How are people affording cars?

[Rroff]

One thing I have noticed is the younger generation don't really do bangers. I know that's a generalisation, but when I was 18 it was common for people to have a 10 plus year old car bought outright, a few rich kids would have new cars. My first car was a H reg fiesta lol.

Now though it seems far more common to see younger people with fairly modern cars.

I think it points to a much deeper problem in society and not just rooted in the Instagram generation and having nice things, etc.

While again a gross generalisation but many of the things which would have motivated me to not spend too much money on a car at that age, as well as potential spending power vs car costs, just aren't achievable goals for an increasing number of young people while having a nice car is.

Another few years this is probably going to come home to roost.

 

[Bear]

It's all relative. I know people who will scoff at a £50k car and then spend £10k on a holiday, to me that isn't sensible. At least a car is an asset, albeit a typically depreciating one.

When you look back on your life at the end, most people look back at the experiences they've had in life, not the objects they've owned. The optimal situation is to be able to afford both

 

[jpaul]

that's the trope that the air holiday companies are currently using in their advertising - but objects enable experiences, plus, usually, the people your experience is shared with.
like a car enabling you to go on a road trip route napoleon say, bicycle on a nice tour, skis etc etc.
if you are a driving enthousiast the technical characteristics of the car $$$, obviously help too towards the experience - nice chassis ...

 

[Bear]

that's the trope that the air holiday companies are currently using in their advertising - but objects enable experiences, plus, usually, the people your experience is shared with.
like a car enabling you to go on a road trip route napoleon say, bicycle on a nice tour, skis etc etc.
if you are a driving enthousiast the technical characteristics of the car $$$, obviously help too towards the experience - nice chassis ...

Objects do enable experiences but the experiences are ultimately the memories not the object. Ive been on road trips across Europe in my cars and the wife loved it but she remembers the places we went to and not the car we went in and I say this as an owner of (by any normal measure) an expensive car

 

[Gibbo]

To echo some of the above post a enthusiast car which is an object do enable some truly amazing unforgettable experiences as they lead to going places, meeting like minded people and making new friends.

It is the car that allows those experiences to happen and the reason places were visited which have given great memories.

Not really an expense thing either, don’t get me wrong the Ferrari has made some truly fantastic memories as we’ve been invited to many places in it and as such made great memories but to flip that and go the opposite end my £18,000 43yr old Corvette is also making memories and we’re visiting places and also making new friends because of that too.

One of my best friends came about from my Saleen Mustang who I did not know until I purchased from him and since then we have become great friends and done lots of road trips together or just had a night in getting drunken.

But it is for sure cars which enable said experiences and open the door to meeting other people.

Every enthusiast car has a group of people who are up for going to places and meeting people etc.

 

[Dup]

I'm all for the memories and not the "things", I can fit my life into my car and I don't let me things define me. That said objects do enable experiences and memories. I feel the clock is ticking to own and enjoy a fun car again, and that's based on my memories of my EP3 and MX5. My aspirations are to own similar to tinker and to enjoy driving, not an expensive computer on wheels as such. I only feel that way becasue of my past experiences though, I'd love a car with character and battle scars. As much as the latest and greatest cars like the M2 must be ridiculous fun, I'd rather not borrow one for a ridiculous monthly vs a ratty sports car that needs some love that I own in its entirity. That's part of the experience for me. Plus I'd love to pass on the experience of tinkering and maintaining cars as a lesson in being resourceful to my boys when they're older.

We're currently back to cheap renting with zero debt and a family home is the next priority, by the time it comes for that second fun car they may likely all be too expensive. We currently earn well but the maths doesn't add up to a house and family car we want without over committing and risking ridiculous negative equity (I've been burnt by that, hence back to renting). The state of finance right now is challenging, people are clearly happy to entertain the current market so there's little reason for things to change until that dries up. Meanwhile, we might just YOLO it, but I don't envy those who are chucking out monthlies with little to show for it when the terms are up.

 

[Steven Rimmington]

When I passed 15 years ago, I bought myself a £500 306 1.9 Diesel I think it was around 60HP used it solid for a year then moved into something more modern, not new I think it was around 2k and around 5 years old so relative to my wage at the time, young teen!

My partner passed, she wanted a new car, I advised her she probably will curb the alloys, scratch and dent it. But nope happily get into debt to look good? Same with My Brother, he just passed and again got a brand new car?

I think the days of getting a banger first car are long gone. You hardly see older cars now, the types like a Ford Ka, Fiesta 306.

All about getting the latest iPhone so it's moved onto cars!

Debt ridden the lot of them

 

[MikeTheNative]

I'm not sure what you guys are on about. I'm sure the person spending £400 PCP on a poverty spec A series is doing it for the love of cars.

 

[Robbo]

When you look back on your life at the end, most people look back at the experiences they've had in life, not the objects they've owned. The optimal situation is to be able to afford both

As others have said, I understand your point, but if cars are one of your passions, owning a nice car is an experience in itself (and something you may use and enjoy most days). This is what I mean about perspective...

 

[MikeTheNative]

As others have said, I understand your point, but if cars are one of your passions, owning a nice car is an experience in itself (and something you may use and enjoy most days). This is what I mean about perspective...

There's definitely a difference between a car enthusiast spending the extra on what is their hobby to the person struggling with repayments on a brand new corsa.

 

[Robbo]

There's definitely a difference between a car enthusiast spending the extra on what is their hobby to the person struggling with repayments on a brand new corsa.

Absolutely agree with you there.

One other thing I would add is that there's a safety element too. I know some very wealthy people who couldn't care less about cars, and drive around in something old and a bit knackered. You'd be better off with the newest decent size Volvo you can find, surely...

 

[Bear]

As others have said, I understand your point, but if cars are one of your passions, owning a nice car is an experience in itself (and something you may use and enjoy most days). This is what I mean about perspective...

Absolutely and Im not saying what I said from the perspective of owning an old banger. I own a 2019 E63S and have had it since it was 1 year old, it puts a smile on my face when I drive it as its outrageous. As you say its about perspective, for me I happily spend decent money on holidays abroad

 

[Gibbo]

Absolutely agree with you there.

One other thing I would add is that there's a safety element too. I know some very wealthy people who couldn't care less about cars, and drive around in something old and a bit knackered. You'd be better off with the newest decent size Volvo you can find, surely...

This everyone has different outlook on life, our next door neighbour is a retired millionaire, he drives around in two Honda's, they get washed once a year whilst been serviced. He won't travel abroad either he owns a few properties in the area which he rents out and generally just enjoys retired life and his children will have a good inheritance.

My passion is cars and holidays, so I have a modest home which is paid for and some cars and enjoy holidays. Both me and Mrs do not want a big house because there is just two of us and so it would be a waste on us, we would rather enjoy life which the cars and holidays works well for us. Plus it would be nice to hopefully retire by the time I am around 50 and as such I've also focused on building up my private pension to fund early retirement and the cars are assets which are generally going up in value and can be turned into cash easily.

When I was younger my first car was a Peugeot 205 XS and it was £1400 if memory serves me right, not the best condition but it was all I could afford as I was not earning much but I saved my wages so I could go out and buy said car, even then I still needed to borrow like £500 from the bank to afford it and the insurance to drive it, but I paid the car off within six months as I've never liked money leaving my account, always had the mindset what I earn I want to enjoy or save and not be paying out for stuff, as I've got older then yes PCP/HP/Loans do allow you to get into nicer things but I've never been willing to buy a car and say have a £2500 monthly payment, I've never liked the idea of that in case I was all of a sudden out of work, as such my method has always been drop a decent size deposit and its nice to be fortunate enough to do that, focus on the best interest rate as I always pay attention to total amount payable and find what works best and generally keep the term short again because I generally pay them off early due to my money making money allowing for early pay off and hence doing car finance in first place.

The Emira will have around a 30k deposit, £150 monthly, 52k final payment over 20 months, because that way earns the finance company the least interest, plus its regulated so no front loading of interest as my plan is to either sell it and pay it off, or unlock funds and pay it off, either case no doubt within six months. But I rarely buy a car cash these days as my money can earn me more than the interest rate on the finance. I think the Corvette was my last cash car, even the Exige was put on finance, but due to a major luck out, I was able to cancel and pay it off within the two week cooling period, even better that car has already appreciated considerably in the short time I've owned it. The only other car I currently have on tick is the GR Yaris as it was 0% so with a 10k deposit was only £200 a month which was giving the car away, its term ends in March next year and my current mindset is to just give Toyota the 18k and keep the car, because right now its a lot of fun and is our sensible car out of a rather silly fleet of cars.

 

[pugheaven]

My first and best car was my 205GTi 1.9, hence my nickname since 1997 hahaha. For me, I'd dreamt of having a GTI and I bought it cash when I passed my test and it was my first dream. I didn't want to drive a crap box personally, I wanted what I wanted... and as it was my first car I wasn't in debt to it. I loved it. Went to shows, met people, was at Max Power show where Jordan sat on it hahaha. Met some great people all enthusiasts and it's an area of my life I miss... just wandering around car shows and something I WILL be getting back into. Track Days, Santa Pod, all things I've not done in a car for years (did bike track days was awesome). I miss the banter and it created epic memories especially my car feature (4 pages) in REVS Magazine no one can take that off me.

For me, I've got my dream house, it's nothing posh or massive but exactly what we need as a family and I plough a lot of money into that now especially as I get older (I'm 48 this year!). I'm not a fan of a lot of new cars especially with the amount of tech and upto buying my SRT8 I'd never ever spent more than £5,200 on a car (my Saab 93 was the most expensive at 5 years old when I originally bought it)... but some of the cars I've had have been fantastic fun... 205GTi, Alfa 147, 350Z Roadster, RX8, Saab 93 Aero Convertible... nothing glamourous here but given me so much pleasure... and for me, I love what I love... I'm not one for buying "badge" or new cars to say look how much I earn or look how posh I am, all of that crap doesn't interest me. I think there is a major element of this nowadays... i.e. I have a good friend for last decade has to have a posh car, not for the love of cars but because it looks good on the drive... however imho most people don't care.... it's money down the toilet.

However, and this is the big thing... if someone gets in debt over a car because they really want that car, experience etc, then I have no problem with that, it's their love/passion and choice... BUT at least they've in my mind bought it for the right reasons. People who buy cars as status symbols like Guci Bags and all that nonsense... for me... I don't egenerally have those people as friends anyway.

I mean right now, I've got my backup car the Xedos 9... only about a dozen left on the road in the UK, worst absolutely nothing 2nd hand now (I paiud £400 in 2014)... BUT she makes me smile because she has something that a lot of modern cars don't have... charactor and a history and for me, a car isn't just a car, it's a love, it's a part fo the family it's memories of family trips etc....

Not sure what the point of my post was, but you know what writing this, it's live and let live... if you're in debt to a car (within reason that you can have a life and everyones levels are different) but you love it... you open the curtains in the morning and you smile... then it IS all worth it...

 

[lordrobs]

I'm all for the memories and not the "things", I can fit my life into my car and I don't let me things define me. That said objects do enable experiences and memories. I feel the clock is ticking to own and enjoy a fun car again, and that's based on my memories of my EP3 and MX5. My aspirations are to own similar to tinker and to enjoy driving, not an expensive computer on wheels as such. I only feel that way becasue of my past experiences though, I'd love a car with character and battle scars. As much as the latest and greatest cars like the M2 must be ridiculous fun, I'd rather not borrow one for a ridiculous monthly vs a ratty sports car that needs some love that I own in its entirity. That's part of the experience for me. Plus I'd love to pass on the experience of tinkering and maintaining cars as a lesson in being resourceful to my boys when they're older.

This is absolutely where I am with cars now. There are modern cars that interest me but not enough to ever get me shelling out the cost of an A110 or Emira. In general, modern cars do nothing for me. Even the modern versions of my dream bedroom poster machines like the 911 don't float my boat as much as their classic predecessors.

The endless list of older cars I've always wanted to own (Elise, 944, 240Z etc.) have well passed the bottom of their depreciation curve and prices are on a skyward trajectory. This is fine if you see them as an investment and are therefore happy to put the coin in now but, and it does pain me to say this, I honestly don't think 'used' classics are going to do anything other than drop off a cliff in value when fuel becomes an issue. That might be 10, 20, 30 40+ years but it is enough of a concern to stop me putting proper money into a classic. Time warp examples maybe different but having a pristine machine I can't just use as I want without stressing about leaving it in a car park doesn't do anything for me.

So that leaves me with my MX5 that I spent 3.5k [edit 3.1k] on 9 years ago. That was deemed VERY strong money at the time but I wanted a rust free one that had never been welded and that was what it cost me to get such a car. Unfortunately the sub 30k mileage bumped up the price. Now, 9 years on, that car is still rust free and still hasn't seen a welder and is probably worth about £4.5k. I've probably done about that £1k difference in maintenance costs so all in I'm about as close to zero cost as I could hope for (excluding tax and insurance of course).

For me not having the flash motor has been a worth while sacrifice to be 100% debt free.

 

[jpaul]

Ive been on road trips across Europe in my cars and the wife loved it but she remembers the places we went to and not the car we went in and I say this as an owner of (by any normal measure) an expensive car

one distinction here is the experience of the driver versus the passenger - were you driving ?
driving you know how the car (or nice bicycle) shows compliance / pleasure as you chain some bends,
as a passenger, I think ?, not really a discussion I have had much, the experience is different; the engine note/power is more shared - so there is a selfish benefit(e: pleasure) for driver.

 

[Housey]

To the OP's opening question.

1) People earn different money
2) People have different outgoings
3) People have different priorities

If you are struggling to see how you can do this then it's 1, 2 or combination of the both. If you can but can't understand why you would, it's 3.

 

[Soviet]

Through pulling over vehicles whilst using the Road Traffic Act and running a lot of registrations through PNC, 90% of the top of the range ‘flash’ cars I deal with are rentals or under various finance plans.

It’s like having a brand new phone, people love having the latest bling for the ‘gram and want to look like they’re minted.

 

[MikeTheNative]

With interest rates so low and credit cheap if your going to buy a new car then finance does often make sense.

 

[Housey]

It’s like having a brand new phone, people love having the latest bling for the ‘gram and want to look like they’re minted.

Your realise that mindset is your own bias and insecurities showing themselves? It will certainly apply to some, but not most.

Virtually all new cars are financed and lots and lots of minted people have finance on their cars. My advice is never make a judgement on wealth based on the trinkets of success.

Some people want to be seen as is, most just fancy a new car, finance like most and don’t care what the world thinks is my belief. I don’t care how people I’ll never meet might chose to judge me (as a general point in life). I suspect most people of my age are the same.