How do people afford nice cars?

panthro · 9 Jul 2006 at 22:26

TomO said:
Debt is very good/useful IMO, if you structure/manage it right. i am always suprised by some of the debt is bad attitudes on here - its a tool and works as well as you make it.

Ultimately I would not want to be in debt though.

An important factor is also how comfortable you are with what you have. I have learnt a few lessons from being in debt as a student and I know that I dont ever want to be in debt i.e. juggling credit cards, purchasing things on HP etc.

[TW]Fox · 9 Jul 2006 at 22:29

panthro said:
Ultimately I would not want to be in debt though.

An important factor is also how comfortable you are with what you have. I have learnt a few lessons from being in debt as a student and I know that I dont ever want to be in debt i.e. juggling credit cards, purchasing things on HP etc.

No mortgage then?

No credit cards?

No pay monthly mobile phone?

Car insurance paid up front?

L0rdMike · 9 Jul 2006 at 22:30

I afford mine by doing 15 hour days and sometimes working 50-60 hours a week and having no life what so ever.

Simon · 9 Jul 2006 at 22:35

Current borrowing rates make saving up pretty pointless. Why wait, just buy what you want now

panthro · 9 Jul 2006 at 22:35

[TW]Fox said:
No mortgage then?

No credit cards?

No pay monthly mobile phone?

Car insurance paid up front?

[QUOTE='panthro]I know that I dont ever want to be in debt i.e. juggling credit cards, purchasing things on HP etc.[/QUOTE]

My mobile phone bill is not a bare essential, but it is an essential to my social life. I have 1 credit card, which gets paid off every month in full. I have no mortgage yet, which is besides the point, as it is a necessary debt, unlike buying a car on HP and yes my car insurance is paid for up front.

I dont want to be in unnecessary debt, for example, buying a car on HP and living beyond my means.

TomO · 9 Jul 2006 at 22:37

why is a mortgage a necessary debt?

you could always rent forever then you wouldnt be in any debt?

or save up whilst renting until you can buy outright?

(just playing devils advocate!)

panthro · 9 Jul 2006 at 22:39

TomO said:
why is a mortgage a necessary debt?

you could always rent forever then you wouldnt be in any debt?

or save up whilst renting until you can buy outright?

(just playing devils advocate!)

Necessary to me....I want to be a property tycoon

and I dont have a trust fund or a helping hand from the parents

[TW]Fox · 9 Jul 2006 at 22:39

panthro said:
My mobile phone bill is not a bare essential, but it is an essential to my social life. I have 1 credit card, which gets paid off every month in full. I have no mortgage yet, which is besides the point, as it is a necessary debt, unlike buying a car on HP and yes my car insurance is paid for up front.

I dont want to be in unnecessary debt, for example, buying a car on HP and living beyond my means.

You've changed your opinion already, as I suspected you would when I pointed out some things I'm sure you have which are classed as a 'debt'.

'debt' is a word which conjurs up negative connotations becuase people picture people who owe £5k they can never hope to pay back.

'Debt', well managed, is perfectly fine - remember you are in 'debt' to your mobile phone provider every single month until the Direct Debit leaves your bank account.

FWIW other than Student Loan which I don't personally think counts (given you pay it off at £naff all a month once you earn over a certain amount) I don't have any 'debt' so my view on it is totally impartial.

Provided you can actually budget and you dont put yourself into a position whereby you owe money you cannot reasonably pay back, 'debt' is far from the evil thing some of you guys seem to think it is.

Morba · 9 Jul 2006 at 22:41

Pepz said:
Also, a lot of people will be renting, paying rent each month allows for quite abit of savings. Whereas people paying off a morgage on a house or some kind of property will have less cash to spend, but after the 5, 10 or even more paying off the morgage, you've got a property, worth a lot of money, so its a long term investment, as opposed to a short term investment (renting).

Mike

ahh, because renting costs less than buying... not round here, not in any place that i have looked in the last few days across england and south wales.

panthro · 9 Jul 2006 at 22:42

[TW]Fox said:
You've changed your opinion already, as I suspected you would when I pointed out some things I'm sure you have which are classed as a 'debt'.

'debt' is a word which conjurs up negative connotations becuase people picture people who owe £5k they can never hope to pay back.

'Debt', well managed, is perfectly fine - remember you are in 'debt' to your mobile phone provider every single month until the Direct Debit leaves your bank account.

FWIW other than Student Loan which I don't personally think counts (given you pay it off at £naff all a month once you earn over a certain amount) I don't have any 'debt' so my view on it is totally impartial.

Provided you can actually budget and you dont put yourself into a position whereby you owe money you cannot reasonably pay back, 'debt' is far from the evil thing some of you guys seem to think it is.

I guess so. When I think of debt, its a word that reminds me instantly of being in a position that I dont want to be in. As for changing my opinion, opinion on what exactly? I was just being general in relation to buying a car on finance.

EDIT: I forgot about my student loan

Its not really naff all, as I pay over £100 a month which is noticable.
Unfortunately some people buy cars on a whim when they arent in a ready position to pay it back. I knew I guy from a place I used to work who missed 3 repayments and his car was repo'd IIRC.

Morba · 9 Jul 2006 at 22:42

mrk1@1 said:
In answer to the OP question, get married, get a dual income, job done tbh

you cant be married!

Simon · 9 Jul 2006 at 22:48

[TW]Fox said:
FWIW other than Student Loan which I don't personally think counts (given you pay it off at £naff all a month once you earn over a certain amount) I don't have any 'debt' so my view on it is totally impartial.

£100 a month isn't naff all

Simon · 9 Jul 2006 at 22:50

panthro said:
EDIT: I forgot about my student loan Its not really naff all, as I pay over £100 a month which is noticable.
Unfortunately some people buy cars on a whim when they arent in a ready position to pay it back. I knew I guy from a place I used to work who missed 3 repayments and his car was repo'd IIRC.

Remember not all loans are secured on the car though.

There is nothing wrong with getting into 'debt'. The problem is when people can't control there finances and then blame loans for being in the mess they are in.

panthro · 9 Jul 2006 at 22:52

Simon said:
Remember not all loans are secured on the car though.

There is nothing wrong with getting into 'debt'. The problem is when people can't control there finances and then blame loans for being in the mess they are in.

Thats true, but that is what I worry about. I have no doubt that I am capable of repaying and keeping on track, but the thought of "what if..." lingers in the back of my mind.

[TW]Fox · 9 Jul 2006 at 22:52

panthro said:
I guess so. When I think of debt, its a word that reminds me instantly of being in a position that I dont want to be in.

Exactly - you instantly think of the people in thousands of pounds worth of debt that they can't repay, making their life hell. This sucks, I agree. But it's not something that happens to anyone - generally only people who don't plan properly (And yes, being made redundant and therefore being unable to meet a plethora of repayments is lack of planning for an eventuality like that).

Provided you know what you are doing financially, debt is a valuable tool. For example, did you know virtually everything purchased for companies in the business world, from stationary to stock, is purchased on credit? Even if the company has cash for the stock at the bank, they will try to purchase on credit and not repay it until the last possible moment.

Why? Becuase it's often the best way to manage funds and increase levels of working capital.

As for changing my opinion, opinion on what exactly?

First, all debt was bad. Now its non-essential debt

Unfortunately some people buy cars on a whim when they arent in a ready position to pay it back. I knew I guy from a place I used to work who missed 3 repayments and his car was repo'd IIRC.

And this is where we both agree - finance/loans should not be used as a way of getting something you could otherwise not have a hope in hell of affording. It is when this happens that you get problems. Some people live their entire life trying to satisfy every whim by loading up credit cards with thousands and thousands of pounds with no clear plan on how to repay it back simply to fund a lifestyle they cannot afford to support. These are the muppets, these are the people you should criticise.

Not those who use debt as a valid tool for sensible financial management.

panthro · 9 Jul 2006 at 22:55

[TW]Fox said:
First, all debt was bad. Now its non-essential debt

All non-essential debt is bad

(in my opinion). Wasnt criticising anyone, just saying that its better to be out than in (of non essential debt).

NickXX · 9 Jul 2006 at 22:57

Simon said:
Remember not all loans are secured on the car though.

There is nothing wrong with getting into 'debt'. The problem is when people can't control there finances and then blame loans for being in the mess they are in.

Exactly

[TW]Fox · 9 Jul 2006 at 23:02

panthro said:
All non-essential debt is bad (in my opinion).

Do you really still think that despite my post above?

IIRC you plan to go into business, right? You really need to get over that opinion if you want to have competitive edge. Tying up all your cash in stock holding or equipment becuase you have an outdated opinion on the concept of debt is not good.

Simon · 9 Jul 2006 at 23:03

panthro said:
Thats true, but that is what I worry about. I have no doubt that I am capable of repaying and keeping on track, but the thought of "what if..." lingers in the back of my mind.

Can get payment protection policys to cover that. Live life now, no point dying with £20k saved up for that new car you have always wanted

panthro · 9 Jul 2006 at 23:07

[TW]Fox said:
Do you really still think that despite my post above?

IIRC you plan to go into business, right? You really need to get over that opinion if you want to have competitive edge. Tying up all your cash in stock holding or equipment becuase you have an outdated opinion on the concept of debt is not good.

You must be thinking of someone else. I have thought about it and you (and TomO) are right in that you can manage debt to work in your favour in order when it comes to buying things such as a new car. For myself, I dont think that in the immediate future, no matter how I managed it, I would want to take a bank loan on a car as I am happy with what I have and would like to stay within my personal funds while my house deposit gets bigger.

Im only talking about personal debt really. Business debt is a whole different ball game. I work in purchasing and supply and I know the score when it comes to business debt....totally different.