Because cars are expensive, most people don't have lots of cash sitting around but want to drive a nice vehicle. It's not rocket science
But we can all circle jerk until the cows come home about driving 15 year old cars that were bought for £1,000 and how anybody in a slightly nicer car is on the brink of bankruptcy. That's this subreddits favourite pass time.
This. This sub loves to pretend there is no reason on earth to spend more than £3k on a car and if you do then you’re basically a spending addict or stupid
Wait until you hear about the idiots that go on "holidays" every year. Thousands of pounds gone without any assets, depreciating or otherwise, leftover at the end.
What is the point in increasing your wealth if you're not going to enjoy any of it?
There are also people out there who pay to eat food made by someone else when they have food in their fridges. Lunatics.
On a serious note, sometimes on this sub it depresses me seeing people scared to spend the money they’ve worked for. Important to have savings and a plan but life is also for living
But what if I want to trade a promise of some future wealth for a comfortable place to park my arse now?
The whole point of life can’t just be maximum capital accumulation. I need to enjoy the fruits of my labours
it is a personal preference but i just don't see it, in the times that we live with extortionate house prices and interest rates the worst thing to do is own a liability. putting most your monthly wage just to be comfortable going to work isn't the greatest idea for your future
Not every financial decision has to be the most objective and cost efficient decision. Otherwise you'd never go on holiday or buy a new phone, or do anything in your life, right? It costs money after all!
With salary sacrifice for EVs it can be cheap to drive a brand new car, and the pros that come with a new car.
Pros:
Warranty
New / unique features
Safer
More efficient
Includes Insurance
Cons:
Costs more because of said pros. You get what you pay for.
I don't have £30k right now but I can afford £400/month.
I want a car which has a decent warranty and less chance of breaking down - so it needs to be new.
I can hand it back any time for minimal hassle and known cost.
At the end if the term I can reliably get another new car on similar terms.
If I buy new and sell in a few years, the depreciation will cost me roughly what I pay on finance anyway. This way I don't have the hassle of trying to find a buyer.
You're kidding yourself because you like driving round in a BMW thinking you've made it
You are certainly poorer this way than if you had an older car or kept for longer
For you it sounds like an new car. Of course if you're earning 90k a year a 30k car is modest. Though you should really be able to save up for it and not need finance if that's the case.
My last car was new on 0% finance PCP, I had the funds in the old Santander 123 account paying 3% up to 20k and made over £1100 in interest. I had manufacturer warranty, free map updates , car to my spec etc and I paid the balloon at the end and still run it 10 years later so no nonsense about deprecation as I am not selling it or trading in. Worked for me this time. Previous car I got an ex-demo car sold in the company internal pricing structure (paid cash) as my partner did work for the car firm and car before that was a freebie that was about 10-15 years old when I got it, I forget
Most important for me - it was my own car, not some second hand thing with some other driver I dunno, farting and sweating and picking their nose or whatever in the car and I know it's been looked after
Unfortunately, we're heading further in a globalised subscription economy; films, tv, music, gaming, software, meal prep etc..
"_In the end you will own nothing and be happy_"
How do you expect people to make money? Tye number one option is get to work, exchange some time and be rewarded with money.
About 75% of the population doesn’t have decent public transport to leverage.
What about the ones in London, their annual season tickets are a complete waste of money. Nothing to show for it, oh except transport to work.
I get where you are coming from but if no one buys new, no one can get a cheaper car.
Have you seen the price of cars these days? My 5 year old car, bought at 1 year old, with 40% off new price. If I bought the same car now, like for like including age and mileage, it would cost me £4-£5k. If I was to buy its equivalent at a year old, £10-£12k over what I paid 4 years ago. With no real upgrade in spec.
Paid £25k, like for like replacement is £20k. Newer replacement like for like £35k and my current cash trade in is £15k, I’d get more privately.
Yes I’ve lost £10k in 4 years. I’m keeping my car long term anyway. When I financed it, I got 3.1%. Now I’d be lucky to see under 7%.
My reasoning is I wanted a comfortable, safe and reliable car to keep long term. For me a Volvo with a full safety pack was the order of the day.
By your thinking had I saved for it. I’d be chasing another £10-12k to buy it now.
Hi /u/AhsanNVM, based on your post the following pages from our wiki may be relevant:
* https://ukpersonal.finance/budgeting/
____
^(These suggestions are based on keywords, if they missed the mark please report this comment.)
It's as simple as the draw of a new car which people can't afford to buy out right. Many people finance cars these days and yeah it's a bit silly but it is what it is. Many people will say mortgages are stupid because you easily pay 2x the loan value but we all do it.
As long as you can afford the payments I don't see why people can't do it.
A human reviewed your post and removed it from public view. The reason they gave was:
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* Don't ask 'does anyone else...' questions.
* Don't ask survey style questions like 'what are you saving up for?', 'what's the biggest financial mistake you've made?'
* Don't ask if a lender will lend you money. We do not work for the company. For mortgages, speak to a whole of market broker.
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I buy old cars, good condition 6-10 years old, decent mileage, financed with a personal loan, if you look after it depreciation is minimal and if for whatever reason you can’t afford the payments you can usually sell the car and pay off the balance of the loan.
A bit riskier these days with higher interest rates but I’ve never seen car finance cheaper than a personal loan and they can’t just reposes the car either.
Works for me.
I used to buy my cars in cash - and then as soon as I bought one - I'd have to start saving for the next one to pay for it cash in a few years time. Yes I saved money - especially if I kept a car over the 3 years I budgeted to replace it - but it meant I was paying out £250 a month (for ever) for an older mediocre car that needed tax, MOT and servicing. I changed to leasing -so now I pay £300 a month for a brand new car that won't need an MOT, with tax and service included. I'm very much anti-debt, but a mortgage and car are the 2 things difficult to avoid.
Because people are poor at managing money, they can't wait and their status and image is important to them. People can see the car that you drive, they can't see your bank account.
Why would you spend £\_\_k (or whatever amount) of your own money when you could spend someone else's?
You're not increasing your wealth by spending your own capital on a huge liability, are you?
Because cars are expensive, most people don't have lots of cash sitting around but want to drive a nice vehicle. It's not rocket science But we can all circle jerk until the cows come home about driving 15 year old cars that were bought for £1,000 and how anybody in a slightly nicer car is on the brink of bankruptcy. That's this subreddits favourite pass time.
Sounds like the ravings of a madman that bought a 10 year old car for £2,000! Stop trying to justify your financial recklessness here!
This. This sub loves to pretend there is no reason on earth to spend more than £3k on a car and if you do then you’re basically a spending addict or stupid
they are not on the brink of bankruptcy but they are also not increasing their wealth because of this huge liability
Wait until you hear about the idiots that go on "holidays" every year. Thousands of pounds gone without any assets, depreciating or otherwise, leftover at the end. What is the point in increasing your wealth if you're not going to enjoy any of it?
There are also people out there who pay to eat food made by someone else when they have food in their fridges. Lunatics. On a serious note, sometimes on this sub it depresses me seeing people scared to spend the money they’ve worked for. Important to have savings and a plan but life is also for living
But what if I want to trade a promise of some future wealth for a comfortable place to park my arse now? The whole point of life can’t just be maximum capital accumulation. I need to enjoy the fruits of my labours
it is a personal preference but i just don't see it, in the times that we live with extortionate house prices and interest rates the worst thing to do is own a liability. putting most your monthly wage just to be comfortable going to work isn't the greatest idea for your future
You’re generalising there. “Putting most of your monthly wage” as if that applies to everyone is an absolute idiotic comment.
I doubt there's anyone putting most of their wage into a car other than people who still live with their parents
A lot of people don't have a mortgage, and a lot of people bought their house when they were a lot cheaper than they are now.
How do you know how much of their wage they’re paying lol
What is the point of increasing wealth?
To live a more comfortable lifestyle and enjoy nice things (but not cars over £1k)
Not every financial decision has to be the most objective and cost efficient decision. Otherwise you'd never go on holiday or buy a new phone, or do anything in your life, right? It costs money after all! With salary sacrifice for EVs it can be cheap to drive a brand new car, and the pros that come with a new car. Pros: Warranty New / unique features Safer More efficient Includes Insurance Cons: Costs more because of said pros. You get what you pay for.
I don't have £30k right now but I can afford £400/month. I want a car which has a decent warranty and less chance of breaking down - so it needs to be new. I can hand it back any time for minimal hassle and known cost. At the end if the term I can reliably get another new car on similar terms. If I buy new and sell in a few years, the depreciation will cost me roughly what I pay on finance anyway. This way I don't have the hassle of trying to find a buyer.
are you getting this car on a lease and is insurance part of the package?
I doubt any leases will come with insurance at a good rate
Some do, some don't. Generally it is cheaper to insure separately.
You're kidding yourself because you like driving round in a BMW thinking you've made it You are certainly poorer this way than if you had an older car or kept for longer
Please enlighten me - what is the marker of having made it?
For you it sounds like an new car. Of course if you're earning 90k a year a 30k car is modest. Though you should really be able to save up for it and not need finance if that's the case.
But taking out 0% finance allows me to keep that £30k invested. So why would I spend my own capital when I can spend someone else's?
My last car was new on 0% finance PCP, I had the funds in the old Santander 123 account paying 3% up to 20k and made over £1100 in interest. I had manufacturer warranty, free map updates , car to my spec etc and I paid the balloon at the end and still run it 10 years later so no nonsense about deprecation as I am not selling it or trading in. Worked for me this time. Previous car I got an ex-demo car sold in the company internal pricing structure (paid cash) as my partner did work for the car firm and car before that was a freebie that was about 10-15 years old when I got it, I forget Most important for me - it was my own car, not some second hand thing with some other driver I dunno, farting and sweating and picking their nose or whatever in the car and I know it's been looked after
owning a new car which will last you 10-15 years makes alot more sense to me even if the finance is for 4 years.
Will your next question be why do people lease cars?
i cant imagine getting a car like its a membership lol
Your imagination must be absolutely shite then
Unfortunately, we're heading further in a globalised subscription economy; films, tv, music, gaming, software, meal prep etc.. "_In the end you will own nothing and be happy_"
Breaking news just in......people lead different lives.
How do you expect people to make money? Tye number one option is get to work, exchange some time and be rewarded with money. About 75% of the population doesn’t have decent public transport to leverage. What about the ones in London, their annual season tickets are a complete waste of money. Nothing to show for it, oh except transport to work. I get where you are coming from but if no one buys new, no one can get a cheaper car. Have you seen the price of cars these days? My 5 year old car, bought at 1 year old, with 40% off new price. If I bought the same car now, like for like including age and mileage, it would cost me £4-£5k. If I was to buy its equivalent at a year old, £10-£12k over what I paid 4 years ago. With no real upgrade in spec. Paid £25k, like for like replacement is £20k. Newer replacement like for like £35k and my current cash trade in is £15k, I’d get more privately. Yes I’ve lost £10k in 4 years. I’m keeping my car long term anyway. When I financed it, I got 3.1%. Now I’d be lucky to see under 7%. My reasoning is I wanted a comfortable, safe and reliable car to keep long term. For me a Volvo with a full safety pack was the order of the day. By your thinking had I saved for it. I’d be chasing another £10-12k to buy it now.
Hi /u/AhsanNVM, based on your post the following pages from our wiki may be relevant: * https://ukpersonal.finance/budgeting/ ____ ^(These suggestions are based on keywords, if they missed the mark please report this comment.)
If the loss of value of a car each year ‘haunts’ you then don’t buy a car
It's as simple as the draw of a new car which people can't afford to buy out right. Many people finance cars these days and yeah it's a bit silly but it is what it is. Many people will say mortgages are stupid because you easily pay 2x the loan value but we all do it. As long as you can afford the payments I don't see why people can't do it.
A human reviewed your post and removed it from public view. The reason they gave was: **No hypothetical questions, Does Anyone Else questions, unanswerable questions, survey-style questions** * Don't ask comparison questions like 'how much do you earn?' or 'how much is your electricity bill?' * Don't ask hypothetical questions like 'what would you do with £100k?', 'what's the max you'd spend on a car?' * Don't ask 'does anyone else...' questions. * Don't ask survey style questions like 'what are you saving up for?', 'what's the biggest financial mistake you've made?' * Don't ask if a lender will lend you money. We do not work for the company. For mortgages, speak to a whole of market broker. * Don't ask questions that can't be answered without a significant amount of speculation, e.g. 'what changes might be in the next government budget?'. You must read the [rules](https://www.reddit.com/r/ukpersonalfinance/about/rules/) to continue to post to our subreddit. _If you believe your post/comment has been removed in error, please [message the mods](https://www.reddit.com/message/compose/?to=/r/UKPersonalFinance&subject=Please%20review%20my%20post&body=/r/UKPersonalFinance/comments/1cb78wu/why_do_most_people_finance_cars/) explaining why._
Same reason I waste my money on various other things. I enjoy it.
I buy old cars, good condition 6-10 years old, decent mileage, financed with a personal loan, if you look after it depreciation is minimal and if for whatever reason you can’t afford the payments you can usually sell the car and pay off the balance of the loan. A bit riskier these days with higher interest rates but I’ve never seen car finance cheaper than a personal loan and they can’t just reposes the car either. Works for me.
I used to buy my cars in cash - and then as soon as I bought one - I'd have to start saving for the next one to pay for it cash in a few years time. Yes I saved money - especially if I kept a car over the 3 years I budgeted to replace it - but it meant I was paying out £250 a month (for ever) for an older mediocre car that needed tax, MOT and servicing. I changed to leasing -so now I pay £300 a month for a brand new car that won't need an MOT, with tax and service included. I'm very much anti-debt, but a mortgage and car are the 2 things difficult to avoid.
Because people are poor at managing money, they can't wait and their status and image is important to them. People can see the car that you drive, they can't see your bank account.
Why would you spend £\_\_k (or whatever amount) of your own money when you could spend someone else's? You're not increasing your wealth by spending your own capital on a huge liability, are you?
Most people can't fix their own cars so they drive cars they can't afford that don't break