the three year rotation of new cars then. In the time we’ve had our cars the neighbours have all rotated their cars around two to three times. I can remember. Range Rover, Tesla, Land Rover. Another lot went Disvovery, Audi, Skoda. The ones nearest to us went electric and then it went tiny BMW, Mitsubishi and now it’s some little thing that looks like a Micra.

I had an Audi once and it was a TERRIBLE car. Have they got the app working now?

I love mine, I’ve wanted one all my adult life and my fuel has gone from £440 plus a month to £70 electricity.

But does the app work? 🤣

Sorry if this has been addressed as I haven't RTFT but those with an NHS discount, do the monthly payments reduce your monthly salary and therefore, reduce the amount going into your pension pot?

Sorry yes all good, apart from when I get it serviced and then it gets screwed up.

We do PCP, it makes me laugh how people turn their nose up at it. All this talk of depreciating assets…my car is not an investment, I couldn’t given a hoot if it depreciates any more than I care that a £10,000 holiday doesn’t make me any money!

PCP is the most financially efficient way for us to manage our cars, we are a high income family of which the payments are minuscule to our ingoings, cars bring us joy and we want reliability with low maintenance, it’s not an area we scrimp. We invest in property, pensions and other investments, they are separate things.

I wonder if some of the resentment towards people who lease/finance their cars is from people with bad credit scores who are unable to do so themselves?

I doubt it. I see it as a sign of an economy that relies on debt and if and when the credit taps are turned off lots of people are going to be stuffed.

there is no debt involved in leasing a car because you're not borrowing money to buy a car, you're renting (leasing) a car - the car never actually belongs to the person driving around in it and you simply give it back when you're done with it.

Yes, but the car manufacturers are selling the car to finance firms, who themselves rely on a cheap/steady flow of loans etc, which may well be impacted if loans become more expensive or if the UK becomes "down graded" as lenders to the finance firms may regard their investments as higher risk.

Is that honestly how you view it? That’s crazy. You are signing a contract to lease a car for a set time period. That’s a debt 🤦🏻‍♀️

Tbf, you have no idea what disposable income people have.

You can guess, but I very much doubt you know the ins and outs of their mortgage payments, whether they’ve had inheritance money, what their salary is. You’re just making assumptions 🤷🏼‍♀️

I know someone who is a SAHM with a fancy car, her DH says he is an engineer (which covers all manner of jobs from 25k semi skilled ones up to phd level/business owners). They live in a big house but her dad died and left them a load of money so they have no mortgage. People on the school run wouldn’t know all that.

No it isn't a debt. It's just dawned on me that you and a lot of mumsnetters don't understand the difference between leasing a car and financing a car.

I lease my car which means I rent it. I don't have a debt or owe any money on it. If I rent a $200,000k house does that mean I'm $200,000 in debt? No of course it doesn't. I rent my wifi and broadband and sky tv too, I don't own it but it doesn't mean i'm in debt because of it.

It is considered debt…it’s a contractual agreement to pay a certain amount over a certain period of time. If you write off the car you are still liable to pay it! (Unless you have gap insurance that is…)

it is also considered a debt when you apply for a mortgage it’s part of your DTI Ratio…

Normally we get a two year old car and drive it until it hits about ten or starts to fall apart. Last Autumn we broke our own rule and bought a brand new Phev seven seater. After getting some deals and trading in we got it for just under £50k, and it was mid level finish. The only reason we could do it is due to inheritance after losing three parents in the last few years, so after doing home improvements we decided to buy a new car. I love it, but it was a one off and not something we will repeat when we finally trade in. We know the value drops the minute you drive it away.

when we do the small car upgrade we might do it through PCP on my business as you can save a fair bit.

Also, .I would be more tempted to get an electric car on PCP as the technology changes so fast.

I always leased but bought a 5 year old Mercedes cabriolet with some of my tax free pension lump sum recently
i absolutely love my beautiful car and the fact I bought it outright somehow makes it seem so much more precious

I hardly do any miles so if I was in dire straights and needed the money I could sell it for very similar to purchase value

forgot to add my boys are grown up so I don’t need to worry about ferrying them around, and i also bought them a smart car to share

Buy outright, a year old. Hope it's reliable, look after it, aim to keep it for 10 years (do a low mileage), while building up savings for the next one. Wasn't always like this though - back in the day, have had car loans and company cars.

Actually I’ve had lease cars that don’t show on my credit file
there was no option to buy, I was literally renting a nice car that they would always own

I’ve never leased, always paid cash for a decent car then driven it to its death, but DH recently bought me a brand new BMW for my birthday which I just love. I ordered all the extras on the list. We are old, and he had a bit of a fuck it moment I think, no pockets in a shroud!

Enjoy driving it @Mumblechum0!