how did you afford your new car

[katak]

I know that we need a new car soon. We are stillpaying off the personal loan taken out to pay for our last (second hand)it-ends in 6 months.

I just want to know, hoew do people afford to get their new new cars. I mean, so many friends,parnets at children's school, regularly seem to have brand new cars- and often they are two car families- but now I've researching the cost of cars, I just do not see how an average wage-earner with a mortgage can have enough money to buy a car? Do most people borrow a huge amount to buy the car? I am really baffled. Our loan was fairly small and spread over 5 years- it was the only way to afford the absolutely necessary car. But our repayments are much lower than any of the payments I've come across regarding paying for a new car. Even secondhand cars are on average now £10000+ (don't want to get an unreliable one)for a family sized car.

think some people lease them

leasing still involves massive monthly payments

The only brand new cars we have ever had have been company cars. We pay a lot of tax for dh's current car but it's still a lot less than paying for a new car. No way we could afford one otherwise - the most we have ever spent on a private car has been 6K.

If you have a half decent car you can get a lot in part ex for a new one - FIL gets a new car every 3 or 4 years and trades in his old one which is generally immaculate and low milage for age so he gets a good deal for it. He shops around and plays one dealer off against another, ie Dealer A offered me this deal, how can you improve on it? And then takes the improved deal back to Dealer A to get a yet better deal.

We've just bought our first ever new new car. They took our old car in part exchange (paid less than the Parkers list price, but more than it was actually worth IMO because it had a lot of things that needed doing to it, wasn't immaculate, and had a high mileage).

We paid for the new car in cash from our savings. The dealer would have preferred us to have a finance plan (that's where they make their money), but we wanted to pay and be done with it.

I personally would never buy a new car on principle - they depreciate about 30% in the first year and during this time they also show up the majority of their 'niggles'.

I bought a year old car this year and I will drive it till it dies. It'll probably be the last petrol car I'll ever have because of oil running out.

We never used to buy new cars but have recently discovered that being in unison the union we get 17% off new vauxhall - saved us about 4k on dh new car which was great.

We gradually traded up overthe space of 10yrs.

So first year we bought a car worth £2K, next year a slightly newer model worth a bit more etc.

About 1/2 of the value was made up of a part exchange + some savings we had built up by banking excess cash after we paid of the previous loan - about 4m worth + bonus + shares. We got about 1/2 on a loan from a bank.

Remeber if you gradually trade up your car every few years, the part exchange value increases every time as the old model is still newer/bigger.

Some people just change every 1-3yrs by topping up existing loans. We did do this once and got stung on interest. I would never do that again.

Our car loan is just coming to an end. I am happy with my 3yo car - have no plans to change it. The monthly repayments we will save will come in useful if/as the credit crunch develops.

Sorry the summs in the middle related to our first brand new car which we bought 3yrs ago.

I would never buy a brand new car again, they just lose too much money, I would always buy one about a year old you can save 4-5K on it and it's only done a few thousand miles.

We used trade in + DPs bonus for a car this year.

We saved up, and plan to keep the cars until they are ready for the scrap heap.

Ah you see that you are thinking about owning a new car when the mindset you're interested in is having a new car, it's different. They only think about the monthly payments and will stretch out the finance for 5 years to make it as cheap as possible and when they want a new car, then roll the finance into the new one and stretch out the finance again so the monthly payments are low, negative equity isn't important when you have a fancy new car and they are not interested in owning it, even though its hp, in essence they are leasing it.

I have a lot of friends and colleagues who do this, we have finally gotten out if this cycle by buying in cash second hand, they still have lovely new cars, I have the satisfaction that I own my (depreciating) asset.

We - well DH, his car - decided to go for the new car, finance/leasing thing this time. We were both dead against it for ages, thinking that it didn't make financial sense, which it doesn't really. however, when we worked out what DH'd paid for his last car (2nd hand) + garage bills and divided that by the years he'd had it we realised the monthly payments on a new car weren't that much more.

Obv he had to put a deposit down too, and when the 3yrs are up if he wanted to keep the car he'd have to find another few £k. But the idea is he trades the current car in for another new one, the monthly repayments stay the same and he always has a new car.

It's worked out well for him as he needs a decent car for work and the major pain in the arse about the old car was not only the garage bills but the unreliability & inconvenience. If there's anything up with this car he gets a courtesy car (usually a better model, to persuade him to trade up I think!.

The down side is that for many people once you start it's difficult to get out of because when you're spending cash on monthly payments you can't save up to pay it off or to buy another car. We decided to go for it because DH has his own business and has the possibility of finding a lump sum if he needs it.

I bought new by financing one. Pay £169 per month and as long as I can afford to pay around this amount I can get a new one every 3 years.

A car costs money be it second hand, paid for outright or financed. I would prefer not to own one but due to work I don't have that choice.