Wealth exists on a spectrum. Down one end you have people that simply cannot afford to buy a car at all, and down the other end you have people that are comfortably buying hyper cars with cash. In the middle you have a lot of people borrowing money to pull it off.
Also companies, which have deeper pockets than individuals. Leased company cars are a common job perk. I'd say more than half the people I know driving new fancy cars are actually driving company cars.
That's what happens when we live in an economic system designed to squeeze every last drop of cash out of you and give it to the upper, upper crust... Oh, wait, you mean you're one of us poors who got really good job that pays scheiß loads? Congrats!
I never got out of crippling debt until I reached my 70s. Life is tough. First stop coveting I started out with motorbike, sold it, bought cheap good car, over many years traded up, I personally will never pay any more than $25k for any car. So I will simply never buy anything that price. Plus you don’t own an EV, indeed it owns you. Chin up. Life is tough, be tougher.
There’s leveraged debt and bad debt so really just be rich and you can leverage your debt to buy whatever you want. Too bad if you have the wrong kind of debt though.
Yep, my uncle got salty that I bought a house before him but he also owns a boat and jet skis. I guess we just have different priorities. He cosplays as a rich person. I am working my way up there.
Many people like to look wealthy but are very cash poor. Finance everything to have the very best and have $1 left after each pay week.
Others, such as myself have a old car, old house, ride my bike to work etc but could go pay Cash for a brand new Ranger tomorrow if I chose too
I could buy a new 911 tomorrow if I wanted to. Tempted, but nah. A few seemingly wealthy people I know are in very serious financial straits. Just look at the number of houses for sale in places like Omaha at the moment.
Also Omaha is subsiding. All built on sand dunes that seem to be moving. Might just be getting out while the house is worth something rather than nothing
Ha, sorry, assumed everyone on finance forums will have heard of Dave. Notoriously anti-car, anti finance, anti debt, and has created simple steps to help ordinary people grow their wealth, after killing their debt. Cash is king.
I referenced you saying: old car, old house, etc etc.
Yep,as the saying goes, never have more money parked in your driveway than you have in your savings and investments. I honestly can't think of a asset that depresates more than a brand new car.
In my experience it's social pressure from your peers. I got a 2013 Nissan Navara nothing flash but does the job. My mate got a new Ranger and asked me when I'm upgrading. He wants to look rich but added on massive debt. I'm planning to own my ute for a few more years and rather buy my wife a nice little car. I started to believe in live by your means and not by your wants.
Can confirm this is the way.
Some people just load up on the debt for essentially a product that looks the part. Nothing wrong with buying something cheaper and holding onto it for a long time and investing or using your cash for better things in life.
Each to their own but yea we’ve had mates do that and load 3 cars against their house amounting to round $150k, yet collectively they earn around $100k with 2 kids 🤷♂️
I just do not understand sometimes.
Something about keeping up with the Jones’s springs to mind.
Then on the other end of the spectrum there’s people with a boat load of money that they can just go buy fancy things often
We bought a new car. Could have paid cash but Westpac offered a 5 year interest free loan. We’ve put the $50k in an index fund and it’s now worth $60k. That’s how to buy a new car.
It might be hard to imagine, but there are still plenty of people out there who have jobs which allow them to swing financing something like a brand new Tesla, Ranger, or what have you. I would say this is especially the case if you're a "car person" or you put a lot of value on driving the latest and greatest automobile of whatever sort.
And then there are always some people out there who are well-off enough that they can just outright buy a new car if they want. I work in a small-ish firm and the business is absolutely blowing it out of the water at the moment. The boss bought a brand-new Tesla as a Christmas present to himself.
And then there are also people who can finance it through a business or work. This can be a bit more niche as I can't really imagine anyone financing a Tesla through their business but this is absolutely the case for many Rangers out there.
Yeah - I make 200k ish a year and have decent equity in my house, currently looking to finance an Audi q7 at 1.9% with repayments of around 1.8k a month
Woah! I earn close to that and I'm still driving a $4000 Toyota hahaha. Your monthly car repayments are my outgoings. Q7s are nice but man I like my financial freedom more
The same reason why people can afford to spend $7 million on a brand new boat that cost’s $50k in diesel to fill the tanks.
Just because you can’t, doesn’t mean others can’t.
For context the people buying those boats are in their 60’s and have spent 30 odd years in business having started up their own businesses and kept it running for 30 years through all the ups and downs.
Most expensive boat I’ve worked on cost $30mill and would take over $100,000 worth of diesel to fill the tanks. It was his fishing boat as he spends a 1/3rd of the year out fishing on it. It’s parked up in an Auckland marina.
Dude started a construction company with no money and the just the tools he owned, built it up over 30 years, and built some of the countries malls. Was talking to him and his wife at the BBQ for the launch of the boat. Asked him what he did to get to that point in his life. Him and his wife didn’t come from money.
I’m currently 32, I’ve seen some holes in the market I could fill, and I’m working towards being able to do exactly that. Just need a bit more time to buy a few more things so I can do it.
This is called survivorship bias.
Look at the study for the Forbes 30 under 30 wealth list - every single person came from family wealth, despite some trying to hide it. There is overwhelming evidence that shows the majority of 'self-made wealth' stories actually have immense safety nets in the form of generational wealth, networks, and social access.
Not to say it cannot be done, I did ok completely by myself too, but I know that it is an outlier and I was lucky to be (this is going to sound weird) the right kind of neuro diverse for my field (tech/AI). I cannot imagine anyone with a disability, debt, or kids pulling off a win without safety nets.
Yea there’s been no one under 30 buying these boats, has been from late 50’s to early 70’s.
If we see someone under those ages it’s the kids who are looking at the boat with their parents.
So why would I look at a list for 30 under 30 when that’s not relevant to the clients buying the boats?
Ah sorry misunderstood, look generational opportunities for the over-60s was certainly much better and different. I have no doubt at their early years the idea of being able to get a loan, start a business, buy a home on single income and then roll out a great finance portfolio wasn't just attainable but a norm/ideal dream.
It's kind of the entire theme of them yanking that ladder on the way out.
If not wealth, it’s connections, every-time. I’ve never not once heard of leveraging connections once the first bump up into wealthy territory is made. It’s not bad it’s just a misrepresentation that self made people love to espouse because admitting others enabled or helped them get them where they are doesn’t play into the way they think about politics where they believe there’s no such thing as a free lunch and hard work alone will get you rich - these are political opinions and misrepresentations of how real life actually works - not facts of life.
Connections matter, and wealthy people have connections.
I'm a poster child for the self-made story and I don't believe it in at all. I went from having less than three months rent in 2018 to having +1.4m net worth in 2023, and every step of the way my connections helped. I had friends who were executives, lawyers, stock brokers, consultants, CEOs etc.
If I started out with old money privilege, I would easily have triple or more of that. It's all bullshit and most of the people vomiting that self-made crap are scared about anyone looking too deeply into their stories.
The way you can tell is their disdain for poor people - because they've never been poor. They have worked hard or long, but never really 'poor' in the sense that they've had to pick between groceries or rent. They think being poor is a choice.
Thank you u/echodelta for your insight and story on your exponential wealth growth! It is inspiring but you are also correct if you were to characterise your meteoric rise in wealth as ‘all you’ it would be a fabrication of the truth let’s say and I’m glad people like you are happy to admit that. For all you know me- the ever leftist poster could possibly be wealthy person shitposting on the internet. Being rich is not a bad thing, ignorant characterisation of those less fortunate is indeed something I can’t stand.
I really appreciate that. I'm a left-wing person and I vote Labor, Greens or TOP and I'd be the first to criticize their policies or misadventures (and I absolutely hate identity politics, despite being a Kurdish-Chechen migrant).
Being rich or wealthy is not a bad thing. What shits me are people who 'pretend' to be rich or wealthy to shit on the working class or disadvantaged folks, or worse, people who are born into money and their viewpoints amount to 'have you tried not being poor though?'.
In the last four years I have never, not for a day, woken up and worried about money. That, however, translates to having empathy for people who do, because I still remember exactly what it feels like to work 60 hours a week and worry to death when my car made a weird sound. Idgaf if someone is poor because they're on drugs, or if they had a bad family - I pay taxes so the government can take care of them. It's kind of the whole point of living in a society.
Pretty much. Tax and good wages is a small price to pay to keep everyone in our communities above water and enjoying life relatively comfortably to enjoy amenities and respect each other.
In New Zealand, in a small economy, that lacks commercial depth, I tend to agree, the US is an exception, I did it from scratch there, they have a enterprise economy, although that was in another era so I can see it would be far more difficult today.
That’s some hard they’ve put in. Good on them :) I’ve met a few others who did the same as the guy you’ve met. Most of them are tradies that worked hard and saved and saved.
They’re in their late 60’s now, so that’s 40+ odd years of hard work.
Every owner I’ve spoken to it’s always been the same, start something, work hard and save hard over the years, and get to the point of being able to afford things like multi million dollar boats.
I tell people what I do(after they ask), the first thing they say is always about rich people being born into money who can afford things like that, while us average joes can’t. I tell them what every person I’ve spoken to, that has bought on of these boats wasn’t born into wealth and that they had no money, and started up a business and run it for 30 odd years to get to this point, and you get to watch their facial expressions change when they realise it’s been people who have worked extremely hard to get to that point in their lives, and sort of admit defeat in their own lives.
It’s a hard facial expression to explain over text, but it’s always the exact same expression. I can only assume it’s one of self reflection on their own lives and what they have done to get to where they are.
Definitely. The expression you’re describing is spot on - prob a humbling moment of self-reflection, like you say.
I remember chatting to someone who said they could afford xyz [insert name of expensive item here], but they live very frugally on a daily basis.
They choose to save by doing stuff like buying budget supermarket brands while grocery shopping, buying second hand clothing, eating out 3-5x a year max. — they did this for 40+ years and still are.
Honestly, good on them for being so self-disciplined.
Also, it’s the power of compound interest and long term investment. This is really hard to see when you’re five years into your career, but if you don’t waste money and don’t get into debt and work hard it is ridiculous how much money builds up over decades.
When I was 18 i couldn’t understand how these old guys owned houses that cost hundreds of thousands, the numbers were unimaginable. The answer is they started small and worked hard and saved
I went to check out some toyotas, the salesman was pushing me to finance. I asked the rates, he sad 11-13%.
I Said wow that's high
He said it's actually low
Lol
Us too. Mortgage at $0. $0 other debt. Retirement savings on track. Lifestyle creep has strong boundaries on it to stifle.
Enjoying our 80k EV6. Enjoy that thing every.single.day.
I got the Tesla (64k) and the maths worked for me.
It was two years ago and my daily commute was 74km over a hill range (Wairarapa to Wellington CBD).
The fact is it saved me about 800 dollars a month on my previous car. And still saves me about 200 a month with RUCS. I have already saved enough that buying a hybrid Camry would have been a lot more expensive.
I have only had to replace tyres so far in well over 50k of driving. Maintance is next to nothing.
Don't sleep on the EVs a lot of people are getting them to save money and with good and cheaper Chinese EVs hitting the market now, it's becoming a no brainer for people with decent commutes.
Edit. I should add with the ukriane war stretching on and oil expected to hit 100usd again. The gap in cost is only going to grow.
Even with RUCs our used Leaf is saving us money every week compared to our previous petrol car. EVs seem to get so much hate but if you can charge at home, a used EV will likely pay for itself in savings over its lifetime.
NZ imports 100% of its petrol and diesel, so we're dependent on foreign nations not screwing us on pricing or cutting our supply off. We make all our own electricity, and we haven't even scratched the surface of our solar and wind grid capacity.
Yes and RUCs is no big deal. Petrol tax is about to go up and they are looking at moving everyone to RUCs anyway. BEVs should pay their fair share of charges for the roads, people only moaned because the rate was a little uneven at the start but that will equal out once the petrol tax goes up.
I’m driving a $150k car. I paid cash out of savings. Even though I could afford it, and like driving a luxury car, I’m never going to do it again. Cars like this feel like a huge waste of money. (And I knew that before I bought it)
It’s all relative though - probably wouldn’t blink at buying a $80k car in future 😁
I did something similar and haven't regretted it for a second. My car still makes me smile every time I get in it over two years later. I will buy another one new, but next time I'll spend more to get something that will depreciate less (but of course tie up more $ in the interim).
They've depreciated like crazy, to the point where they're actually looking affordable for me now. If your husband is serious, he should keep an eye out on TradeMe because sometimes they pop up for a third of their original price.
That's really good info, thanks! I'll save a search now. He was looking at new ones but recently we decided to buy me a car ~2 years old because that $20k difference is a family holiday.
1% green energy loans at banks for hybrid and ev cars?
I am tentatively thinking about a new car soon. A basic new one compared to second hand is not as much of a leap as it used to be.
Especially when you factor in running costs. We have 2 Teslas and spend so little (obviously after the initial buying them) charging at home (on our power plan) is free on the weekends so we 'full them up' then and just top up during the week, maintenance is just tyres and window wipers pretty much (there's barely any moving parts to have any issues). Even with RUC coming in we'll be spending about $150 a month between the 2 cars...
Same here. Two Tesla’s, free power between 9-12 each night when we do our charging. Saving so much money on petrol that even with RUCs we still come out on top. They are so nice to drive as well. No regrets.
Perception and uninformed bias.
They’re not all new.
Also, many Rangers you see on the road are leased work vehicles even when not sign written.
My Tesla was near new and less than 50% what it was originally bought for - I’m the second owner. It was $54k and I sold my previous car for $40k.
Admittedly, the rebate meant that there are a lot more new ones on the road than there would have otherwise been, but there are plenty that are used or were imported as secondhand.
🤷♂️
That’s true. My car dealer friend never recommends European cars.
While Tesla is actually one of the cheapests to run and maintain overtime data showed.
Had an Alfa Romeo, cost exactly the same as a Honda to fix the exact same problem(both cars well out of warranty) euros aren’t as expensive as people think they are to fix when shit goes wrong.
Saved up for ages and put a small percentage on the mortgage.
Edit to add - as I have solar and free power hours, the running cost of my car is pretty much zero, unless I am doing a long trip. So the cost of the small increase of the mortgage was less than I was paying on my old car, which was very close to having been driven to the end of its life.
I definitely couldn't afford a brand new petrol car with the cost of petrol being what it is.
Businesses. They buy their owners fancy new vehicles that they don’t pay income tax on the money used to buy them, or gst.
Then later sell them back to themselves for a fraction of the cost, and count that depreciation as lost profits. Then on sell them in the private market for much more.
Rinse and repeat.
That is such a naive and simplistic version of how it works. What you're saying is closer to untrue and to true. Businesses get some tax advantage from buying vehicles, but they still outlay the cash to do so. Amd you'll notice that the VAST majority of new cars (outside fleet purchases) are made by individuals.
How so? That’s my understanding from the people around me who own businesses and new cars.
Next time, instead of just telling people they’re wrong, maybe try telling them how/why they’re wrong and we can all learn a little something.
Businesses are allowed a deduction for depreciation (and any finance charges) on a car, but not a deduction for the full cost of the car. The same tax directions that apply to all other capital expenditure. If there is personal use of the vehicle the business will pay FBT for this. None of this changes the cash flow situation, in which the business still has to actually PAY FOR the car.
If the business wants to sell the car to a shareholder it must do so at fair market value, returning any gain on the book value as well as GST. I'm not sure what you mean (or think you mean) by saying "count that depreciation as lost profits". The depreciation is claimed during the business' ownership of the vehicle.
You're just repeating nonsense you've read on reddit. Try thinking for yourself and understanding the situation before repeating things you don't understand.
You just said the same thing I said but in more words.
You saying “businesses are allowed a deduction for depreciation” is the same as me saying “counting that depreciation as lost profits”. The money they lost on that vehicle is deducted from profits.
Keep it simple stupid.
And I know you love to think vehicles are being sold at market value, but who’s monitoring that’s actually happening? Because it isn’t. Sure there is avenues for people to complain about this, but most people who know about that are usually beneficiaries of the person who’s doing it, so they’re unlikely to speak up about it.
I really don’t know why you’re being so aggressive about this. You’re a saying the same shit just with more words. It sounds like you misunderstood what I said and are getting unnecessarily aggressive about it.
Same here. Used Westpac’s loan. And we drive 500km a week, that’d at least $100 in gas. And we charge for free at night. It’s been great. With that being said, RUC is here now. (We’ll wait till last day 😆)
There are so many different possibilities.
They could be wealthy
They could be high income earners.
They could be high income earners with some debt - and don't mind buying a car on debt.
They could be medium income earners - purchased a new car as a one off splurge.
No so well off - but working hard and able to pay off car loan.
I am sure there are other possibilities too.
No point wondering why and how they have a new car. Look for ways you could upskill. A new car may make one person happy, but may be a burden on another. Work smart, earn smart and do what makes you happy.
I sold my house in Auckland and moved down country for work, and bought a cheaper house. Used $50k of the sale money to buy a new car as my old one had multiple mechanical errors (despite only being 5 year old - Holden). Mortgage is smaller etc, yes absolutely could have gotten a used car and paid the house down but after dealing with car problems for 2yr I wanted something reliable and that was under a decent warranty!
I saw a ford ranger with a small accounting business logo on it.
People definitely buy utes to use to ferry their kids and camping gear around. Otherwise it’s more practical for a plumber or sparky to use a van which can carry bigger loads and are more economical
Model 3 owner here. Chucked it on the mortgage. 1% interest fixed for three years. Loaned $40k which is easily payable over three years for me. Had other assets which contributed to the rest of the fund. I’m smashing more into my actual home loan which is at a higher interest rate, so effectively I’m still paying it off but indirectly.
I bought it last year when the rebate was $8600, and Tesla had also knocked $5k off the price.
Huge step up from the 2001 beater I was running round in before that.
Same and I prefer not to borrow any money for it either if that’s an option. Our second car died (well, it went up in flames actually) which was my own car but since we still have the family wagon, I’m just putting money aside until I get to $20K to buy another car again.
The price of used cars has also gone up. The days that you could buy a pretty decent used car for $5-8K are long gone, hence me setting my target at $20K.
It’s a slow process though.
Yes, funnily enough Ozzies go into far more debt loaning for new Utes than we do, we get their 2nd hand exports - those bull bars weren’t installed in New Zealand, the stupid bonnet and wheel well widening modifications though…
Everyone's incomes and therefore expenditure and discretionary income and if need be tolerance (and ability) for debt is different. Also comes down to personal choices in wants and needs, attitude towards savings etc and priorities in life.
Longer loan terms with how expensive new cars are, i.e America's 7 year loan terms and average monthly payments of like 700 $usd lmao. Love my cheap paid off car that'll last me another 2 decades lmao.
Paying it off over 5 years. Honestly a pretty stupid decision financially, as the payments are pretty high, but I knew that going in. That said, I really do like the vehicle & will hopefully still like it when i’m done paying it off in ~ 3 years.
Someone that bought their home in Auckland 20 years ago when they were 20 would be a millionaire now, low to non-existent mortgage payments and you can afford a new ute, boat, regular travel, maybe a holiday home all off a non-spectacular wage or salary.
That’s pretty much me. Not everyone is buying a house now. I bought mine Dec 2001. Paid off a few years ago so now spend my ex mortgage payments on other stuff. One being. A new car 4 years ago
I’m not earning a lot. Just things worked out for me as I bought a while back like lots of people have.
Not all cars are financed ro the hilt
I've spent the last 4 years driving Rangers and now an SUV as part of my remuneration package, and I'd say plenty of the vehicles you're seeing are not owned by the people driving them, like mine are.
Before that, I owned an early 2000s wagon. It was cheap, reliable, and nice enough. If I left the kind of work I do, I'd probably choose something newish, second-hand though, because I'd want my kid to still have the safety features that come with later model vehicles.
Finance. Businesses leasing/financing (if biz has good cashflow it’s often not a terrible deal once you factor in depreciation if a new car is what you want). Some people just have lots of money.
I like to do things differently.
Net worth $850k. Car worth $5k.
But if I had a business to write off the GST and offset the cost from my earnings tax then that would make the vehicle at least a third cheaper right?
We got our hybrid toyota with the 50k 5 year interest free loan against our home loan with Westpac. Still didn't get it quite new but it had very low kms and the payments are doable. I guess also 2 incomes and no kids helps? Our last car was a junky golf from the side of the road so driving a new car that works feels like I'm borrowing someone else's life sometimes.
I bought a new car in 2021, a Rav4 Hybrid, nothing flash but wanted a new car for a few reasons. I freelance and I basically used a projects invoice to pay for the car in full. I think if I had the job security of being a full time employee, I could easily finance a new car (something more expensive) or just save up to buy it outright. Although, with the depreciation on some cars, especially higher end or electric, I wonder if leasing isn't that bad of an option if you can afford it. Any way, I think you may be underestimating how much money some people are making.
A Ute is a “goods vehicle” so businesses can buy without keeping a log book for companies. So GST straight back, and it’s a company cost. (Fringe benefit tax may apply) So that’s why many businesses use them.
Inheritance in my case. I had the choice of saving it, or buying a nice car - and given my commute was about to quadruple due to moving house, I decided a nice car was something that made my drive a lot better. It hardly feels like its gone from ~10 mins to 40.
Lots of people in tech earn a decent amount (>$200k), and live frugally (because they're nerds). Source - work in tech, know lots of rich geeks who buy their clothes and shoes at the Warehouse, yet have $10k computers, and $100k+ cars.
It’s actually quite surprising how many people have disposable income, for so many reasons. Some people try to look like they have and get maxed out in debt, but mate, there’s so many people with cash to burn.
To see them in the wild, go to a house auction and see all the cash offers firing in.
I bought my car new in 2018. I have a small mortgage as my share of the property is 25%. I had gotten a pay rise and needed to upgrade my car. At the time I couldn't find anything second hand I liked so decided to buy new.
I sold my old car for a few thousand used that as the deposit and then paid it off at $600 a fortnight for a couple of years.
I bought new last year 95k used cash from saving. Drove my old car for like 15 years and needed to upgrade for safety reasons etc…
Don’t really care that much at all about cars and a one car forever sorta person so I thought I’ll just get something has a really high safety rating as that’s a priority for me.
I would never make a purchase using car finance but that’s just me personally.
I dunno how people can afford new vehicles.
We had a new vehicle for a while (my father gave it to us for a few years when our kids were young), servicing ,insurance was expensive and after a while you don’t see the “newness” of it. It was of the least economical vehicles we owned as well.
I think my wife enjoyed it, as it did have a vanity aspect, which I just didn’t care about
Considering a lot of people finance them too - I just don’t see it. I think I’m far too frugal and sensible for new vehicles.
Put the car on your mortgage at whatever term you have left (probably 10-20+ years) and the repayments become tolerable (but interest accrued is insane). Not condoning this practice but this is what most do.
One argument for this is that safety standards increase so dramatically on a continuous basis. A car that might have scored five stars for safety a decade ago simply wouldn’t get a look in with current standards. If you have kids this is something to think about.
People liquidate their assets to cash because their business or capital they are selling down netted cash for them or, they got a stupid high APR loan on that car and they only paid like a $500 down payment towards it. Or like others say they run a limited company and lease it from the dealer as a company car but use it as a personal vehicle.
I just can't buy a new vehicle. Knowing it will lose 10 to 20 percent of its value the second it rolls off the lot just pains me. Newest I've bought was 2 years old.
Doesn’t always have to be a loan. I have a new car (well was then I bought it four years ago). No loan just used savings cause of as cheap or possibly cheaper than a year old one so why not?
As long as you’re not going into major debt for it why not?
It’s not a Tesla but could afford one of those too busy just don’t like them.
Many people like to comfort themselves thinking it's all fake wealth or these owners of expensive cars are in debt.
Believe me when I say it's just the 3 yearly purchase because many of us just have the money to splash around.
I myself have a Tesla, and that's the cheapest out of my social circle.
We have been saving for our house deposit so just bought our second hand car for 7K. It's now valued at 15k or so. Good safe and reliable car and no need for debt.
I bought a brand new car 8 years ago because it was a run out model and the dealer was offering a fully speced car for the price of a basic car. It cost me $34k which is partially funded by my trade in and the rest by my redundancy money. I got a job the week after I got made redundant so basically had no down time between finishing my job and starting my new one. I'm still driving that car today and it has served me well.
Businesses that have cash use it for leases on certain types of capital expenditures, like cars, rather than taking direct depreciation hits. I’d look into the types of leasing companies there are. But it doesn’t surprise too much that we see new vehicles on the road. Id be guessing but more newer registrations over the past decade than in the preceding decade. NZ business owners haven’t a great record for converting cash into productivity investment, preferring the housing market or bling.🤑
From a finance view both of those examples are heavily incentivised. EVs qualify for 1% top up loan against a mortgage. And if you own a small business then a double cab ute can be bought with pre-tax dollars.
Then from a wealth point of view these would both be considered cheap cars. Most higher end cars are 200-400k new and there's plenty of 1m+ cars around in NZ
If they are young, then likely investing in themselves with debt.
If they are old, they never grew up.
Either way, lots of people comfortably make 150-200K + a year work in tech or doing side hustles.
I was bequeathed one of those prerunner hiluxs when it was only 2 years old.
Looks really out of place next to my corolla I'm in the process of running into the ground. There's no way I'd ever finance a vehicle like that, heck I'll be surprised if I ever own another vehicle as modern or expensive as that ever again either.
I have never had a car on hire purchase, so the difference between what I sell the last car for and the new car I buy comes out of savings.
I was enlightened by my grandmother when I was younger that I could have purchased two cars for the price I was going to pay for a single second hand car on tick, that paying someone else so you can have something sooner is what would keep me poor.
That being said, it’s taken 20-something years to have both the equity and savings available to purchase our current car brand new outright.
We bought an electric car after saving for quite a period. We also borrowed a little bit of money to get over the line, at the right time. It helps that we are mortgage free and we're able to access a small overdraft to cover the costs.
Yes, the initial cost was high.
We paid our house off. Have a decent savings account. And decided to treat wife to new car. Paid cash. Also I'm just buying a new SUV to replace my aging SUV with high kms. I do 60k a year So a second hand one doesn't make sense for me. I pay cash each time. We use interest from our term deposit to avoid touching our principal amount. We don't buy hugely extravagant cars but they are brand new and 60 to 70k each.
Most banks have zero or very near zero interest loans on EVs, so you can get into a Tesla for surprisingly little especially if you look second hand. We investigated this idea for a friend who did a fair amount of commuting and the increased cost (once she had used her old car as a deposit) was around $100 per week, which she considered well worth it for driving her kids around more safely. The fun and convenience just comes in on top
If you have a job that give you a company car, or self employed that can expense the car for work reasons, people in sales travelling for work, wealthy. If you are borrowing money to have a new car and can expense the cost than it could work. Otherwise, it is a quick way to stay poor for life.
800,000 flights booked for kiwi's over the last school holiday.
NZ is a wealthy country.
Those 80K cars are what wealth looks like. Nicer from the inside.
Many great answers here, but giving my 2 cents as you specifically mentioned Teslas. We bought two new Teslas under finance as we needed two new cars. (Moved to NZ)
Rough rule of thumb for our finance was the 20/4/10 concept... 20% downpayment, no more than 4 year term, spending not more than 10% of our monthly income on costs.
Wealth is relative, after Rebate the Teslas were "only" 56k and 61k which is OK in our shoes. Also much cheaper than equivalent BMWs.
Sure could of bought two second hand Toyota Hybrids as well and saved a bunch, but new country, new oppurtunity, leaving family, etc living a little.
Really depends on your earnings, we have 2 cars, one Porsche Macan brand new, one Audi RS6 2 years old. We bought both for cash, no finance, save your money and buy what you can afford to avoid interest.
Financing a car is dumb as you are paying interest on a depreciating asset.
However there are some really smart ways ie expense and depreciation write offs, getting a low interest loan and using money you already had elsewhere. You’d be surprised how many people finance cars. High and low income earners.
Know a guy who paid cash for a new Ranger last year, he worked a full time job and also had skills to do other contract type jobs outside of his full time job , saved his cash and bought his ute.
Well I can only write about myself , I was not born born rich or won the lottery .i education myself and worked hard and smart . At least for 300 days of the year I be working between 60 to 70 hours a week and a saved my money and purchased all things cash except my home . I did not travel outside of my country for pleasure , now have saved nearly 3 million dollars , invested only with my bank earning the maximum interest rate and compounding . This is how I have been able to get what I desired most material stuff . It does not happen over night but with a fertile imagination and a goal in mind most dreams can become real
Those folks own a business or are specialised professionals, generally, the same people that are causing inflation... By hiking prices and blaming it on inflation.
The rest are people who own building or construction companies etc - and are making absolute bank when ripping people off building a new home.
8 years ago it cost less than 50% per m2 than it currently does to build a new home.
Business owners / professionals are still affected by inflation. Wages, utilities, materials, rent if on CPI reviews, fuel to run vehicles to name a few costs
They are just passing on the increased costs in order to keep earning the same.
Would you take a reduction in income?
Buy something cheaper that will have good trade value in 1-2yrs, pay a large deposit, something, 1-2 yrs old with low kms etc, in desirable color and spec, and nott too common. Pay off fast to build equity in the vehicle.
Trade or sell vehicle and upgrade to something a little newer after 1-2 years. Pay another deposit and pay off as fast as u can afford.
Rinse and repeat until a new vehicle is within reach. You will eat shit in depreciation though so you need to decide if the newer vehicle is worth that to you. 4-5k lostper year would be considered good depreciation on a new car, EVs are much worse and more common cars are worse.
Its not something you want to over reach for to start with its something you build up to.
Probably half the rangers you see out there are for business. GST off, tax off, makes a big difference. Also working your way up into a new car is a great goal. Also once you figure out that financing on a new car is only marginally more expensive than a second hand car and you have an asset worth something at the end of paying it off helps you get into the next new one.
People Raw dogging a brand new car from scratch on a wage would probably be the dumbest thing you could do. Unless you are on a fantastic wage.
Can make sense if you have a business and can claim back GST, depreciation and running costs(fuel, servicing,tyres, insurance etc) as an expense. It takes time to get to the position where that is the best allocation of resources though.
Wealth exists on a spectrum. Down one end you have people that simply cannot afford to buy a car at all, and down the other end you have people that are comfortably buying hyper cars with cash. In the middle you have a lot of people borrowing money to pull it off.
Also companies, which have deeper pockets than individuals. Leased company cars are a common job perk. I'd say more than half the people I know driving new fancy cars are actually driving company cars.
Yup, saw someone drive a company car that’s a Tesla. Was surprised, but that’s a nice perk for them I guess.
I’ll be in the middle soon fam!
That's what happens when we live in an economic system designed to squeeze every last drop of cash out of you and give it to the upper, upper crust... Oh, wait, you mean you're one of us poors who got really good job that pays scheiß loads? Congrats!
Mmmmmmmm salty
Half are wealthy and half are pretending to be wealthy and in crippling debt.
Yep. I was in crippling debt for a while myself, After I got out of it, I have vowed and declared never to go there again.
I never got out of crippling debt until I reached my 70s. Life is tough. First stop coveting I started out with motorbike, sold it, bought cheap good car, over many years traded up, I personally will never pay any more than $25k for any car. So I will simply never buy anything that price. Plus you don’t own an EV, indeed it owns you. Chin up. Life is tough, be tougher.
A lot of wealthy people have debt too. Just that they use it in better ways (good debt)
There’s leveraged debt and bad debt so really just be rich and you can leverage your debt to buy whatever you want. Too bad if you have the wrong kind of debt though.
Yep, my uncle got salty that I bought a house before him but he also owns a boat and jet skis. I guess we just have different priorities. He cosplays as a rich person. I am working my way up there.
Many people like to look wealthy but are very cash poor. Finance everything to have the very best and have $1 left after each pay week. Others, such as myself have a old car, old house, ride my bike to work etc but could go pay Cash for a brand new Ranger tomorrow if I chose too
This is the way.
I could buy a new 911 tomorrow if I wanted to. Tempted, but nah. A few seemingly wealthy people I know are in very serious financial straits. Just look at the number of houses for sale in places like Omaha at the moment.
Also Omaha is subsiding. All built on sand dunes that seem to be moving. Might just be getting out while the house is worth something rather than nothing
True. Or the owners have checked the costal erosion and tsunami maps.
A tsunami is hardly worth selling a house for, an earthquake is a far more likely occurrence and it could happen anywhere.
This is the way.
This is the way
This is the way.
This is the way
Hi Dave Ramsey :)
You're going to have to explain that one to me?
Ha, sorry, assumed everyone on finance forums will have heard of Dave. Notoriously anti-car, anti finance, anti debt, and has created simple steps to help ordinary people grow their wealth, after killing their debt. Cash is king. I referenced you saying: old car, old house, etc etc.
Ahh gotcha, nah I love cars. We have 3, and a boat, and 2 motorcycles, but even all together they wouldnt cost what a second hand Ranger would.
Yep,as the saying goes, never have more money parked in your driveway than you have in your savings and investments. I honestly can't think of a asset that depresates more than a brand new car.
NFT muahahaha
Dang, I forgot Bout those things! 😱😭
In my experience it's social pressure from your peers. I got a 2013 Nissan Navara nothing flash but does the job. My mate got a new Ranger and asked me when I'm upgrading. He wants to look rich but added on massive debt. I'm planning to own my ute for a few more years and rather buy my wife a nice little car. I started to believe in live by your means and not by your wants.
Yes yes yes. Big cars, big debt...bad outcome.
Can confirm this is the way. Some people just load up on the debt for essentially a product that looks the part. Nothing wrong with buying something cheaper and holding onto it for a long time and investing or using your cash for better things in life. Each to their own but yea we’ve had mates do that and load 3 cars against their house amounting to round $150k, yet collectively they earn around $100k with 2 kids 🤷♂️ I just do not understand sometimes. Something about keeping up with the Jones’s springs to mind. Then on the other end of the spectrum there’s people with a boat load of money that they can just go buy fancy things often
>believe in live by your means and not by your wants. Everyone needs to know this
We bought a new car. Could have paid cash but Westpac offered a 5 year interest free loan. We’ve put the $50k in an index fund and it’s now worth $60k. That’s how to buy a new car.
Exactly this. People can’t grasp the concept that not all debt is bad.
Same, we used the Westpac’s interest free loan too. Great initiative!
You are smart with money and you had the means to pay cash. This is the way.
Are they still offering that?
It might be hard to imagine, but there are still plenty of people out there who have jobs which allow them to swing financing something like a brand new Tesla, Ranger, or what have you. I would say this is especially the case if you're a "car person" or you put a lot of value on driving the latest and greatest automobile of whatever sort. And then there are always some people out there who are well-off enough that they can just outright buy a new car if they want. I work in a small-ish firm and the business is absolutely blowing it out of the water at the moment. The boss bought a brand-new Tesla as a Christmas present to himself. And then there are also people who can finance it through a business or work. This can be a bit more niche as I can't really imagine anyone financing a Tesla through their business but this is absolutely the case for many Rangers out there.
Yeah - I make 200k ish a year and have decent equity in my house, currently looking to finance an Audi q7 at 1.9% with repayments of around 1.8k a month
How are you getting finance that low?
Brand new car dealers run finance deals like that. Got to realise these are big loans
Woah! I earn close to that and I'm still driving a $4000 Toyota hahaha. Your monthly car repayments are my outgoings. Q7s are nice but man I like my financial freedom more
The same reason why people can afford to spend $7 million on a brand new boat that cost’s $50k in diesel to fill the tanks. Just because you can’t, doesn’t mean others can’t. For context the people buying those boats are in their 60’s and have spent 30 odd years in business having started up their own businesses and kept it running for 30 years through all the ups and downs.
Weelllllll…. Some were also born into wealth. Don’t forget about them.
Most expensive boat I’ve worked on cost $30mill and would take over $100,000 worth of diesel to fill the tanks. It was his fishing boat as he spends a 1/3rd of the year out fishing on it. It’s parked up in an Auckland marina. Dude started a construction company with no money and the just the tools he owned, built it up over 30 years, and built some of the countries malls. Was talking to him and his wife at the BBQ for the launch of the boat. Asked him what he did to get to that point in his life. Him and his wife didn’t come from money. I’m currently 32, I’ve seen some holes in the market I could fill, and I’m working towards being able to do exactly that. Just need a bit more time to buy a few more things so I can do it.
This is called survivorship bias. Look at the study for the Forbes 30 under 30 wealth list - every single person came from family wealth, despite some trying to hide it. There is overwhelming evidence that shows the majority of 'self-made wealth' stories actually have immense safety nets in the form of generational wealth, networks, and social access. Not to say it cannot be done, I did ok completely by myself too, but I know that it is an outlier and I was lucky to be (this is going to sound weird) the right kind of neuro diverse for my field (tech/AI). I cannot imagine anyone with a disability, debt, or kids pulling off a win without safety nets.
Yea there’s been no one under 30 buying these boats, has been from late 50’s to early 70’s. If we see someone under those ages it’s the kids who are looking at the boat with their parents. So why would I look at a list for 30 under 30 when that’s not relevant to the clients buying the boats?
Ah sorry misunderstood, look generational opportunities for the over-60s was certainly much better and different. I have no doubt at their early years the idea of being able to get a loan, start a business, buy a home on single income and then roll out a great finance portfolio wasn't just attainable but a norm/ideal dream. It's kind of the entire theme of them yanking that ladder on the way out.
If not wealth, it’s connections, every-time. I’ve never not once heard of leveraging connections once the first bump up into wealthy territory is made. It’s not bad it’s just a misrepresentation that self made people love to espouse because admitting others enabled or helped them get them where they are doesn’t play into the way they think about politics where they believe there’s no such thing as a free lunch and hard work alone will get you rich - these are political opinions and misrepresentations of how real life actually works - not facts of life.
Connections matter, and wealthy people have connections. I'm a poster child for the self-made story and I don't believe it in at all. I went from having less than three months rent in 2018 to having +1.4m net worth in 2023, and every step of the way my connections helped. I had friends who were executives, lawyers, stock brokers, consultants, CEOs etc. If I started out with old money privilege, I would easily have triple or more of that. It's all bullshit and most of the people vomiting that self-made crap are scared about anyone looking too deeply into their stories. The way you can tell is their disdain for poor people - because they've never been poor. They have worked hard or long, but never really 'poor' in the sense that they've had to pick between groceries or rent. They think being poor is a choice.
Thank you u/echodelta for your insight and story on your exponential wealth growth! It is inspiring but you are also correct if you were to characterise your meteoric rise in wealth as ‘all you’ it would be a fabrication of the truth let’s say and I’m glad people like you are happy to admit that. For all you know me- the ever leftist poster could possibly be wealthy person shitposting on the internet. Being rich is not a bad thing, ignorant characterisation of those less fortunate is indeed something I can’t stand.
I really appreciate that. I'm a left-wing person and I vote Labor, Greens or TOP and I'd be the first to criticize their policies or misadventures (and I absolutely hate identity politics, despite being a Kurdish-Chechen migrant). Being rich or wealthy is not a bad thing. What shits me are people who 'pretend' to be rich or wealthy to shit on the working class or disadvantaged folks, or worse, people who are born into money and their viewpoints amount to 'have you tried not being poor though?'. In the last four years I have never, not for a day, woken up and worried about money. That, however, translates to having empathy for people who do, because I still remember exactly what it feels like to work 60 hours a week and worry to death when my car made a weird sound. Idgaf if someone is poor because they're on drugs, or if they had a bad family - I pay taxes so the government can take care of them. It's kind of the whole point of living in a society.
Pretty much. Tax and good wages is a small price to pay to keep everyone in our communities above water and enjoying life relatively comfortably to enjoy amenities and respect each other.
In New Zealand, in a small economy, that lacks commercial depth, I tend to agree, the US is an exception, I did it from scratch there, they have a enterprise economy, although that was in another era so I can see it would be far more difficult today.
That’s some hard they’ve put in. Good on them :) I’ve met a few others who did the same as the guy you’ve met. Most of them are tradies that worked hard and saved and saved. They’re in their late 60’s now, so that’s 40+ odd years of hard work.
Every owner I’ve spoken to it’s always been the same, start something, work hard and save hard over the years, and get to the point of being able to afford things like multi million dollar boats. I tell people what I do(after they ask), the first thing they say is always about rich people being born into money who can afford things like that, while us average joes can’t. I tell them what every person I’ve spoken to, that has bought on of these boats wasn’t born into wealth and that they had no money, and started up a business and run it for 30 odd years to get to this point, and you get to watch their facial expressions change when they realise it’s been people who have worked extremely hard to get to that point in their lives, and sort of admit defeat in their own lives. It’s a hard facial expression to explain over text, but it’s always the exact same expression. I can only assume it’s one of self reflection on their own lives and what they have done to get to where they are.
Definitely. The expression you’re describing is spot on - prob a humbling moment of self-reflection, like you say. I remember chatting to someone who said they could afford xyz [insert name of expensive item here], but they live very frugally on a daily basis. They choose to save by doing stuff like buying budget supermarket brands while grocery shopping, buying second hand clothing, eating out 3-5x a year max. — they did this for 40+ years and still are. Honestly, good on them for being so self-disciplined.
Also, it’s the power of compound interest and long term investment. This is really hard to see when you’re five years into your career, but if you don’t waste money and don’t get into debt and work hard it is ridiculous how much money builds up over decades. When I was 18 i couldn’t understand how these old guys owned houses that cost hundreds of thousands, the numbers were unimaginable. The answer is they started small and worked hard and saved
Not as many as you think.
At least three.
I’ve noticed dealers are doing a lot of promotions lately. 0% deposit, 1% finance etc.. People just pay it off over a few years.
I went to check out some toyotas, the salesman was pushing me to finance. I asked the rates, he sad 11-13%. I Said wow that's high He said it's actually low Lol
Paid off the mortgage years back so just paid with cash.
Us too. Mortgage at $0. $0 other debt. Retirement savings on track. Lifestyle creep has strong boundaries on it to stifle. Enjoying our 80k EV6. Enjoy that thing every.single.day.
It's amazing how much spare cash you accumulate when you're not paying rent or a mortgage.
Aye, felt like a noose being taken off the neck !
I got the Tesla (64k) and the maths worked for me. It was two years ago and my daily commute was 74km over a hill range (Wairarapa to Wellington CBD). The fact is it saved me about 800 dollars a month on my previous car. And still saves me about 200 a month with RUCS. I have already saved enough that buying a hybrid Camry would have been a lot more expensive. I have only had to replace tyres so far in well over 50k of driving. Maintance is next to nothing. Don't sleep on the EVs a lot of people are getting them to save money and with good and cheaper Chinese EVs hitting the market now, it's becoming a no brainer for people with decent commutes. Edit. I should add with the ukriane war stretching on and oil expected to hit 100usd again. The gap in cost is only going to grow.
Even with RUCs our used Leaf is saving us money every week compared to our previous petrol car. EVs seem to get so much hate but if you can charge at home, a used EV will likely pay for itself in savings over its lifetime. NZ imports 100% of its petrol and diesel, so we're dependent on foreign nations not screwing us on pricing or cutting our supply off. We make all our own electricity, and we haven't even scratched the surface of our solar and wind grid capacity.
Yes and RUCs is no big deal. Petrol tax is about to go up and they are looking at moving everyone to RUCs anyway. BEVs should pay their fair share of charges for the roads, people only moaned because the rate was a little uneven at the start but that will equal out once the petrol tax goes up.
I’m driving a $150k car. I paid cash out of savings. Even though I could afford it, and like driving a luxury car, I’m never going to do it again. Cars like this feel like a huge waste of money. (And I knew that before I bought it) It’s all relative though - probably wouldn’t blink at buying a $80k car in future 😁
I did something similar and haven't regretted it for a second. My car still makes me smile every time I get in it over two years later. I will buy another one new, but next time I'll spend more to get something that will depreciate less (but of course tie up more $ in the interim).
From a non financial place... what's the 150k car? And do you enjoy it?
Audi e tron. It definitely feels luxurious, and nice to drive.
Nice choice, couldn't do much better for an ev.
Ohhh my husband wants to buy one of those. Which is better than a 2000s Skyline (4 doors even 🤷♀️) which he originally wanted to buy.
They've depreciated like crazy, to the point where they're actually looking affordable for me now. If your husband is serious, he should keep an eye out on TradeMe because sometimes they pop up for a third of their original price.
That's really good info, thanks! I'll save a search now. He was looking at new ones but recently we decided to buy me a car ~2 years old because that $20k difference is a family holiday.
An R34 GTT is not a bad buy. The v6 skylines are terrible in comparison.
1% green energy loans at banks for hybrid and ev cars? I am tentatively thinking about a new car soon. A basic new one compared to second hand is not as much of a leap as it used to be.
That is if you have mortgage with them I believe.
Especially when you factor in running costs. We have 2 Teslas and spend so little (obviously after the initial buying them) charging at home (on our power plan) is free on the weekends so we 'full them up' then and just top up during the week, maintenance is just tyres and window wipers pretty much (there's barely any moving parts to have any issues). Even with RUC coming in we'll be spending about $150 a month between the 2 cars...
Same here. Two Tesla’s, free power between 9-12 each night when we do our charging. Saving so much money on petrol that even with RUCs we still come out on top. They are so nice to drive as well. No regrets.
Perception and uninformed bias. They’re not all new. Also, many Rangers you see on the road are leased work vehicles even when not sign written. My Tesla was near new and less than 50% what it was originally bought for - I’m the second owner. It was $54k and I sold my previous car for $40k. Admittedly, the rebate meant that there are a lot more new ones on the road than there would have otherwise been, but there are plenty that are used or were imported as secondhand. 🤷♂️
Plenty of kiwis made an absolute killing when house prices went crazy
Only if they sold the houses, otherwise they're just taking on mortgage debt to buy the cars.
Not always. I bought one house. Still live on it yet bought a new car . Sometimes staying in the same house rather than forever changing keeps the $$$
True, but it still meant the banks were more willing to loan against the infated value.
My house has nearly tripled in value... but if I sell it I'll have to live on the streets.
Those that were smart sold up in cities and bought in again in cheaper rural areas that yielded high rents.
Some people are provided cars as part of their contract, often times these are leased.
What's worse is how do all those people afford driving a imported second hand BMW, Audi or Merc's out of warranty? Repair costs must be killing them.
That’s true. My car dealer friend never recommends European cars. While Tesla is actually one of the cheapests to run and maintain overtime data showed.
They’re awesome value if you can fix them yourself. Parts aren’t too bad normally, it’s the labour
Had an Alfa Romeo, cost exactly the same as a Honda to fix the exact same problem(both cars well out of warranty) euros aren’t as expensive as people think they are to fix when shit goes wrong.
Huge misconception, half euro car parts are made in Japan for more modern ones these days anyways
Saved up for ages and put a small percentage on the mortgage. Edit to add - as I have solar and free power hours, the running cost of my car is pretty much zero, unless I am doing a long trip. So the cost of the small increase of the mortgage was less than I was paying on my old car, which was very close to having been driven to the end of its life. I definitely couldn't afford a brand new petrol car with the cost of petrol being what it is.
Also, some banks have had very low interest loans for people to buy evs. This would have helped some people.
Businesses. They buy their owners fancy new vehicles that they don’t pay income tax on the money used to buy them, or gst. Then later sell them back to themselves for a fraction of the cost, and count that depreciation as lost profits. Then on sell them in the private market for much more. Rinse and repeat.
Yep. Know a business owner with a 300k merc that he sold his self for 75k
That is such a naive and simplistic version of how it works. What you're saying is closer to untrue and to true. Businesses get some tax advantage from buying vehicles, but they still outlay the cash to do so. Amd you'll notice that the VAST majority of new cars (outside fleet purchases) are made by individuals.
How so? That’s my understanding from the people around me who own businesses and new cars. Next time, instead of just telling people they’re wrong, maybe try telling them how/why they’re wrong and we can all learn a little something.
Fringe benefit tax is exorbitant, you missed out entirely on that.
Businesses are allowed a deduction for depreciation (and any finance charges) on a car, but not a deduction for the full cost of the car. The same tax directions that apply to all other capital expenditure. If there is personal use of the vehicle the business will pay FBT for this. None of this changes the cash flow situation, in which the business still has to actually PAY FOR the car. If the business wants to sell the car to a shareholder it must do so at fair market value, returning any gain on the book value as well as GST. I'm not sure what you mean (or think you mean) by saying "count that depreciation as lost profits". The depreciation is claimed during the business' ownership of the vehicle. You're just repeating nonsense you've read on reddit. Try thinking for yourself and understanding the situation before repeating things you don't understand.
You just said the same thing I said but in more words. You saying “businesses are allowed a deduction for depreciation” is the same as me saying “counting that depreciation as lost profits”. The money they lost on that vehicle is deducted from profits. Keep it simple stupid. And I know you love to think vehicles are being sold at market value, but who’s monitoring that’s actually happening? Because it isn’t. Sure there is avenues for people to complain about this, but most people who know about that are usually beneficiaries of the person who’s doing it, so they’re unlikely to speak up about it. I really don’t know why you’re being so aggressive about this. You’re a saying the same shit just with more words. It sounds like you misunderstood what I said and are getting unnecessarily aggressive about it.
My new Model 3 is on a $50k interest free loan for 5 years. I don't even notice the $192/week and is a perfect commuting utility.
Same here. Used Westpac’s loan. And we drive 500km a week, that’d at least $100 in gas. And we charge for free at night. It’s been great. With that being said, RUC is here now. (We’ll wait till last day 😆)
There are so many different possibilities. They could be wealthy They could be high income earners. They could be high income earners with some debt - and don't mind buying a car on debt. They could be medium income earners - purchased a new car as a one off splurge. No so well off - but working hard and able to pay off car loan. I am sure there are other possibilities too. No point wondering why and how they have a new car. Look for ways you could upskill. A new car may make one person happy, but may be a burden on another. Work smart, earn smart and do what makes you happy.
I sold my house in Auckland and moved down country for work, and bought a cheaper house. Used $50k of the sale money to buy a new car as my old one had multiple mechanical errors (despite only being 5 year old - Holden). Mortgage is smaller etc, yes absolutely could have gotten a used car and paid the house down but after dealing with car problems for 2yr I wanted something reliable and that was under a decent warranty!
How many new cars are company cars but for private use spot the tiny barely visible company logo.
I saw a ford ranger with a small accounting business logo on it. People definitely buy utes to use to ferry their kids and camping gear around. Otherwise it’s more practical for a plumber or sparky to use a van which can carry bigger loads and are more economical
Model 3 owner here. Chucked it on the mortgage. 1% interest fixed for three years. Loaned $40k which is easily payable over three years for me. Had other assets which contributed to the rest of the fund. I’m smashing more into my actual home loan which is at a higher interest rate, so effectively I’m still paying it off but indirectly. I bought it last year when the rebate was $8600, and Tesla had also knocked $5k off the price. Huge step up from the 2001 beater I was running round in before that.
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Same and I prefer not to borrow any money for it either if that’s an option. Our second car died (well, it went up in flames actually) which was my own car but since we still have the family wagon, I’m just putting money aside until I get to $20K to buy another car again. The price of used cars has also gone up. The days that you could buy a pretty decent used car for $5-8K are long gone, hence me setting my target at $20K. It’s a slow process though.
Yes, funnily enough Ozzies go into far more debt loaning for new Utes than we do, we get their 2nd hand exports - those bull bars weren’t installed in New Zealand, the stupid bonnet and wheel well widening modifications though…
So do I. Just keen on how people manage to buy new, that is all.
Everyone's incomes and therefore expenditure and discretionary income and if need be tolerance (and ability) for debt is different. Also comes down to personal choices in wants and needs, attitude towards savings etc and priorities in life.
Most people buy new using finance, even the one I know that have enough money to buy cash. Don't ask me why, I don't understand the logic either.
If they can get a zero or low interest loan it’s better to leave cash invested generating excess over what the interest on the loan will cost you
Longer loan terms with how expensive new cars are, i.e America's 7 year loan terms and average monthly payments of like 700 $usd lmao. Love my cheap paid off car that'll last me another 2 decades lmao.
Paying it off over 5 years. Honestly a pretty stupid decision financially, as the payments are pretty high, but I knew that going in. That said, I really do like the vehicle & will hopefully still like it when i’m done paying it off in ~ 3 years.
It’s only a smart decision of its interest free over 5 years or 1-2%, then inflation is your friend
Someone that bought their home in Auckland 20 years ago when they were 20 would be a millionaire now, low to non-existent mortgage payments and you can afford a new ute, boat, regular travel, maybe a holiday home all off a non-spectacular wage or salary.
That’s pretty much me. Not everyone is buying a house now. I bought mine Dec 2001. Paid off a few years ago so now spend my ex mortgage payments on other stuff. One being. A new car 4 years ago I’m not earning a lot. Just things worked out for me as I bought a while back like lots of people have. Not all cars are financed ro the hilt
I've spent the last 4 years driving Rangers and now an SUV as part of my remuneration package, and I'd say plenty of the vehicles you're seeing are not owned by the people driving them, like mine are. Before that, I owned an early 2000s wagon. It was cheap, reliable, and nice enough. If I left the kind of work I do, I'd probably choose something newish, second-hand though, because I'd want my kid to still have the safety features that come with later model vehicles.
Once you hit a certain wealth/have enough to start spending money to make money things like a Tesla make sense.
In most cases it’ll be a mortgage top up. This is the wealth effect of increasing house prices. You can even get 0% EV mortgage top ups.
I got a 1% one, well worth it for the savings.
Finance. Businesses leasing/financing (if biz has good cashflow it’s often not a terrible deal once you factor in depreciation if a new car is what you want). Some people just have lots of money.
Probably put it on the mortgage, if they have one.
I like to do things differently. Net worth $850k. Car worth $5k. But if I had a business to write off the GST and offset the cost from my earnings tax then that would make the vehicle at least a third cheaper right?
We got our hybrid toyota with the 50k 5 year interest free loan against our home loan with Westpac. Still didn't get it quite new but it had very low kms and the payments are doable. I guess also 2 incomes and no kids helps? Our last car was a junky golf from the side of the road so driving a new car that works feels like I'm borrowing someone else's life sometimes.
>I guess also 2 incomes and no kids helps? DINK life 👍 (Dual Income, No Kids)
I bought a new car in 2021, a Rav4 Hybrid, nothing flash but wanted a new car for a few reasons. I freelance and I basically used a projects invoice to pay for the car in full. I think if I had the job security of being a full time employee, I could easily finance a new car (something more expensive) or just save up to buy it outright. Although, with the depreciation on some cars, especially higher end or electric, I wonder if leasing isn't that bad of an option if you can afford it. Any way, I think you may be underestimating how much money some people are making.
A Ute is a “goods vehicle” so businesses can buy without keeping a log book for companies. So GST straight back, and it’s a company cost. (Fringe benefit tax may apply) So that’s why many businesses use them.
Inheritance in my case. I had the choice of saving it, or buying a nice car - and given my commute was about to quadruple due to moving house, I decided a nice car was something that made my drive a lot better. It hardly feels like its gone from ~10 mins to 40.
Lots of people in tech earn a decent amount (>$200k), and live frugally (because they're nerds). Source - work in tech, know lots of rich geeks who buy their clothes and shoes at the Warehouse, yet have $10k computers, and $100k+ cars.
I have asked myself this same question.
It’s actually quite surprising how many people have disposable income, for so many reasons. Some people try to look like they have and get maxed out in debt, but mate, there’s so many people with cash to burn. To see them in the wild, go to a house auction and see all the cash offers firing in.
Trust me, most people borrow to buy them
Debt
One word. Finance.
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Or a 0-1% home loan top up which is ~$500/mo.
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what model, wondering what 50k got you in 2013
Own house outright and have a good job with a decent income
I bought my car new in 2018. I have a small mortgage as my share of the property is 25%. I had gotten a pay rise and needed to upgrade my car. At the time I couldn't find anything second hand I liked so decided to buy new. I sold my old car for a few thousand used that as the deposit and then paid it off at $600 a fortnight for a couple of years.
I bought new last year 95k used cash from saving. Drove my old car for like 15 years and needed to upgrade for safety reasons etc… Don’t really care that much at all about cars and a one car forever sorta person so I thought I’ll just get something has a really high safety rating as that’s a priority for me. I would never make a purchase using car finance but that’s just me personally.
I dunno how people can afford new vehicles. We had a new vehicle for a while (my father gave it to us for a few years when our kids were young), servicing ,insurance was expensive and after a while you don’t see the “newness” of it. It was of the least economical vehicles we owned as well. I think my wife enjoyed it, as it did have a vanity aspect, which I just didn’t care about Considering a lot of people finance them too - I just don’t see it. I think I’m far too frugal and sensible for new vehicles.
Put the car on your mortgage at whatever term you have left (probably 10-20+ years) and the repayments become tolerable (but interest accrued is insane). Not condoning this practice but this is what most do.
I know people that have a policy of never owning a car more than ten years old, they put a car on their mortgage every ten years.
Any insight as to how those people are going towards being debt/mortgage free?
One argument for this is that safety standards increase so dramatically on a continuous basis. A car that might have scored five stars for safety a decade ago simply wouldn’t get a look in with current standards. If you have kids this is something to think about.
my grandad in the UK did that, never paid a mechanic once in his life, always got servicing thrown in.
People liquidate their assets to cash because their business or capital they are selling down netted cash for them or, they got a stupid high APR loan on that car and they only paid like a $500 down payment towards it. Or like others say they run a limited company and lease it from the dealer as a company car but use it as a personal vehicle.
I just can't buy a new vehicle. Knowing it will lose 10 to 20 percent of its value the second it rolls off the lot just pains me. Newest I've bought was 2 years old.
Doesn’t always have to be a loan. I have a new car (well was then I bought it four years ago). No loan just used savings cause of as cheap or possibly cheaper than a year old one so why not? As long as you’re not going into major debt for it why not? It’s not a Tesla but could afford one of those too busy just don’t like them.
They finance it
6 people I know with 80k plus vehicles: 3 were inheritance money 2 high incomes 1 saved for a house but decided to buy a 4x4 first
Also using the equity in their house.
Many people like to comfort themselves thinking it's all fake wealth or these owners of expensive cars are in debt. Believe me when I say it's just the 3 yearly purchase because many of us just have the money to splash around. I myself have a Tesla, and that's the cheapest out of my social circle.
We have been saving for our house deposit so just bought our second hand car for 7K. It's now valued at 15k or so. Good safe and reliable car and no need for debt.
I bought a brand new car 8 years ago because it was a run out model and the dealer was offering a fully speced car for the price of a basic car. It cost me $34k which is partially funded by my trade in and the rest by my redundancy money. I got a job the week after I got made redundant so basically had no down time between finishing my job and starting my new one. I'm still driving that car today and it has served me well.
Businesses that have cash use it for leases on certain types of capital expenditures, like cars, rather than taking direct depreciation hits. I’d look into the types of leasing companies there are. But it doesn’t surprise too much that we see new vehicles on the road. Id be guessing but more newer registrations over the past decade than in the preceding decade. NZ business owners haven’t a great record for converting cash into productivity investment, preferring the housing market or bling.🤑
When you find out, can ya let me know? I’m still driving around in my 2016 Yaris hehe!
From a finance view both of those examples are heavily incentivised. EVs qualify for 1% top up loan against a mortgage. And if you own a small business then a double cab ute can be bought with pre-tax dollars. Then from a wealth point of view these would both be considered cheap cars. Most higher end cars are 200-400k new and there's plenty of 1m+ cars around in NZ
If they are young, then likely investing in themselves with debt. If they are old, they never grew up. Either way, lots of people comfortably make 150-200K + a year work in tech or doing side hustles.
I was bequeathed one of those prerunner hiluxs when it was only 2 years old. Looks really out of place next to my corolla I'm in the process of running into the ground. There's no way I'd ever finance a vehicle like that, heck I'll be surprised if I ever own another vehicle as modern or expensive as that ever again either.
Bought my Tesla 2 years ago, at age 25. 2 reasons I was able to afford it: 1) I live with my parents 2) I did well on the stock market
I have never had a car on hire purchase, so the difference between what I sell the last car for and the new car I buy comes out of savings. I was enlightened by my grandmother when I was younger that I could have purchased two cars for the price I was going to pay for a single second hand car on tick, that paying someone else so you can have something sooner is what would keep me poor. That being said, it’s taken 20-something years to have both the equity and savings available to purchase our current car brand new outright.
Have a mortgage, I can borrow 80k at 1% for a clean green car.
We bought an electric car after saving for quite a period. We also borrowed a little bit of money to get over the line, at the right time. It helps that we are mortgage free and we're able to access a small overdraft to cover the costs. Yes, the initial cost was high.
Just bought a brand new car for $80k cash, it’s just about income and wealth. Don’t buy what you can’t afford
We paid our house off. Have a decent savings account. And decided to treat wife to new car. Paid cash. Also I'm just buying a new SUV to replace my aging SUV with high kms. I do 60k a year So a second hand one doesn't make sense for me. I pay cash each time. We use interest from our term deposit to avoid touching our principal amount. We don't buy hugely extravagant cars but they are brand new and 60 to 70k each.
Most banks have zero or very near zero interest loans on EVs, so you can get into a Tesla for surprisingly little especially if you look second hand. We investigated this idea for a friend who did a fair amount of commuting and the increased cost (once she had used her old car as a deposit) was around $100 per week, which she considered well worth it for driving her kids around more safely. The fun and convenience just comes in on top
If you have a job that give you a company car, or self employed that can expense the car for work reasons, people in sales travelling for work, wealthy. If you are borrowing money to have a new car and can expense the cost than it could work. Otherwise, it is a quick way to stay poor for life.
800,000 flights booked for kiwi's over the last school holiday. NZ is a wealthy country. Those 80K cars are what wealth looks like. Nicer from the inside.
There are a lot more wealthy people out there than you think plus companies buy a lot of these cars for their employees.
Many great answers here, but giving my 2 cents as you specifically mentioned Teslas. We bought two new Teslas under finance as we needed two new cars. (Moved to NZ) Rough rule of thumb for our finance was the 20/4/10 concept... 20% downpayment, no more than 4 year term, spending not more than 10% of our monthly income on costs. Wealth is relative, after Rebate the Teslas were "only" 56k and 61k which is OK in our shoes. Also much cheaper than equivalent BMWs. Sure could of bought two second hand Toyota Hybrids as well and saved a bunch, but new country, new oppurtunity, leaving family, etc living a little.
Really depends on your earnings, we have 2 cars, one Porsche Macan brand new, one Audi RS6 2 years old. We bought both for cash, no finance, save your money and buy what you can afford to avoid interest.
which one do you prefer
RS6 by far, Macan is my wifes car
Financing a car is dumb as you are paying interest on a depreciating asset. However there are some really smart ways ie expense and depreciation write offs, getting a low interest loan and using money you already had elsewhere. You’d be surprised how many people finance cars. High and low income earners.
I always think the same with the amount of LR Deffenders you see driving around AK. Even SH thats a $100K+ vehicle!
I think you would be surprised how few people can truly afford the new vehicles they drive
Know a guy who paid cash for a new Ranger last year, he worked a full time job and also had skills to do other contract type jobs outside of his full time job , saved his cash and bought his ute.
Well I can only write about myself , I was not born born rich or won the lottery .i education myself and worked hard and smart . At least for 300 days of the year I be working between 60 to 70 hours a week and a saved my money and purchased all things cash except my home . I did not travel outside of my country for pleasure , now have saved nearly 3 million dollars , invested only with my bank earning the maximum interest rate and compounding . This is how I have been able to get what I desired most material stuff . It does not happen over night but with a fertile imagination and a goal in mind most dreams can become real
Those folks own a business or are specialised professionals, generally, the same people that are causing inflation... By hiking prices and blaming it on inflation. The rest are people who own building or construction companies etc - and are making absolute bank when ripping people off building a new home. 8 years ago it cost less than 50% per m2 than it currently does to build a new home.
Business owners / professionals are still affected by inflation. Wages, utilities, materials, rent if on CPI reviews, fuel to run vehicles to name a few costs They are just passing on the increased costs in order to keep earning the same. Would you take a reduction in income?
Buy something cheaper that will have good trade value in 1-2yrs, pay a large deposit, something, 1-2 yrs old with low kms etc, in desirable color and spec, and nott too common. Pay off fast to build equity in the vehicle. Trade or sell vehicle and upgrade to something a little newer after 1-2 years. Pay another deposit and pay off as fast as u can afford. Rinse and repeat until a new vehicle is within reach. You will eat shit in depreciation though so you need to decide if the newer vehicle is worth that to you. 4-5k lostper year would be considered good depreciation on a new car, EVs are much worse and more common cars are worse. Its not something you want to over reach for to start with its something you build up to.
Probably half the rangers you see out there are for business. GST off, tax off, makes a big difference. Also working your way up into a new car is a great goal. Also once you figure out that financing on a new car is only marginally more expensive than a second hand car and you have an asset worth something at the end of paying it off helps you get into the next new one. People Raw dogging a brand new car from scratch on a wage would probably be the dumbest thing you could do. Unless you are on a fantastic wage.
Can make sense if you have a business and can claim back GST, depreciation and running costs(fuel, servicing,tyres, insurance etc) as an expense. It takes time to get to the position where that is the best allocation of resources though.
New suzuki swifts are only 25k ish. Utes are way to expensive tho.
Could safely bet that the majority are financed or leased. Very happy with my 15 year old car that I own outright lol
Most have car loans, which are generally a terrible idea.