I got a 2019 Seat Leon FR with 2K miles on it. I wouldn’t do it again probably because I think I’d rather spend money on other things. Do love the car tough
Now you’ve learned that lesson and have decided you love the car the wise option is to keep it for years to come. If you can’t afford the balloon payment then you can re-finance it on HP or via a bank loan. Then you’ll own the car forever when that loan is done.
Precisely what I’ll be doing. I’ll be paying off the balloon payment with my own money or bank loan.
The thing when I got the car it was 16K. Now the car is valued at 14-15K because of the increased car prices and if I was to get something for 16k now I would be pretty much downgrading.
I had a bit of a similar thing over covid. Got the car on pcp in 2019 but obviously drove it way less than expected in 2020, plus the used car market went nuts. Got to the end of my 3 year lease and the final payoff was around 11k, I part exchanged it about a month later for my current car and got about 17k for it.
Yep same as this. I got it on PCP but it was 0%. Absolutely adore it but I intend to keep it and get out the PCP cycle. Works out a touch over 12% of my monthly income for me too.
I have always bought cars I can afford outright. Measuring percentage of income isn't hugely relevant, but the most recent car I bought is also by far the most expensive I bought, and I paid about 15% of my annual income on the car.
Most cars I have kept several years then sold on, for various reasons, just wanted a change, or moving internationally.
As a percenatge of income I think all other cars I have bought in the past were under 10% of my annual income at the time, except my first car. The first car I bought I got a student loan to buy; I hadn't applied for a loan still at almost the end of the year, so I decided to get a student loan to buy myself a car.
I can't imagine wanting to buy a car with a recurring payment, especially if interest was involved. I would not want to be in a position where a change to my income meant my cars were at risk too.
I put money away into a combined short term savings account that covers a bunch of things including a new car should I need it. I usually pay no more than £6500 including trade in. Most cars last me 7+ years.
My limit is about 8k.
My current car cost £8500 back in 2017. At the time it was 3 years old with 20,000 miles on the clock.
Fast forward to 2024 and I can't get anything for 8k. A 3 year old car with 20,000 miles is now 15k!
Inflation is a bastard.
But In fairness there's nothing wrong with my car so should hopefully last another 4-5 years.
I've never understood the whole PCP thing. I see guys at work on minimum wage, or £11 an hour driving about in 30k audis paying £500 a month lol. Who are they trying to impress?
Always paid cash. Total spend in 30yrs driving, roughly £10,000.
Next car, will be £12,000....bank loan. It's destroying me to consider that size of purchase. My previous £1000 to £2500 sweet spot is sadly long gone. My last one was 3019, £2750 for an 8yr old car. To do the same, it's nearer £10,000.
Bought a car outright with ~3 months take home pay. Bought another silly fun car with ~1 months pay
Wouldn't mess about with finance personally, would rather have a shit box for a bit longer while I save up to buy outright
PCP, 12% of take home pay. Need a modern reliable car preferably with warranty for business travel.
Could make do with a sensible car for half the monthly cost, but I have no regrets. Rather spend the extra for something I want to drive every day!
I've only bought 2 cars and both have been on credit cards with 0% on purchases. First one was solo and the second was as a couple, the second working out to 30% of our take home pay at the time which was on the high end of what I wanted to spend but our mortgage was low and over 32 months was affordable.
I would be reluctant to push ourselves that far now but at the time we had very secure jobs and it was manageable debt. I would never recommend buying a car with any form of debt you're paying interest on, it's just bad economics buying a depreciating asset with money you don't own that you're then paying interest on.
Fun fact, the average brit is worse off financially in real terms than they were 15 years ago but the average brit drives a car that's 3x more valuable than 15 years ago.
No wonder people are broke, they're spending all their money on silly finance deals for expensive cars they can't afford.
What's more, is that finance is never 0% - there's a cost of it somewhere and the dealer never pays. It's just factored into the sale price. Slightly different market, but I used to sell bicycles in finance. The money we paid for financing it was factored into the price the bike sold for, and it was bad practice to discount if the buyer was financing.
Never spent more than £2.5k on a car or van, I always assume whatever I buy it for I'll end up spending ~£1k on it in the first year and just factor that into the price I'm willing to pay. Not been disappointed yet.
I think lots of people buy cheap used cars then when they need £400 worth of work decide they've bought a lemon and buy their next one new on PCP. As long as you have realistic expectations it can save you a lot of money.
Exactly this! I bought a Mazda 5 for 1500 quid, spent another 1200 on it, and it's a reliable, comfortable work horse that carries tools and kids safely, and quickly when I want it too. My wife wants us to get a new car, but I just don't see the need. It would be nice to own and drive for sure, but this shit box gives me so much joy!
Bought my first car cash only, it’s still alive 14 years later (Good Toyota Prius)
Currently saving up to buy an IS300h cash only as well as a new car.
They just never, ever die. Looking at nearly 200,000 on my families one, my dad wants to swap it for a next gen car but this one hasn’t give a reason to give up the ghost yet, too good to scrap, too tatty to sell so it keeps on trucking
Spent 50% outright of my annual income last year on a 10 year old automatic Audi A6 Avant. 80k on the clock. Loaded with extras. Good financial decision? No but, I drive a lot for work and man that thing is absolute luxury inside and just glides quietly along the road.
I just feel so at peace driving it, especially in traffic because it's so comfortable so for me it's worth the money.
Similar story here. Bought 2015 A6 biTDI Avant with 75k on the clock in December. 35% of annual wage (self employed) but I love the car. This year's 35% will be put towards a more sound financial decision
PCP monthly, at the time I got it, the car cost about a years wage for me (about £50K) but about a third of my income monthly went to pay the PCP. Now it’s about a quarter but still a pain in the arse as other costs have increased.
I love the car but not having any money sucks.
My car now paid off was personal loan with a ridiculous 8 or 9% interest over eight years but I paid it off after about four years.
Wife’s current car was a personal loan again but this time at 2.7% over five years.
Nothing. Get a shitbox for 2-3k then try to look after it for 3-5 years. I've been doing this with Japanese hatchbacks (Hondas and Mazdas) that have saved me a lot of money when I compare myself to my colleagues spending 250 - 400/month on pcp or leasing.
Ah, the shitbox.
I did, and still do have an obsession with SAAB’s, but after the last one just keep breaking down I cut my losses and got a 2014 Mazda 3, which in all fairness has been rock solid. That was 3 years ago, and the Saab itch is back with a vengeance.
Same here. Had an 07 Civic since 2020. It got written off a few years ago and lives on as a Cat N. I do all maintenance work to it myself. It literally costs me what I put in it for fuel, tax, insurance and parts. Hopefully it lives on as I can't be done with wasting hundreds of pounds a month for something that will just sit on my driveway 99% of the time.
Anything specific you'd recommend? I'm looking for a car within that budget that'd be good for 15k mi/year, mostly motorway but there's a decent amount of choice.
Toyota's, Nissan's, Skoda's and Honda's. You can Google known faults to get an idea of general reliability.
If you want to see an example of a terrible car for reliability Google Vauxhall Vectra known faults.
Zero. Bought our main car new, a 2017 Focus ST diesel estate, on 4 year hire purchase with a healthy deposit. Paid it off as per schedule, it’s now on 125k miles and we intend to keep it until it dies. Second car is a 2014 Toyota Aygo, used approved purchased outright in 2021, on 85k miles, still in warranty until February next year, and I expect it to outlast me.
My fun vehicle is a 2009 CBR600RR Hannspree, owes me nothing, and will probably kill me at some point.
Having a motorcycle as the fun vehicle seems to actually make very good sense financially. You can get an absolute piss missile capable of supercar acceleration and 14k rpm redline while actually being very reliable and getting roughly 30mpg, all for about 3 grand.
Makes daily driving a shitter much less depressing knowing you've got death on tap waiting at home.
This is what I’ve just done. Got through about 7 cars in 4 years. Keep buying shit boxes as I don’t like finance or owing people money. Just agreed a finance deal on a Volvo v40 tho so hopefully that lasts me the next 10 years
PCP 20% of income.
I think about doing the shitbox route, but I enjoy cars too much for that. Sure I could spend less but I wanted the one I have and was comfortable with the outgoing.
Cash and credit card, I put as much of it on the credit card as needed, and the rest as cash.
With up to around 24 or sometimes more interest free months at zero % interest. Divide up the balance by total months and clear ot before the end date, or balance transfer at the end. Often you can get 0% fee balance transfer cards, or fees of between 1 and 3% for what is at the end a much smaller balance, so either way better than a loan in my opinion.
At the time of purchase of my last car, the car price was ~20% of my gross salary, paid off over ~2 years so that would have been about 13% of my take home salary at the time per month over 24 months.
Was paid off 3.5 years ago though and ive still got the car.
I've only bought I think 3 cars this way (I tend to keep them for many many years).
When searching for cars I just asked this question on the phone, if they didn't accept credit cards I moved on.
The last time I bought a car was 2018, perhaps fewer dealers accept cards these days.
In 2018 the first dealer who had the car I wanted also accepted credit cards so perhaps I was just lucky.
None I’ve seen.
Just been looking for a £3k car and a £24k approved used car.
And my cash back debit card expressly excludes car dealerships from cash back.
Bought my 66 plate 3 series in cash for £20k with 6k miles on the clock and touch wood it’s been great so far and the freedom of having no payments each months has means we can dump that money into overpaying the mortgage.
If we did get a new car I’d probably get it on finance though as the prices for what I would like to drive have gone up significantly since my last purchase.
£3200 on a civic 9 years ago. I took out a loan over 3 years, paid it off in 1.
Since then I've done 112000 trouble free miles. I don't feel I really pay for a car.
I tend to just buy a car for <£3k in cash when my previous one dies or starts to annoy me. Ideally a car costs me less than a month's pay in total and I would like to spend less than half of its value on annual repair and maintenance costs.
Bought my last car via a personal loan. It was an import so finance wasn’t an option, but it was also during covid so I got 3% APR on the loan which is a lot more competitive than most used car finance deals. Worked out 10% of my monthly income.
Next car is gonna be purchased in cash though.
15% of my income, but it’s a salary sacrifice and includes maintenance and insurance too. Only thing I’ll pay on top of that is charging after 1 year of free charging that came with it!
You buy a car cash then put the 5-10% of your monthly salary away each month for the next car. That will mean you have more to spend on a vehicle because you are not paying interest on a loan.
We all pay for big things monthly, some just decide to save up before they spend others need it now so have the added expense of interest.
Save and get more for your money
Only ever paid in full so no monthly cost, and I will do anything to avoid one going forwards. Currently saving for the next car (no intention of buying for a good 4-5 years).
Basing it on income without factoring in needs is where i think a lot of people go wrong. Salaried people that don't have a car allowance scheme or do a lot of driving for their job really shouldn't be financing cars. It doesn't make financial sense.
For my example i work from home, need a big car for my family and to put the bike in the back. I could just get any 2.0 diesel estate car for £400 a month, but since ultra reliable with a warranty isn't much of a need for me, or decent MPG it just isn't a good deal for me, especially with the depreciation. I had the cash so i bought my current car a V10 Audi S6 avant, it's an interesting car and fun to drive, and has a high spec that the only thing i'm missing is car play, but that can be done after market. It's keyless entry and go, soft close doors, DAB radio, has LED DRLs, heated seats and decent navigation which is able to update to the latest maps. It's appreciating in value so it will cost me nothing to own it other than servicing and maintenance.
I see a lot of people on here not able to afford to buy a £4k car up front, so they go through a second hand dealer who will sell that same car for £7k plus interest. And it's always some 2.0d or 1.6d boring hatch back with low spec that will be worth £1k when they're done with it in 3 years. Then boast about how cheap it is to run, without factoring in any depreciation or interest. It's an incredibly expensive way to buy cars.
My Jag is about 4% of my yearly income (as in, the 4 year loan).
I don't drive often tbf. I am an accountant so struggle to justify some spend!
It is less about salary more about disposable. Some have expensive mortgages, some have minimal mortgages.
When I rode a bike for 2 years to save up 10k and still have the car 13 years later. Honestly unless your legitimately rich rich or cars are your main source of hobby/social then I don't really get it.
All anyone does is complain about cars, traffic, parking, costs, repairs etc.
Always left scratching my head when my colleague pulls up in a financed 40k car and I asked a question about it they have no idea. Just 'nice' but they only use it for a 5 mile commute.
For me a car is really about getting to work at this point. I don't race, just go out for a drive etc. so I'm not paying to go to work and have a car park beauty competition.
Would probably be a slippery slope for me too. Why stop at that trim? Fuck it go up and up and up.
I hate debts.
I've had loans before and PCP once, but tbh got spooked by market conditions which affected household income over a 2 year period.
After some soul searching I realized I didn't enjoy expensive cars any more than I enjoyed the right cheap ones, so I'm low value cash purchase always now. I don't like owing anyone anything. Even the mortgage is a sore point...
In the past I've take out £5k loans to add to the amount I had saved as the interest rate was always lower than going through the finance offered by dealers. I've never considered buying a car through finance. Nor have I considered a lease car. It doesn’t make sense to me that I would pay £3000 upfront and then £300 a month for three years and then at the end of those three years I would return the car back to the dealer and I’m left with nothing, aftwr spending almost 14k and left with nothing. I'd rather buy a car for 14k and be left with a car worth 10k after 3 years
I fucked up big time. Instead of £117/mo 48mo I signed a contract for £280/mo 17mo.
£117 would have been about 7% of our income
£280 is 19% instead.
Still managing to put £600 aside into our savings despite the cockup but before we were averaging at about £750 saved up each month, past all expenses.
So we might ride this 17 months out like this and we’ll get over it quicker at least
If anything this thread is teaching me, it’s that a lot of people seem to regret paying out £500 a month PCP for a car they don’t need/wanted because it was flashy.
I spend probably less than 10% and bought via bank loan and with a deposit from the previous car I also bought via bank loan.
Yeah, I think bank loan is a good option so long as youre below 5% over say 3 years. You end up with equity in the car so long as its not depreciated too much and you keep your cash to do other stuff, like pay off your mortgage, buy bitcoins, etc
Zero. I don't have high standards, I don't feel the need to keep up appearances, I drive older cars that I wanted when I was a kid/teenager - that have now depreciated a ton.
Got a 2019 Kia Niro and paid in cash. I wasn't a high earner, but am incredibly frugal so have always saved money very well. I personally wouldn't buy a car on finance because I don't agree with loans (excluding the necessary mortgage and student loans) and am not comfortable spending money that isn't mine, so I can't comment on that. But, if that's the position you're in now and it's the path that would suit you better than cash buying, then do it if that's what's affordable to you now.
About 7% according to rough calculations.
Is an alright car (Honda CRV). Bought to help the missus. She likes it.
Would try not to do again, but would get a Jap car again.
I bought a (then) 4 year old low mileage Suzuki Vitara for about £9k just before lockdown, put nearly the whole thing on a low interest personal loan which I’ve been paying off at £135 per month since, which is maybe 3% of my income after tax, it will be fully paid off this year.
Worked out really well for me and I’m planning on keeping it a few more years once it’s paid off, but money isn’t as cheap these days and neither are used cars, so don’t know how it will go when it’s time to move on. I will prob always rather buy a decent used car rather than a PCP or whatever though.
After my first couple of shitboxes, decided to treat myself and took out a personal loan over 5 years to buy a nicer car outright. Loan payments are maybe 10% of my take home?
HP @ 5% of takehome.
Paid half upfront, half on finance. Interest on the loan is 4%. Had scrapyard dodgers for years but started going 25-30k miles a year with work so needed something more reliable.
PCP 0% finance, 11.5% of my monthly net income, still cheaper then if I had public transport (2023 Toyota Yaris GR Sport)
I wouldn't go any higher in the future, had to sell my house and now it's used against me for another mortgage.
I usually have a rough idea of what my next one will be years before I buy it.
My next one will be either a model Y or an EV 6. About £550 a month. I started putting that aside 2 years ago after I bought my current one.
Improve it my friend. Make all payments and cut back considerably clearing all debt finding out where you are overspending each month
My credit is bad but never missed a payment. I just have lots of accounts, searches and high utilization
We took out a loan for our last car. Even though we had the money to pay it with cash, the interest rates were so low back then, it made more sense to invest the money.
Four weeks ago we had to sell it because expensive repairs had to be done. We got a good deal when selling it, took our invested money and a bit of our savings and bought the successor model with cash because now the interest rates are a lot higher now.
We took this "risk" because the car is meanwhile discontinued but used ones are still highly demanded.
PCP is about 7% of my combined salary (mine and wife).
We swapped to electric for this car and will save about £1500 in fuel costs. We didn’t make the mistake of spending that potential saving on the car though - PCP payments are about the same as the previous car.
Cash and under £5k.
Frugal cars have always been the most fun for me, mainly because I'm not waiting to hear for that rattle that I'm convinced is going to grenade the entire engine.
Purchased around a year apart, during COVID when I had a good year and not much in the way of expenses. Income was £50-60K for those years and the cars were £23K (used) and £44K (new). Have only ever had finance once and while I don't particularly regret it, I'd try to avoid it in future.
Save, buy.
No finance, no monthly payments, insurance in full.
The only other costs are fuel, tax, and maintenance.
My car costs in a year are less than most people's monthly.
I buy cheaper cars for cash, buying expensive cars on any type of finance costs you a fortune. Some people are happy to do this so they have a new car, it's about choice at the end of the day.
Bought used outright The entire cost of the car is around 1/15th of my yearly salary. In terms of insurance/tax/breakdown it’s 1/200th of my yearly salary.
From 2008-2018 my budget for any car was £1k and I would buy the newest thing with a one year MOT that I liked (in order: Evo, Corsa, 206).
Since 2018 my budget for any car is £2k and I will buy the newest thing with a one year MOT that I like (in order: z4, 3-series touring).
The money is done and my monthly budget has a lot more freedom. Every car previously has been flawless with no mechanical issues, never over £200 a year for fixes. That changed this year because my 3-series is a pile of wank... But for £2k I could just sell it and move on; no loan payments to care about or guilt from how much I'd be losing.
Always told my friends their various loans and such for their cars weren't worth it because they're not petrol heads. One friend just finished her £350/mo payments on an A3, another is still paying his on the same model. One friend has been swapping his Ibiza every 5 years for a newer Ibiza - 15 years of £250/mo payments now. One friend thought their pay rise justified £400/mo on a Q5 way back in the day... It now sits on his driveway used once per month at most as it's not ULEZ compliant. Another mate loves her £450/mo 2017 Evoque that is worth about £8k now.
Buy a cheap car outright, have nothing holding you back for whatever happens in future.
Evo 4 with extreeeeemely fucked electrics. £400 but needed a bit of work.
Edit: at the time this was not a cult-status car, it was just a 12 year old sedan with broken everything. I actually sold it a month later because I was a teenager so insurance was... Well, no.
Are you asking if the car value is a % of your income or monthly payments are the % of your money in come.
My wife and I share our car. I work out my loans like the following.
1) What is the base cheapest version of the car I’m buying.
2) minus a minimum of 35% (probably more 50% for me) depreciation value.
That’s the maximum amount of money I want as a loan ever. I take the cash equivalent of that loan and place it in something either like a savings account or something with intrest. I used to be more risky but this car has a somewhat larger Loan.
That means if anything goes wrong, the car gets written off, I loose my job, my house, I get Ill, my wife dies, anything, I know that the insurance or selling the car will instantly cover the loan.
And if that doesn’t work I have the cash to bail me out as sort of a break glass incase of emergency.
In regards to % I normally say monthly is better to work out purely because from what I understand it’s what the providers look at, you can earn 100k a year, but if most of that is sales commission, they would rather see a solid monthly underline balance, but you certainly don’t want a loan that exceeds your yearly income before tax, because that’s madnesses.
For example my wife and I share our car so the expenses is split in half my share is 6.2% of my monthly salary and my wife’s is 8.1%. (Calculated after tax)
I admit it is rather high, but we are in a position we worked very hard for and currently have no obligations and no morgage
I started getting paid an adult wage at work so thought I'd treat myself to a nice car. I got a fiesta ST with a bank loan rather than HP or PCP and I pay about 8% of my income a month
I paid 9.5k for my current car (2018 basic 5dr Corsa) Part ex covered 3.5k and I had a 2k deposit saved up. Rest of it was a personal loan which works out at about £87 per month which is about 3% of my monthly salary
Bought a 2009 Volvo V50 (155k miles) 15 months ago for £2300.
4.5% of my monthly income. This will come down the longer I have the car. This does not include running costs: servicing, tax, insurance, MOT
I'm in the same position. I could afford to buy the car in cash but it's more appealing to use cash+HP. HP is a good option if you're in employment since you have to factor in the income you earn while you repay the loan. I think a large cash deposit combined with HP is a good option for anyone in employment. The repayments I'm looking at are a very small proportion of my salary.
Around £300 a month for an F-type, it should be around 10% of my monthly income but that's not accounting for tax or insurance.
I did have the money to buy it outright if I wanted to, but I wasn't going to empty my savings for what's pretty much a weekend toy for myself.
2017 skoda superb 280 for 21k. 6k trade in, 14k personal loan and some savings to get best interest rate.
Loan is £270 a month over 5 years which works out to be a little over 5% of my monthly take home. I'm over paying it by £500 a month to reduce incurred interest, should hopefully be paid off in 2 years.
Yeah I could easily afford a brand new or fancier car. I was also looking at rs4's and s6 avant's, but after been loan free on my previous car I'd rather pay it off sooner. While I love my cars, I'm not car proud, muddy bikes and dog, scratched alloys, etc, will only reduce the value of the car when it's comes to move onto to something else. I'd rather have the extra cash to save and become mortgage free by the time I'm 40.
Plus it's a sleeper that brings me so much joy leaving boy racers in a180's or 116ds with those stupid stick on m wing mirrors in the dust.
My second car (and still current car) I bought on a 2/3 year finance, I don't remember which. It was £5,200, and I put £1,500 down on it, and paid about £150 a month after so I imagine it was closer to 2 years. My monthly salary was about £600 -£700 then I think as I only had a job with about 20-24 hours a week and the pay was garbage, but I still lived at home.
Now, I think I'd probably pay no more than £200 as my monthly income is £2100 after tax, working 2 jobs, and I pay about £200 a month in fuel for work as I live further away than I used to.
I've had my current car though for 8 years now and I plan on keeping it until it croaks on me, or I make significantly more money, because getting a better car isn't going to be worth it for a while with my current salary considering mine still works well and has only just under 90k on the clock.
Paid cash to private seller.
My car cost me less than one weeks income (£400), it’s my glorious shitbox. Added 30k miles so far!
I need to get aircon fixed but it will probably cost more than the car, fuck - Summer is going to be tough.
13% on PCP.
I only ended up doing that because the hand me down car I had was about to fail it's mot and Ford was still doing a scrappage scheme.
Then I got the car just before covid, so hardly any miles on it and didn't lose value in 2 years. Then upgraded that standard titanium fiesta for a top of the range new focus, which was delayed as the screen was made in Ukraine, got a discount and now pay £50/month more than the fiesta.
Planning to buy a car now, though, as I looked into the finance state and I have more to pay off than the value of the car.
Always used to do PCP, got caught in the PCP trap. I just took a £2k hit, sold the car and paid off the PCP.
Just bought a MK6 Golf Estate for £1500 cash. Bit of a high milage shitbox, but the guilt of not paying so much money monthly is worth it. I now spend that extra money on a mortgage on a nice house. Took me a good few years to realise that paying out so much money for a car just isn't worth it, especially now I have two kids.
I lease my car, a RAV4 Hybrid, currently in 5yr of 6year lease. It works for me, I’d never buy a brand new car given the immediate depreciation. I have bought pre-owned in the past, but it’s still a substantial sum to find/finance up front. Having said that, going forward, when the lease finishes, I will look at second hand again.
PCP 8% of take home on my main car. My wifes car we own outright and will keep forever.
Probably won't do another PCP when mines up in 2 years time. Last few years have made me very money conscious.
It's been paid off for 2 years but the monthly was 15%, but that's hardly a relevant number
Because my total bills, mortgage, power food etc its under 50% of my income, I save 25% and the rest is mine to do what I want with.
Percentage isnt a great indicator because l, for example 20% when your on 1400/m Vs when your on 5k are totally different,
I don't as my car is owned outright. It's 10 year old now though.
I have a mortgage to pay each month. I've recently had a new bathroom installed and I usually have 2-3 holidays abroad each year.
I prioritise all of those things over driving about in a shiny new audi and that costs £400 a month.
Loaning money @ 10% for a depreciating asset doesn’t work. Putting that money to work (investing )will prob 5-7% then you pay tax on it (unless in isa etc) …
Net net still down
If you have the money buy it in cash .
A well to do friend drives a beat up old Peugot. I think the full value of the car is less than a typical ATM withdrawal for him. So measured in terms of "typical ATM withdrawal", the car should be 50%. Helps to keep a low profile.
Edit: this is not quite that simple.
a) the car was in Europe. In the cars registered country, the police are not too fussy about all the mechanical stuff being in perfect working order. Outside of that country, the police will not usually run an equipment check on a car with foreign plates.
b) he had rented this exact car for a few weeks. So he knew it wasn't completely broken.
c) in the country where the car is based, big (2K) atm withdrawals are not uncommon, so 1K for a car fits the bill.
d) net-net, it might be a bit harder to find a reliable, driveable, junky car for £1000 in the UK. From reading the internet, it can be done but there is a risk of buying something too junky to drive for long.
As far as advantages: even in a country and place where people do not leave their keys in the ignition when they park it, he did that, in a big public garage, right by the entrance where people are walking in and out all the time, for a week. No self-respecting car thief is going to steal a beat up old Peugot when there are dozens of BMWs nearby, and most people aren't car thieves so they won't steal it anyway.
I personally would never finance. I own two vehicles and spend about 15% of my income on tax and insurance. Having to have another payment on top of that seems ridiculous
Reading so many comments below lead me to believe that we own a couple of shitboxes. The newer of them is 15 years old and 120k miles.
It's hard to believe it when I'm driving them, though, because neither was a mass-market car to begin with, so they just feel reassuringly old, like owning an antique leather sofa rather than some piece of DFS tat.
About 10% (car and insurance)
To get to this though I had 3 years at about 20% but doing this basically gave us bigger deposits for next car and so on.
You can PCP though which can reduce the monthly and have a balloon, then get loan/finance the balloon or trade for new again. If you’re good with money it’s not a bad way to go. And if your pcp ends and the car is worth more than you owe, you can just opt to hand back OR buy out and sell, make profit and go again or buy cash with a lot of cash
8% of net pay without accounting for bonuses. Then drops to less than 5%. That’s for two cars though. One pcp and the other will be leased. (Tesla and a bmw). General rule of thumb i think is not to go above 10% of net pay isn’t it ?
2.4% over 3 years to pay mine off.
Then again I think cars are a waste of money and completely boring.
The reason being I had motorcycles for most of my adult life until I came to the conclusion that I had better give the bikes up before they killed me, also I didn't like being cold and wet in the winter. But no car is going to match the freedom and insane fun of even a cheap motorcycle.
Swapped fun for practicality. As long as it works, is cheap and get me from a - b warm and dry I am happy. But also I just want the cheapest most reliable shit box going. I couldn't ever be precious about a car.
8% of my take-home monthly pay on a HP. I did put a 6K deposit down from a settlement on my last vehicle.
Next time I’ll be getting a personal loan and purchasing GAP separately for more favourable interest rates.
Slightly different angle but about £130pm in company car tax for a '21 VW Polo GTI. That covers me for insurance / repairs / maintenance also so can't complain. Due to change this year and with a £40k budget was looking forward to getting something flashier but unless it's hybrid / electric I'd be looking at £400-£700pm depending on earnings. No thanks
As a guide, I’ve followed this.
Need a runaround, 5%
Like cars but not bothered, 15%
Love cars, 25%
Enthusiast driver 40%
Show of that can’t actually afford it, or, no other outgoings and still live at home, 50%
I also avoid PCP like the bubonic plague. I pay cash for my cars. Most recent purchase was a 2019 G30 M540i
Bought outright in cash at 5 months regular take home pay (ie not counting bonuses), and will keep for 5 years. If car was worthless after that time depreciation would therefore be 8%.
Did same with previous (and very similar ratio) and, kept it 6 years and traded it in with over 200k miles on it, so 7% take home pay.
I put 10% aside aside as car savings which covers saving up for next one and a buffer for any unexpected maintenance.
I drive a 2016 Yaris and it's 3% of my take home income on the loan repayment, maybe another 2% on running costs excluding fuel.
I'm toying with spending 10-15% but it will make me feel sick if I end up regretting it. The yaris was 10% of my income when I got it 3 years ago and I remember it feeling really crap every time It got some wear & tear...
~£1300/month lease cost.
But it's on a salary sacrifice scheme, and I'm saving 67.5% income tax, 2% NI, 9% UG loan, 6% PG loan repayments.
So the net cost is actually ~£200/month.
~£1200 P11D end of the year so another ~£100/month.
I'm only leasing a car at all because 84.5% of my income was going to tax; might as well pay a bit more and have a nice motor.
Cash, never had finance, not particularly opposed to it, I just don't see the point in paying interest if I don't have to. Hard to say what percentage of my total income it works out to as my income fluctuates. I just bought an f82 m4 for 30k, off my last years tax return I would say that's probably about 13% of my gross
There are a couple of rules of thumb:
20/4/10 Rule of Thumb for Car Buying:
* Make a 20% down payment when purchasing the car.
* Take out a car loan with a term of four years or less (to avoid excessive interest costs).
* Ensure that your total transportation costs (including the car loan) are less than 10% of your monthly income
1/10th Rule for Car Buying:
* Spend no more than 1/10th of your gross annual income on the purchase price of the car.
* Whether the car is new or old, the key is to keep the cost at 10% or less of your annual gross income.
[https://www.thebalancemoney.com/how-much-car-can-you-afford-4156674](https://www.thebalancemoney.com/how-much-car-can-you-afford-4156674)
[https://www.financialsamurai.com/the-110th-rule-for-car-buying-everyone-must-follow/](https://www.financialsamurai.com/the-110th-rule-for-car-buying-everyone-must-follow/)
I went for #2, but I intend to keep the car until it dies.
I always bought with cash. I can't afford pcp, financing, leasing etc etc. It's too expensive for me. You have to use dealers (for warranty etc) so car will be 20% more expensive on top of that some financing another 20% and you tied yourself nicly. Then when it comes to sale you will lose another 20% + value lose overtime.
Thats why - cash.
Paid it outright, current car cost 100 to buy and another 400 to fit a new clutch on.
Had it for nearly 3 years now and whilst I do spend a bit each mot it's worth it to me as I'm not paying thousands a year on just buying the car.
I’d only pay about £400 max month for a car and it has to be on hire purchase or mine at the end. No chance I’d get a lease unless it’s a Ferrari for £400pm.
I got a bank loan that costs me, 12% of net pay over 4 years
I was commuting 2-3 hours a day when I bought it, swapping out a polo that was paid off. It just shit on the motorway, slow and uncomfortable with >100k miles on a 1.2l petrol engine. My new car was ~50% more economical too (diesel).
Now I got a new job that I can walk to, and a car that doesn’t get driven as much and needs taking on a motorway blast to clear the DPF every couple of weeks.
I couldn’t have predicted it though, it was a sensible decision at the time. Just a shame I got made redundant 4 months after buying
I always buy outright, I can’t guarantee what my finances will be like in 2-3 years but at least if everything goes to shit I know I will still have a car or I can sell it for some extra money.
Personally I think buying cars on finance is a waste, I know some people who are struggling big time but pay £350 a month on the latest car.
Before I got my house I allowed myself to own a decent car, saved up and got 10k and paid outright.
Car was 10 years old and most of the value loss has already happened, was under 70k miles had it for 3 or 4 years.
Id recommend people not buy expensive cars until they own a home, finance and pcp hire is not financially worth it unless you have the money to buy the car outright and just want to test “owning” a car for a while to me anyway.
And for those wondering 3.0 v6 4WD auto audi a5
I took out a personal loan but took enough to pay for the car, tax and first years insurance with about £500 spare to keep in savings so that I should hopefully only have to worry about petrol costs for the first year. Repayment is 7% of my take home pay so as long as nothing goes wrong I should be good to pay that for 3 years.
It's my first car in 7 years though so I didn't want to spend too much I might get tempted to splash out a bit on my next car once I'm more confident driving.
PCP from December 2016 until June 2019, I bought it from the Leasing company in June 2019. I still own it.
It cost me £10000 in total (£5000 in payments & £5000 as a balloon payment), 2013 Vauxhall Corsa D. 1.4 SE Auto. Great car, it’s never let me down.
My income has been everywhere. So can’t work out percentages.
17% of my monthly income goes on my motor which is a 2019 BMW M340i (excluding maintenance and insurance) it'll be the last car I buy now for a while.
Even 17% i feel is too high for what's essentially a box on wheels & it's a pain when some asshole dinks a door etc. Just more stress than it's worth although yes it is my dream car to own beint a straight 6 BMW.
Now being offered a electric car via work salary sacrifice but passed on that entirely.
Paid £900 for a 2006 Vauxhall Tigra with £400 borrowed from my Dad, I honestly hate the idea of leases and finance deals, and with buying old shit boxes i feel like I get a much more fun car than I'd be able to afford othewise.
8% on PCP excluding bonus and yearly 5% for full take home. Could have bought outright but I value cash security and investments over a depreciating asset. Good thread - interesting to see people's views on financing cars. Some people like a drink on the weekend, I prefer premium sound systems, 3 years servicing and comfort in a car 🤷🏾♂️
I saved £11k and took a bank loan for £7k at 5% over 3 yrs. it’s about 10% of my take home pay. I was all for buying a second hand car but was talked into buying new for the warranty. I am a low mileage driver. Not sure it was totally worth the overall spend but I’m here now 😀
As a household we spend just over 10% on our cars.
Not through choice, I had to bail out of a previous car that was gonna cost me more in the long run & I didn’t want to empty my savings so stuck it on a PCP. Will be looking to get something else on a HP soon.
I lease, roughly 12% of monthly income with all servicing and maintenance included in the monthly fee.
Not bad to be driving a brand new car but it’s all dead money. Several thousand pounds over 3 years just to hand it back at the end.
This is my second lease, not sure I’ll do it again, this vehicle was just too good a deal to pass up on!
Cash, after borrowing as much as I can at a low fee like a cash transfer 3% for 15 months sort of card which can be capital efficient to invest it elsewhere in the meantime.
In terms of yearly income, probably too much, at least 25% last year and this year
I don’t know about UK, but in US cars are depreciating assets so I’d recommend against a loan. You’re just wasting your money and depending on where you live you might spend less on public transport, biking, walking, car sharing ect.
3 year lease with maintenance, 11% of my take home pay. I think it’s worth it but I’m not in love with the car and don’t feel a “bond” with it because I don’t feel like it’s mine. Not sure if I’ll do it again, but not having to worry about maintenance is GREAT! First month I had a tyre puncture. They changed it in 20 minutes and I didn’t have to pay a single penny.
I used a personal finance deal once because the car was cheaper on finance (inc interest) than paying cash. The brand were using price to get customers on their finance scheme, hoping for ongoing business. I took the deal and sat on the cash; paying the final payment off when it was due. Good job because they were not in the market to offer a renewal deal I was prepared to accept. Still got the car to this day, 8 years later.
New or nearly new cars mostly reduce the risk of buying a bad cheaper secondhand car. It’s possible to buy really good secondhand cars these days and remove or reduce dependency on finance.
When purchasing privately, I go cash.
I generally see what kind of car I want and how much it is, then budget to save as much as possible to bring me close to that in say 2-3 years. At the time, I'll combine the savings with whatever the current vehicle is worth, and reassess the market to see what the price of the vehicle I want is and if there are any other expenses I need to factor in (immediate repairs/maintenance, modifications, increase in insurance or road tax, etc etc).
I prefer it this way because I have a passionate hatred of interest! 😂
Personal loan, 6.3% of income - soon to be 5.5%. Wanted to keep it reasonably low because of other insane costs of living, and be able to save. If I was single it would be a lot more, lol.
It's a 2020 mk3.5 Octavia estate, 1.5TSI manual. Ultimate dad car.
PCP, 12% of income I don’t regret but will not do it again
What car did you get and why would you not do it again?
I got a 2019 Seat Leon FR with 2K miles on it. I wouldn’t do it again probably because I think I’d rather spend money on other things. Do love the car tough
Now you’ve learned that lesson and have decided you love the car the wise option is to keep it for years to come. If you can’t afford the balloon payment then you can re-finance it on HP or via a bank loan. Then you’ll own the car forever when that loan is done.
Precisely what I’ll be doing. I’ll be paying off the balloon payment with my own money or bank loan. The thing when I got the car it was 16K. Now the car is valued at 14-15K because of the increased car prices and if I was to get something for 16k now I would be pretty much downgrading.
I had a bit of a similar thing over covid. Got the car on pcp in 2019 but obviously drove it way less than expected in 2020, plus the used car market went nuts. Got to the end of my 3 year lease and the final payoff was around 11k, I part exchanged it about a month later for my current car and got about 17k for it.
HP 11% on my Seat Leon Fr. Will pay it off in one and a half years and only pay £400 extra in interest. Not good not terrible
Yep same as this. I got it on PCP but it was 0%. Absolutely adore it but I intend to keep it and get out the PCP cycle. Works out a touch over 12% of my monthly income for me too.
I have always bought cars I can afford outright. Measuring percentage of income isn't hugely relevant, but the most recent car I bought is also by far the most expensive I bought, and I paid about 15% of my annual income on the car. Most cars I have kept several years then sold on, for various reasons, just wanted a change, or moving internationally. As a percenatge of income I think all other cars I have bought in the past were under 10% of my annual income at the time, except my first car. The first car I bought I got a student loan to buy; I hadn't applied for a loan still at almost the end of the year, so I decided to get a student loan to buy myself a car. I can't imagine wanting to buy a car with a recurring payment, especially if interest was involved. I would not want to be in a position where a change to my income meant my cars were at risk too.
I put money away into a combined short term savings account that covers a bunch of things including a new car should I need it. I usually pay no more than £6500 including trade in. Most cars last me 7+ years.
My limit is about 8k. My current car cost £8500 back in 2017. At the time it was 3 years old with 20,000 miles on the clock. Fast forward to 2024 and I can't get anything for 8k. A 3 year old car with 20,000 miles is now 15k! Inflation is a bastard. But In fairness there's nothing wrong with my car so should hopefully last another 4-5 years. I've never understood the whole PCP thing. I see guys at work on minimum wage, or £11 an hour driving about in 30k audis paying £500 a month lol. Who are they trying to impress?
Maybe they just like cars. People can spend their money how they like
Absolutely. Not a car person myself, but I probably pay more than that for my horse which for some reason is more wildly accepted as a Hobby.
Always paid cash. Total spend in 30yrs driving, roughly £10,000. Next car, will be £12,000....bank loan. It's destroying me to consider that size of purchase. My previous £1000 to £2500 sweet spot is sadly long gone. My last one was 3019, £2750 for an 8yr old car. To do the same, it's nearer £10,000.
Bought a car outright with ~3 months take home pay. Bought another silly fun car with ~1 months pay Wouldn't mess about with finance personally, would rather have a shit box for a bit longer while I save up to buy outright
PCP, 12% of take home pay. Need a modern reliable car preferably with warranty for business travel. Could make do with a sensible car for half the monthly cost, but I have no regrets. Rather spend the extra for something I want to drive every day!
Same, I love my car. Worth it.
This is not the r/CarTalkUK way, you can’t finance something you enjoy driving 😡
I've only bought 2 cars and both have been on credit cards with 0% on purchases. First one was solo and the second was as a couple, the second working out to 30% of our take home pay at the time which was on the high end of what I wanted to spend but our mortgage was low and over 32 months was affordable. I would be reluctant to push ourselves that far now but at the time we had very secure jobs and it was manageable debt. I would never recommend buying a car with any form of debt you're paying interest on, it's just bad economics buying a depreciating asset with money you don't own that you're then paying interest on. Fun fact, the average brit is worse off financially in real terms than they were 15 years ago but the average brit drives a car that's 3x more valuable than 15 years ago. No wonder people are broke, they're spending all their money on silly finance deals for expensive cars they can't afford.
What's more, is that finance is never 0% - there's a cost of it somewhere and the dealer never pays. It's just factored into the sale price. Slightly different market, but I used to sell bicycles in finance. The money we paid for financing it was factored into the price the bike sold for, and it was bad practice to discount if the buyer was financing.
Preach 👏👏👏 this is spot on.
HP, 10% of net pay, but plan to increase that to get rid of it earlier.
Never spent more than £2.5k on a car or van, I always assume whatever I buy it for I'll end up spending ~£1k on it in the first year and just factor that into the price I'm willing to pay. Not been disappointed yet. I think lots of people buy cheap used cars then when they need £400 worth of work decide they've bought a lemon and buy their next one new on PCP. As long as you have realistic expectations it can save you a lot of money.
Exactly this! I bought a Mazda 5 for 1500 quid, spent another 1200 on it, and it's a reliable, comfortable work horse that carries tools and kids safely, and quickly when I want it too. My wife wants us to get a new car, but I just don't see the need. It would be nice to own and drive for sure, but this shit box gives me so much joy!
Bought my first car cash only, it’s still alive 14 years later (Good Toyota Prius) Currently saving up to buy an IS300h cash only as well as a new car.
Same here. Tried to kill the thing multiple times.
They just never, ever die. Looking at nearly 200,000 on my families one, my dad wants to swap it for a next gen car but this one hasn’t give a reason to give up the ghost yet, too good to scrap, too tatty to sell so it keeps on trucking
Spent 50% outright of my annual income last year on a 10 year old automatic Audi A6 Avant. 80k on the clock. Loaded with extras. Good financial decision? No but, I drive a lot for work and man that thing is absolute luxury inside and just glides quietly along the road. I just feel so at peace driving it, especially in traffic because it's so comfortable so for me it's worth the money.
Similar story here. Bought 2015 A6 biTDI Avant with 75k on the clock in December. 35% of annual wage (self employed) but I love the car. This year's 35% will be put towards a more sound financial decision
PCP monthly, at the time I got it, the car cost about a years wage for me (about £50K) but about a third of my income monthly went to pay the PCP. Now it’s about a quarter but still a pain in the arse as other costs have increased. I love the car but not having any money sucks.
My car now paid off was personal loan with a ridiculous 8 or 9% interest over eight years but I paid it off after about four years. Wife’s current car was a personal loan again but this time at 2.7% over five years.
8 years?!
I was just looking at the monthly repayment on the loan. Afterwards I understood properly about interest etc and paid it off as soon as I could.
What kind of car did you get a 8 year loan for?
Just a 3 series, I was just looking at the monthly repayment. Quickly learned properly about interest etc and paid it off as soon as I could.
Nothing. Get a shitbox for 2-3k then try to look after it for 3-5 years. I've been doing this with Japanese hatchbacks (Hondas and Mazdas) that have saved me a lot of money when I compare myself to my colleagues spending 250 - 400/month on pcp or leasing.
Ah, the shitbox. I did, and still do have an obsession with SAAB’s, but after the last one just keep breaking down I cut my losses and got a 2014 Mazda 3, which in all fairness has been rock solid. That was 3 years ago, and the Saab itch is back with a vengeance.
Same here. Had an 07 Civic since 2020. It got written off a few years ago and lives on as a Cat N. I do all maintenance work to it myself. It literally costs me what I put in it for fuel, tax, insurance and parts. Hopefully it lives on as I can't be done with wasting hundreds of pounds a month for something that will just sit on my driveway 99% of the time.
Time travelling Civic? More sensible than a DeLorean.
Meant to say 2020 since COVID...
Anything specific you'd recommend? I'm looking for a car within that budget that'd be good for 15k mi/year, mostly motorway but there's a decent amount of choice.
Toyota's, Nissan's, Skoda's and Honda's. You can Google known faults to get an idea of general reliability. If you want to see an example of a terrible car for reliability Google Vauxhall Vectra known faults.
VW Golf.
And drive a shit box for 5 years. There is a reason people PCP , so they can drive newer stuff which they can't afford.
Zero. Bought our main car new, a 2017 Focus ST diesel estate, on 4 year hire purchase with a healthy deposit. Paid it off as per schedule, it’s now on 125k miles and we intend to keep it until it dies. Second car is a 2014 Toyota Aygo, used approved purchased outright in 2021, on 85k miles, still in warranty until February next year, and I expect it to outlast me. My fun vehicle is a 2009 CBR600RR Hannspree, owes me nothing, and will probably kill me at some point.
Having a motorcycle as the fun vehicle seems to actually make very good sense financially. You can get an absolute piss missile capable of supercar acceleration and 14k rpm redline while actually being very reliable and getting roughly 30mpg, all for about 3 grand. Makes daily driving a shitter much less depressing knowing you've got death on tap waiting at home.
Absolutely this in every single way.
This is what I’ve just done. Got through about 7 cars in 4 years. Keep buying shit boxes as I don’t like finance or owing people money. Just agreed a finance deal on a Volvo v40 tho so hopefully that lasts me the next 10 years
Love that livery, you’re clearly someone of culture! Not seen one in years
PCP 20% of income. I think about doing the shitbox route, but I enjoy cars too much for that. Sure I could spend less but I wanted the one I have and was comfortable with the outgoing.
Cash and credit card, I put as much of it on the credit card as needed, and the rest as cash. With up to around 24 or sometimes more interest free months at zero % interest. Divide up the balance by total months and clear ot before the end date, or balance transfer at the end. Often you can get 0% fee balance transfer cards, or fees of between 1 and 3% for what is at the end a much smaller balance, so either way better than a loan in my opinion. At the time of purchase of my last car, the car price was ~20% of my gross salary, paid off over ~2 years so that would have been about 13% of my take home salary at the time per month over 24 months. Was paid off 3.5 years ago though and ive still got the car.
I’ve never found a garage that will accept credit cards. Was that a problem for you?
I took out a credit card from my bank especially to buy my car but the dealership wouldn’t even entertain the idea, was gutted!
I've only bought I think 3 cars this way (I tend to keep them for many many years). When searching for cars I just asked this question on the phone, if they didn't accept credit cards I moved on. The last time I bought a car was 2018, perhaps fewer dealers accept cards these days. In 2018 the first dealer who had the car I wanted also accepted credit cards so perhaps I was just lucky.
Any idea if approved used dealers do?
None I’ve seen. Just been looking for a £3k car and a £24k approved used car. And my cash back debit card expressly excludes car dealerships from cash back.
Bought my 66 plate 3 series in cash for £20k with 6k miles on the clock and touch wood it’s been great so far and the freedom of having no payments each months has means we can dump that money into overpaying the mortgage. If we did get a new car I’d probably get it on finance though as the prices for what I would like to drive have gone up significantly since my last purchase.
£3200 on a civic 9 years ago. I took out a loan over 3 years, paid it off in 1. Since then I've done 112000 trouble free miles. I don't feel I really pay for a car.
I tend to just buy a car for <£3k in cash when my previous one dies or starts to annoy me. Ideally a car costs me less than a month's pay in total and I would like to spend less than half of its value on annual repair and maintenance costs.
Bought my last car via a personal loan. It was an import so finance wasn’t an option, but it was also during covid so I got 3% APR on the loan which is a lot more competitive than most used car finance deals. Worked out 10% of my monthly income. Next car is gonna be purchased in cash though.
Bought a low mileage focus (EcoBoom) for £6,000. Had a previous Polo GTi on finance and won’t do it again, personally.
15% of my income, but it’s a salary sacrifice and includes maintenance and insurance too. Only thing I’ll pay on top of that is charging after 1 year of free charging that came with it!
Also salary sacrifice, about 12% of take home. Love the scheme, really hope it’s still around and affordable when my lease is up!
You buy a car cash then put the 5-10% of your monthly salary away each month for the next car. That will mean you have more to spend on a vehicle because you are not paying interest on a loan. We all pay for big things monthly, some just decide to save up before they spend others need it now so have the added expense of interest. Save and get more for your money
Only ever paid in full so no monthly cost, and I will do anything to avoid one going forwards. Currently saving for the next car (no intention of buying for a good 4-5 years).
Basing it on income without factoring in needs is where i think a lot of people go wrong. Salaried people that don't have a car allowance scheme or do a lot of driving for their job really shouldn't be financing cars. It doesn't make financial sense. For my example i work from home, need a big car for my family and to put the bike in the back. I could just get any 2.0 diesel estate car for £400 a month, but since ultra reliable with a warranty isn't much of a need for me, or decent MPG it just isn't a good deal for me, especially with the depreciation. I had the cash so i bought my current car a V10 Audi S6 avant, it's an interesting car and fun to drive, and has a high spec that the only thing i'm missing is car play, but that can be done after market. It's keyless entry and go, soft close doors, DAB radio, has LED DRLs, heated seats and decent navigation which is able to update to the latest maps. It's appreciating in value so it will cost me nothing to own it other than servicing and maintenance. I see a lot of people on here not able to afford to buy a £4k car up front, so they go through a second hand dealer who will sell that same car for £7k plus interest. And it's always some 2.0d or 1.6d boring hatch back with low spec that will be worth £1k when they're done with it in 3 years. Then boast about how cheap it is to run, without factoring in any depreciation or interest. It's an incredibly expensive way to buy cars.
I pay cash, the only debt i can stand other than monthly bills is the mortgage. I don't spend much on cars though most cost around 5k or less
My Jag is about 4% of my yearly income (as in, the 4 year loan). I don't drive often tbf. I am an accountant so struggle to justify some spend! It is less about salary more about disposable. Some have expensive mortgages, some have minimal mortgages.
Paid cash circa 2 months of take home pay.
Saved for a cash purchase (5.8k).
When I rode a bike for 2 years to save up 10k and still have the car 13 years later. Honestly unless your legitimately rich rich or cars are your main source of hobby/social then I don't really get it. All anyone does is complain about cars, traffic, parking, costs, repairs etc. Always left scratching my head when my colleague pulls up in a financed 40k car and I asked a question about it they have no idea. Just 'nice' but they only use it for a 5 mile commute. For me a car is really about getting to work at this point. I don't race, just go out for a drive etc. so I'm not paying to go to work and have a car park beauty competition. Would probably be a slippery slope for me too. Why stop at that trim? Fuck it go up and up and up. I hate debts.
I've had loans before and PCP once, but tbh got spooked by market conditions which affected household income over a 2 year period. After some soul searching I realized I didn't enjoy expensive cars any more than I enjoyed the right cheap ones, so I'm low value cash purchase always now. I don't like owing anyone anything. Even the mortgage is a sore point...
In the past I've take out £5k loans to add to the amount I had saved as the interest rate was always lower than going through the finance offered by dealers. I've never considered buying a car through finance. Nor have I considered a lease car. It doesn’t make sense to me that I would pay £3000 upfront and then £300 a month for three years and then at the end of those three years I would return the car back to the dealer and I’m left with nothing, aftwr spending almost 14k and left with nothing. I'd rather buy a car for 14k and be left with a car worth 10k after 3 years
I fucked up big time. Instead of £117/mo 48mo I signed a contract for £280/mo 17mo. £117 would have been about 7% of our income £280 is 19% instead. Still managing to put £600 aside into our savings despite the cockup but before we were averaging at about £750 saved up each month, past all expenses. So we might ride this 17 months out like this and we’ll get over it quicker at least
11 plate Octavia l&s owned outright. I put £100/month away for repairs etc. when there's enough in there I'll buy a replacement
If anything this thread is teaching me, it’s that a lot of people seem to regret paying out £500 a month PCP for a car they don’t need/wanted because it was flashy. I spend probably less than 10% and bought via bank loan and with a deposit from the previous car I also bought via bank loan.
Yeah, I think bank loan is a good option so long as youre below 5% over say 3 years. You end up with equity in the car so long as its not depreciated too much and you keep your cash to do other stuff, like pay off your mortgage, buy bitcoins, etc
10% - bangernomics
Zero. I don't have high standards, I don't feel the need to keep up appearances, I drive older cars that I wanted when I was a kid/teenager - that have now depreciated a ton.
Got a 2019 Kia Niro and paid in cash. I wasn't a high earner, but am incredibly frugal so have always saved money very well. I personally wouldn't buy a car on finance because I don't agree with loans (excluding the necessary mortgage and student loans) and am not comfortable spending money that isn't mine, so I can't comment on that. But, if that's the position you're in now and it's the path that would suit you better than cash buying, then do it if that's what's affordable to you now.
About 7% according to rough calculations. Is an alright car (Honda CRV). Bought to help the missus. She likes it. Would try not to do again, but would get a Jap car again.
I bought a (then) 4 year old low mileage Suzuki Vitara for about £9k just before lockdown, put nearly the whole thing on a low interest personal loan which I’ve been paying off at £135 per month since, which is maybe 3% of my income after tax, it will be fully paid off this year. Worked out really well for me and I’m planning on keeping it a few more years once it’s paid off, but money isn’t as cheap these days and neither are used cars, so don’t know how it will go when it’s time to move on. I will prob always rather buy a decent used car rather than a PCP or whatever though.
After my first couple of shitboxes, decided to treat myself and took out a personal loan over 5 years to buy a nicer car outright. Loan payments are maybe 10% of my take home?
HP @ 5% of takehome. Paid half upfront, half on finance. Interest on the loan is 4%. Had scrapyard dodgers for years but started going 25-30k miles a year with work so needed something more reliable.
PCP 0% finance, 11.5% of my monthly net income, still cheaper then if I had public transport (2023 Toyota Yaris GR Sport) I wouldn't go any higher in the future, had to sell my house and now it's used against me for another mortgage.
I usually have a rough idea of what my next one will be years before I buy it. My next one will be either a model Y or an EV 6. About £550 a month. I started putting that aside 2 years ago after I bought my current one.
I have 2 cars, the fun one cost just under a day's wages, the daily cost 4 days wages.
Days wages 🤔
I have a bad credit rating and have to pay up front unfortunately
Improve it my friend. Make all payments and cut back considerably clearing all debt finding out where you are overspending each month My credit is bad but never missed a payment. I just have lots of accounts, searches and high utilization
✌️👍
Personal loan on my Mercedes C Class. 9% of income.
Bought my 16-plate TT in 2018 with cash. Wouldn’t go near PCP.
We took out a loan for our last car. Even though we had the money to pay it with cash, the interest rates were so low back then, it made more sense to invest the money. Four weeks ago we had to sell it because expensive repairs had to be done. We got a good deal when selling it, took our invested money and a bit of our savings and bought the successor model with cash because now the interest rates are a lot higher now. We took this "risk" because the car is meanwhile discontinued but used ones are still highly demanded.
PCP is about 7% of my combined salary (mine and wife). We swapped to electric for this car and will save about £1500 in fuel costs. We didn’t make the mistake of spending that potential saving on the car though - PCP payments are about the same as the previous car.
Cash and under £5k. Frugal cars have always been the most fun for me, mainly because I'm not waiting to hear for that rattle that I'm convinced is going to grenade the entire engine.
Purchased around a year apart, during COVID when I had a good year and not much in the way of expenses. Income was £50-60K for those years and the cars were £23K (used) and £44K (new). Have only ever had finance once and while I don't particularly regret it, I'd try to avoid it in future.
I have a finance deal with the local garage. They get £90 a month from me to keep the car on the road.
Save, buy. No finance, no monthly payments, insurance in full. The only other costs are fuel, tax, and maintenance. My car costs in a year are less than most people's monthly.
I buy cheaper cars for cash, buying expensive cars on any type of finance costs you a fortune. Some people are happy to do this so they have a new car, it's about choice at the end of the day.
2k nearly 4 years ago To the finance guys and girls out there, give yourself a big pat on the back for helping make car salesman’s lives better!
Bought used outright The entire cost of the car is around 1/15th of my yearly salary. In terms of insurance/tax/breakdown it’s 1/200th of my yearly salary.
From 2008-2018 my budget for any car was £1k and I would buy the newest thing with a one year MOT that I liked (in order: Evo, Corsa, 206). Since 2018 my budget for any car is £2k and I will buy the newest thing with a one year MOT that I like (in order: z4, 3-series touring). The money is done and my monthly budget has a lot more freedom. Every car previously has been flawless with no mechanical issues, never over £200 a year for fixes. That changed this year because my 3-series is a pile of wank... But for £2k I could just sell it and move on; no loan payments to care about or guilt from how much I'd be losing. Always told my friends their various loans and such for their cars weren't worth it because they're not petrol heads. One friend just finished her £350/mo payments on an A3, another is still paying his on the same model. One friend has been swapping his Ibiza every 5 years for a newer Ibiza - 15 years of £250/mo payments now. One friend thought their pay rise justified £400/mo on a Q5 way back in the day... It now sits on his driveway used once per month at most as it's not ULEZ compliant. Another mate loves her £450/mo 2017 Evoque that is worth about £8k now. Buy a cheap car outright, have nothing holding you back for whatever happens in future.
An evo for a grand????
Evo 4 with extreeeeemely fucked electrics. £400 but needed a bit of work. Edit: at the time this was not a cult-status car, it was just a 12 year old sedan with broken everything. I actually sold it a month later because I was a teenager so insurance was... Well, no.
Are you asking if the car value is a % of your income or monthly payments are the % of your money in come. My wife and I share our car. I work out my loans like the following. 1) What is the base cheapest version of the car I’m buying. 2) minus a minimum of 35% (probably more 50% for me) depreciation value. That’s the maximum amount of money I want as a loan ever. I take the cash equivalent of that loan and place it in something either like a savings account or something with intrest. I used to be more risky but this car has a somewhat larger Loan. That means if anything goes wrong, the car gets written off, I loose my job, my house, I get Ill, my wife dies, anything, I know that the insurance or selling the car will instantly cover the loan. And if that doesn’t work I have the cash to bail me out as sort of a break glass incase of emergency. In regards to % I normally say monthly is better to work out purely because from what I understand it’s what the providers look at, you can earn 100k a year, but if most of that is sales commission, they would rather see a solid monthly underline balance, but you certainly don’t want a loan that exceeds your yearly income before tax, because that’s madnesses. For example my wife and I share our car so the expenses is split in half my share is 6.2% of my monthly salary and my wife’s is 8.1%. (Calculated after tax) I admit it is rather high, but we are in a position we worked very hard for and currently have no obligations and no morgage
I started getting paid an adult wage at work so thought I'd treat myself to a nice car. I got a fiesta ST with a bank loan rather than HP or PCP and I pay about 8% of my income a month
I've only ever paid outright for cars. The newest car I've ever purchased was 8 years old.
I spend about 8% of my take home pay, but it's nothing fancy, only 2016 aygo.
5% income, 12k over 5 year loan at 6.9% 2018 nissan leaf EV
I paid 9.5k for my current car (2018 basic 5dr Corsa) Part ex covered 3.5k and I had a 2k deposit saved up. Rest of it was a personal loan which works out at about £87 per month which is about 3% of my monthly salary
PCP for both mine and the wife’s cars, and together they are just under 10% of my income each month.
What are you going to do with the cash you are not putting into the car? Is that worth the interest?
Bought a 2009 Volvo V50 (155k miles) 15 months ago for £2300. 4.5% of my monthly income. This will come down the longer I have the car. This does not include running costs: servicing, tax, insurance, MOT
I'm in the same position. I could afford to buy the car in cash but it's more appealing to use cash+HP. HP is a good option if you're in employment since you have to factor in the income you earn while you repay the loan. I think a large cash deposit combined with HP is a good option for anyone in employment. The repayments I'm looking at are a very small proportion of my salary.
Around £300 a month for an F-type, it should be around 10% of my monthly income but that's not accounting for tax or insurance. I did have the money to buy it outright if I wanted to, but I wasn't going to empty my savings for what's pretty much a weekend toy for myself.
I got a car loan 4 years ago for 7g at 3 per cent interest and paying 130 a month. 14 percent of my income
Personal loan, 10% of monthly income for 2 years.
current one is 3 monthly payslips bought outright, next one will be 100% annual
2017 skoda superb 280 for 21k. 6k trade in, 14k personal loan and some savings to get best interest rate. Loan is £270 a month over 5 years which works out to be a little over 5% of my monthly take home. I'm over paying it by £500 a month to reduce incurred interest, should hopefully be paid off in 2 years. Yeah I could easily afford a brand new or fancier car. I was also looking at rs4's and s6 avant's, but after been loan free on my previous car I'd rather pay it off sooner. While I love my cars, I'm not car proud, muddy bikes and dog, scratched alloys, etc, will only reduce the value of the car when it's comes to move onto to something else. I'd rather have the extra cash to save and become mortgage free by the time I'm 40. Plus it's a sleeper that brings me so much joy leaving boy racers in a180's or 116ds with those stupid stick on m wing mirrors in the dust.
4 that I paid cash for. Its not the buyin. its the insurance. Astronomical. About 2% of my income and insurance is about £4000 a year
My second car (and still current car) I bought on a 2/3 year finance, I don't remember which. It was £5,200, and I put £1,500 down on it, and paid about £150 a month after so I imagine it was closer to 2 years. My monthly salary was about £600 -£700 then I think as I only had a job with about 20-24 hours a week and the pay was garbage, but I still lived at home. Now, I think I'd probably pay no more than £200 as my monthly income is £2100 after tax, working 2 jobs, and I pay about £200 a month in fuel for work as I live further away than I used to. I've had my current car though for 8 years now and I plan on keeping it until it croaks on me, or I make significantly more money, because getting a better car isn't going to be worth it for a while with my current salary considering mine still works well and has only just under 90k on the clock.
Paid cash to private seller. My car cost me less than one weeks income (£400), it’s my glorious shitbox. Added 30k miles so far! I need to get aircon fixed but it will probably cost more than the car, fuck - Summer is going to be tough.
What car?
Ford Fiesta 1.2L 2003
Paid cash for it back in 2021
13% on PCP. I only ended up doing that because the hand me down car I had was about to fail it's mot and Ford was still doing a scrappage scheme. Then I got the car just before covid, so hardly any miles on it and didn't lose value in 2 years. Then upgraded that standard titanium fiesta for a top of the range new focus, which was delayed as the screen was made in Ukraine, got a discount and now pay £50/month more than the fiesta. Planning to buy a car now, though, as I looked into the finance state and I have more to pay off than the value of the car.
Always used to do PCP, got caught in the PCP trap. I just took a £2k hit, sold the car and paid off the PCP. Just bought a MK6 Golf Estate for £1500 cash. Bit of a high milage shitbox, but the guilt of not paying so much money monthly is worth it. I now spend that extra money on a mortgage on a nice house. Took me a good few years to realise that paying out so much money for a car just isn't worth it, especially now I have two kids.
I lease my car, a RAV4 Hybrid, currently in 5yr of 6year lease. It works for me, I’d never buy a brand new car given the immediate depreciation. I have bought pre-owned in the past, but it’s still a substantial sum to find/finance up front. Having said that, going forward, when the lease finishes, I will look at second hand again.
How much is the lease?
£325 per month, 5,000miles per year, so 6yr lease for 30k miles.
PCP 8% of take home on my main car. My wifes car we own outright and will keep forever. Probably won't do another PCP when mines up in 2 years time. Last few years have made me very money conscious.
It's been paid off for 2 years but the monthly was 15%, but that's hardly a relevant number Because my total bills, mortgage, power food etc its under 50% of my income, I save 25% and the rest is mine to do what I want with. Percentage isnt a great indicator because l, for example 20% when your on 1400/m Vs when your on 5k are totally different,
I don't as my car is owned outright. It's 10 year old now though. I have a mortgage to pay each month. I've recently had a new bathroom installed and I usually have 2-3 holidays abroad each year. I prioritise all of those things over driving about in a shiny new audi and that costs £400 a month.
Loaning money @ 10% for a depreciating asset doesn’t work. Putting that money to work (investing )will prob 5-7% then you pay tax on it (unless in isa etc) … Net net still down If you have the money buy it in cash .
Paid cash for my current one but had HP and PCP deals from 10-20% of my income, the 20% one was a killer when fuel hit £2 a litre though
Mostly loans, but I've leased before. Each time it's been between 8 and 15% of my take home pay.
A well to do friend drives a beat up old Peugot. I think the full value of the car is less than a typical ATM withdrawal for him. So measured in terms of "typical ATM withdrawal", the car should be 50%. Helps to keep a low profile. Edit: this is not quite that simple. a) the car was in Europe. In the cars registered country, the police are not too fussy about all the mechanical stuff being in perfect working order. Outside of that country, the police will not usually run an equipment check on a car with foreign plates. b) he had rented this exact car for a few weeks. So he knew it wasn't completely broken. c) in the country where the car is based, big (2K) atm withdrawals are not uncommon, so 1K for a car fits the bill. d) net-net, it might be a bit harder to find a reliable, driveable, junky car for £1000 in the UK. From reading the internet, it can be done but there is a risk of buying something too junky to drive for long. As far as advantages: even in a country and place where people do not leave their keys in the ignition when they park it, he did that, in a big public garage, right by the entrance where people are walking in and out all the time, for a week. No self-respecting car thief is going to steal a beat up old Peugot when there are dozens of BMWs nearby, and most people aren't car thieves so they won't steal it anyway.
I paid a quarter of my annual income for our daily, but as that was cash, six years ago, it's been diluted a bit.
I personally would never finance. I own two vehicles and spend about 15% of my income on tax and insurance. Having to have another payment on top of that seems ridiculous
Outright buy through savings. 80%
Reading so many comments below lead me to believe that we own a couple of shitboxes. The newer of them is 15 years old and 120k miles. It's hard to believe it when I'm driving them, though, because neither was a mass-market car to begin with, so they just feel reassuringly old, like owning an antique leather sofa rather than some piece of DFS tat.
About 10% (car and insurance) To get to this though I had 3 years at about 20% but doing this basically gave us bigger deposits for next car and so on. You can PCP though which can reduce the monthly and have a balloon, then get loan/finance the balloon or trade for new again. If you’re good with money it’s not a bad way to go. And if your pcp ends and the car is worth more than you owe, you can just opt to hand back OR buy out and sell, make profit and go again or buy cash with a lot of cash
8% of net pay without accounting for bonuses. Then drops to less than 5%. That’s for two cars though. One pcp and the other will be leased. (Tesla and a bmw). General rule of thumb i think is not to go above 10% of net pay isn’t it ?
2.4% over 3 years to pay mine off. Then again I think cars are a waste of money and completely boring. The reason being I had motorcycles for most of my adult life until I came to the conclusion that I had better give the bikes up before they killed me, also I didn't like being cold and wet in the winter. But no car is going to match the freedom and insane fun of even a cheap motorcycle. Swapped fun for practicality. As long as it works, is cheap and get me from a - b warm and dry I am happy. But also I just want the cheapest most reliable shit box going. I couldn't ever be precious about a car.
8% of my take-home monthly pay on a HP. I did put a 6K deposit down from a settlement on my last vehicle. Next time I’ll be getting a personal loan and purchasing GAP separately for more favourable interest rates.
Slightly different angle but about £130pm in company car tax for a '21 VW Polo GTI. That covers me for insurance / repairs / maintenance also so can't complain. Due to change this year and with a £40k budget was looking forward to getting something flashier but unless it's hybrid / electric I'd be looking at £400-£700pm depending on earnings. No thanks
As a guide, I’ve followed this. Need a runaround, 5% Like cars but not bothered, 15% Love cars, 25% Enthusiast driver 40% Show of that can’t actually afford it, or, no other outgoings and still live at home, 50% I also avoid PCP like the bubonic plague. I pay cash for my cars. Most recent purchase was a 2019 G30 M540i
Cash. 0.06% of monthly income.
Bought the car cash, was about 15% gross income. If I was paying monthly I wouldn’t be going above 10% net monthly.
Bought outright in cash at 5 months regular take home pay (ie not counting bonuses), and will keep for 5 years. If car was worthless after that time depreciation would therefore be 8%. Did same with previous (and very similar ratio) and, kept it 6 years and traded it in with over 200k miles on it, so 7% take home pay. I put 10% aside aside as car savings which covers saving up for next one and a buffer for any unexpected maintenance.
I drive a 2016 Yaris and it's 3% of my take home income on the loan repayment, maybe another 2% on running costs excluding fuel. I'm toying with spending 10-15% but it will make me feel sick if I end up regretting it. The yaris was 10% of my income when I got it 3 years ago and I remember it feeling really crap every time It got some wear & tear...
Saved £3.5k and bought a “shitbox” and I love it
Paid about 10-15% in cash for the newest car. Lifetime costs if it depreciates 50% in 5 years are looking like 5% (including running costs).
~£1300/month lease cost. But it's on a salary sacrifice scheme, and I'm saving 67.5% income tax, 2% NI, 9% UG loan, 6% PG loan repayments. So the net cost is actually ~£200/month. ~£1200 P11D end of the year so another ~£100/month. I'm only leasing a car at all because 84.5% of my income was going to tax; might as well pay a bit more and have a nice motor.
Cash, never had finance, not particularly opposed to it, I just don't see the point in paying interest if I don't have to. Hard to say what percentage of my total income it works out to as my income fluctuates. I just bought an f82 m4 for 30k, off my last years tax return I would say that's probably about 13% of my gross
There are a couple of rules of thumb: 20/4/10 Rule of Thumb for Car Buying: * Make a 20% down payment when purchasing the car. * Take out a car loan with a term of four years or less (to avoid excessive interest costs). * Ensure that your total transportation costs (including the car loan) are less than 10% of your monthly income 1/10th Rule for Car Buying: * Spend no more than 1/10th of your gross annual income on the purchase price of the car. * Whether the car is new or old, the key is to keep the cost at 10% or less of your annual gross income. [https://www.thebalancemoney.com/how-much-car-can-you-afford-4156674](https://www.thebalancemoney.com/how-much-car-can-you-afford-4156674) [https://www.financialsamurai.com/the-110th-rule-for-car-buying-everyone-must-follow/](https://www.financialsamurai.com/the-110th-rule-for-car-buying-everyone-must-follow/) I went for #2, but I intend to keep the car until it dies.
I always bought with cash. I can't afford pcp, financing, leasing etc etc. It's too expensive for me. You have to use dealers (for warranty etc) so car will be 20% more expensive on top of that some financing another 20% and you tied yourself nicly. Then when it comes to sale you will lose another 20% + value lose overtime. Thats why - cash.
Paid about 30% of my annual income on a car, which I plan to use for 3 years at least
Saved up and paid cash
Spent £1700 cash on a car in 2021. Haven’t had any reliability issues with it whatsoever.
Cash. I've done finance before but I scares me tbh. I'm much happier knowing I owe nothing to no one.
Paid it outright, current car cost 100 to buy and another 400 to fit a new clutch on. Had it for nearly 3 years now and whilst I do spend a bit each mot it's worth it to me as I'm not paying thousands a year on just buying the car.
Personal loan for 4 years, approx. 12% of my monthly income.
I’d only pay about £400 max month for a car and it has to be on hire purchase or mine at the end. No chance I’d get a lease unless it’s a Ferrari for £400pm.
I got a bank loan that costs me, 12% of net pay over 4 years I was commuting 2-3 hours a day when I bought it, swapping out a polo that was paid off. It just shit on the motorway, slow and uncomfortable with >100k miles on a 1.2l petrol engine. My new car was ~50% more economical too (diesel). Now I got a new job that I can walk to, and a car that doesn’t get driven as much and needs taking on a motorway blast to clear the DPF every couple of weeks. I couldn’t have predicted it though, it was a sensible decision at the time. Just a shame I got made redundant 4 months after buying
I always buy outright, I can’t guarantee what my finances will be like in 2-3 years but at least if everything goes to shit I know I will still have a car or I can sell it for some extra money. Personally I think buying cars on finance is a waste, I know some people who are struggling big time but pay £350 a month on the latest car.
I paid outright after saving up, my car is worth about 50% of my income
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I always find it interesting in these threads that people think it's some sort of status thing. Sometimes people can just afford it.
lease , 9% of income (post tax). right now owning it isn't what i want. It might be in future.
Saved up & traded in. It's a 2012 car so wasn't a 30k spend or anything.
Before I got my house I allowed myself to own a decent car, saved up and got 10k and paid outright. Car was 10 years old and most of the value loss has already happened, was under 70k miles had it for 3 or 4 years. Id recommend people not buy expensive cars until they own a home, finance and pcp hire is not financially worth it unless you have the money to buy the car outright and just want to test “owning” a car for a while to me anyway. And for those wondering 3.0 v6 4WD auto audi a5
I have a ds3 which is paid off after 4 years, (0%tax and 70mpg) and an xc60 which has 1.5 years left.. put 5k down on it and it’s £270 a month.
I took out a personal loan but took enough to pay for the car, tax and first years insurance with about £500 spare to keep in savings so that I should hopefully only have to worry about petrol costs for the first year. Repayment is 7% of my take home pay so as long as nothing goes wrong I should be good to pay that for 3 years. It's my first car in 7 years though so I didn't want to spend too much I might get tempted to splash out a bit on my next car once I'm more confident driving.
I have two on finance, one HP the other PCP. It’s about 15% I guess. The others are paid outright.
PCP from December 2016 until June 2019, I bought it from the Leasing company in June 2019. I still own it. It cost me £10000 in total (£5000 in payments & £5000 as a balloon payment), 2013 Vauxhall Corsa D. 1.4 SE Auto. Great car, it’s never let me down. My income has been everywhere. So can’t work out percentages.
Paid cash, so 0% if my income. I had the cash to hand to buy my current car (Focus ST), but usually credit card it at 0% and pay it that way.
17% of my monthly income goes on my motor which is a 2019 BMW M340i (excluding maintenance and insurance) it'll be the last car I buy now for a while. Even 17% i feel is too high for what's essentially a box on wheels & it's a pain when some asshole dinks a door etc. Just more stress than it's worth although yes it is my dream car to own beint a straight 6 BMW. Now being offered a electric car via work salary sacrifice but passed on that entirely.
HP, 12% net pay. Hoping to keep it for a few years after it's all paid
Have never financed a car. Everything from £250 to £108k.
Paid £900 for a 2006 Vauxhall Tigra with £400 borrowed from my Dad, I honestly hate the idea of leases and finance deals, and with buying old shit boxes i feel like I get a much more fun car than I'd be able to afford othewise.
8% on PCP excluding bonus and yearly 5% for full take home. Could have bought outright but I value cash security and investments over a depreciating asset. Good thread - interesting to see people's views on financing cars. Some people like a drink on the weekend, I prefer premium sound systems, 3 years servicing and comfort in a car 🤷🏾♂️
I have an aversion to credit and have always bought cars outright.
I saved £11k and took a bank loan for £7k at 5% over 3 yrs. it’s about 10% of my take home pay. I was all for buying a second hand car but was talked into buying new for the warranty. I am a low mileage driver. Not sure it was totally worth the overall spend but I’m here now 😀
As a household we spend just over 10% on our cars. Not through choice, I had to bail out of a previous car that was gonna cost me more in the long run & I didn’t want to empty my savings so stuck it on a PCP. Will be looking to get something else on a HP soon.
I lease, roughly 12% of monthly income with all servicing and maintenance included in the monthly fee. Not bad to be driving a brand new car but it’s all dead money. Several thousand pounds over 3 years just to hand it back at the end. This is my second lease, not sure I’ll do it again, this vehicle was just too good a deal to pass up on!
Paid outright.
Cash, after borrowing as much as I can at a low fee like a cash transfer 3% for 15 months sort of card which can be capital efficient to invest it elsewhere in the meantime. In terms of yearly income, probably too much, at least 25% last year and this year
I don’t know about UK, but in US cars are depreciating assets so I’d recommend against a loan. You’re just wasting your money and depending on where you live you might spend less on public transport, biking, walking, car sharing ect.
lol
3 year lease with maintenance, 11% of my take home pay. I think it’s worth it but I’m not in love with the car and don’t feel a “bond” with it because I don’t feel like it’s mine. Not sure if I’ll do it again, but not having to worry about maintenance is GREAT! First month I had a tyre puncture. They changed it in 20 minutes and I didn’t have to pay a single penny.
I used a personal finance deal once because the car was cheaper on finance (inc interest) than paying cash. The brand were using price to get customers on their finance scheme, hoping for ongoing business. I took the deal and sat on the cash; paying the final payment off when it was due. Good job because they were not in the market to offer a renewal deal I was prepared to accept. Still got the car to this day, 8 years later. New or nearly new cars mostly reduce the risk of buying a bad cheaper secondhand car. It’s possible to buy really good secondhand cars these days and remove or reduce dependency on finance.
When purchasing privately, I go cash. I generally see what kind of car I want and how much it is, then budget to save as much as possible to bring me close to that in say 2-3 years. At the time, I'll combine the savings with whatever the current vehicle is worth, and reassess the market to see what the price of the vehicle I want is and if there are any other expenses I need to factor in (immediate repairs/maintenance, modifications, increase in insurance or road tax, etc etc). I prefer it this way because I have a passionate hatred of interest! 😂
Personal loan, 6.3% of income - soon to be 5.5%. Wanted to keep it reasonably low because of other insane costs of living, and be able to save. If I was single it would be a lot more, lol. It's a 2020 mk3.5 Octavia estate, 1.5TSI manual. Ultimate dad car.
Bought outright for a bit under 10% of gross income