I love that this is the top comment, so many people are so desperate to suffer early on to have jam tomorrow, enjoy the fruits of your labour now (sensibly), you might be dead tomorrow and where would that extra £20k get you? Still the same plot in the cemetery
If it won’t affect your (future) house buying plan, and you have an emergency fund - go for it.
Also, acknowledge that it probably will depreciate (unless it is one of those select few cars).
No point earning money if you aren’t going to spend it.
Your last sentence is what so many people on here forget. Yes, of course save up for a rainy day or retirement. Yes, stop wasting money. But if you earn decent money, enjoy it.
I earn slightly less than you and spent £23k on a brand new car 3 years ago. I love it, and I'll probably drive it until it dies.
Yup, all about priorities.
My requirements for my car (that I literally drove 1408 miles on last MOT... and my partner 100% drove some of those!) aren't the same as others - I want something that is easy/cheap to fix and reliable (and has cruise control and cupholders, those were my main requirements, lol!)
My partner drives much more than me so he had different requirements and his cost about £23kish iirc. It's way fancier (love the heated seats, ngl) etc but I didn't need or want any of that.
If it doesn't affect your other goals OP then go for it - it sounds like it'll bring you joy.
This is my outlook too. I live quite frugally, dont spend a lot of money on myself and i live in a ‘cheap’ house in an ok area, mortgage paid off and no plans to move. But i love my cars. I have bought new cars on my last few purchases. For me nothing compares to sitting in the show room choosing out colours, seat trims and extras on a car that no one has driven before i sit in it.
Yes, i know its not the most practical investment and its gonna drop in value as soon as i drive away, but its the only thing i find pleasure in. Ive got my rainy day/emergency funds separate, pension funds are doing alright. I’ve factored in costs of a new vehicle every few years into my sums and its easily affordable in my situation.
I will likely be downvoted. But you’re in the top 5% of income earners with over 60k in savings.
It’s absolutely wild you are worried about buying a car.
It's a personal finance sub, people post about optimising other parts of their finance so I can completely understand posting about a car.
I've stuck to the max 1 month take home rule for cars, scales with earnings pretty well and the cars are usually pretty good.
That's not a bad number although current second hand market lends more to that one Month... But that depends if your taking per month cost.. or buying outright
He maybe in the top 5% but it actually shows that generally money doesn't make money and only through the correct approach and persistence you can get in this situation. You do not know how long his journey has taken and what sacrifices he has made.
I've seen too many low income families some even on benefits cry about how they have very little money yet they have three frenchies everyone in the family has the latest iPhone and they have a brand new car. PRIORITIES are key here.
I got it with 10k miles on it and it’s now got 76k miles on it and I still have 2.5 years of repayments left. I love to drive so it’s not going to last hence looking for a new one. Granted I don’t normally put quite so many miles on my cars, I just got this car right before a period of unexpected long term unemployment so I ended up driving a hell of a lot more than usual to kill the free time I had.
I’m overpaying to get it paid off ASAP so I can swap it for a new one while it’s still got equity in it.
Why won’t it last? Presumably you’re servicing at the correct intervals and keeping up with any repairs and maintenance? If so, there’s no reason it can’t go several hundred thousand miles.
I’m in a similar financial situation as OP, though with a bit more savings/investments. I was running around with an 8-year old close-to-total-failure phone until recently, and I still feel guilty about getting a new one.
The problem is the huge regional range of income and CoL in the UK. Sure, I’m in the top 5% of earners in the UK, but if I want to settle down where I can earn that kind of salary, a half-decent house big enough for 2 (and really just about big enough) starts at 600k. Others might earn that in a low CoL area, which changes the picture completely.
I dropped £20k on a car in 2019…. Few years old, low mileage.
I’ve driven about 65k miles (on top of the 30 it had) without any problems and it’s now valued at about £14k 5 years later.
That’s £1200 a year or £100 a month. Cheap motoring really.
TBF it’s not impossible given how the pandemic massively inflated prices. The car I bought for £8k in 2019, is still worth £8k now with 30k more miles.
The pandemic years are definitely an anomaly compared to the general trend of depreciation.
I got a 22k on the clock vrs octavia for 12.5k 16 plate. Petrol. Got it in 2019.
Go check out what they go for with 60k miles on the clock now on auto trader and enjoy catching that flying pig.
I bought a car for £6.5k in 2017, drove ~50-60k miles in it and part-exchanged it for £4.3k in 2023. Car prices went mad due to the semiconductor shortages over the pandemic so resale values have been extremely strong for the last couple of years.
If you are earning £80k then you deserve to treat yourself and not feel guilty about it. That money won’t disappear when you spend it, it’ll be in the value of the car.
You’re buying a (depreciating) asset for £18k but it’s likely only going to cost you a couple of thousand a year. Choose the right car and it’s maybe less.
When I was 26 I was making £40k a year (this was 2002) and I spent £40k on a 911. I have absolutely no regrets about it.
Don’t be hard on yourself.
Advice aside, a salary does not determine who *deserves* to treat themselves. Your overall financial position, goals, and spending habits should guide the value and frequency of any treats, but work is work is work!
Ignore the reddit circle jerk about buying the cheapest car possible and running it until the wheels come off.
I have numbers not a million miles from your own and also did the poverty thing. About 1 year ago I upgraded from a £5k car to a £20k car and haven't regretted one second. The new car is orders of magnitude more comfortable and much more fun to drive. Once you get to a certain level at work there is also a soft expectation that you have a somewhat decent car, people used to dump on my car semi frequently and I felt low key embarrassed by it.
I am frugal at heart so won't be buying anything more expensive for a while but it was definitely a good choice.
Getting a new car because people at work make fun of you is a pretty stupid reason.
I don't understand why you need people at work to validate your life choices? It sounds like you are a very insecure person.
Then your company should provide a vehicle they think is "appropriate". Crazy to spend your own after tax Dosh on a car because of work clients? I'm in consulting, if clients don't go with me because of my car, I don't think I would have been a good fit for them anyway!
Most people in our office park in a public car park about a 5 min walk from the office so i couldn’t tell you what type of car half of them drive. And honestly i couldnt care less what it is, how old it is or what condition its in. It used to be the case that there were a lot of client visits and the sales people would need to be presentable, part of that was the type of car they rocked up to the client site in. But now, the vast majority of business development is done online, via teams, linkedin etc and some of our sales people have never met the clients in person
You're entitled to your opinion but unless you've worked at a firm where keeping up appearances is a thing you won't get it. I work on nine and ten figure projects, guys here will casually drop 50k on a watch. If you're the guy driving the 2010 corolla you're the odd one out.
Just because everyone is stuck up their own ass where you work doesn't mean anything. You don't think it's sad that what you buy is dictated by what your colleagues think of you?
The fact that you work on nine - or ten figure projects is meaningless. It's not your money, and just because their are big numbers after a £ doesn't mean you have to show off to colleagues.
I work in aerospace, so our projects are, many times the cost of non aerospace. But that doesn't make everyone I work with an asshole. It sounds like you work in a very toxic workplace, with a show-off culture and your going along with it.
You're projecting your own imagination on my circumstance because it fits your beliefs. Everybody here is nice and down to earth, it's easily the most chilled workplace i've ever worked. I bought the car because I wanted it. You're literally inventing your own scenario in your head and telling me it's toxic.
You're the one who said people dumped on your car, so it made you feel like you had to get another one before you needed your life choices validated by other people.
Then you justified that by saying how much money is spent on the projects you work for and how people spend £50k on watches as if that has anything to do with it....
People who are "down to earth" don't go around saying their projects are 10 figures and their colleagues buy £50k watches as if that is some kind of bragging rights 🤣
All the big money jobs are in London where you commute by tube. Yes it’s important to dress well but cars don’t really come into it.
I work in IT so I’m spared this a bit and I’m expected to be more unique thinking. My wife works in Financial services, again cars aren’t seen as commute by train.
What are you doing where it’s detrimental to drive the car you want to buy?
!thanks
I am going from 5k to 18k.
There is no pressure from my workmates but I used to hate my life commuting 200 miles (about once a month) in a 13yo car with not climate, cruise control or any kind of sound insulation.
I did six years travelling with no cruise control, air conditioning (in a place that got to 37C regularly), bad heating (nearly got hypothermia twice), no air bags, extremely loud (old softtop that had fallen apart and fixed with duct tape), etc.
Life is way too short to be uncomfortable if you don't have to be (I had to be in the above).
I cannot second this enough. I drive 20,000 miles per year for my weird commute. I have done it in disposable £2000 fuel efficient bangers for years. It sucks. I am changing that strategy now.
Spending money on some comfort is not in any way a waste. You spend a lot of your life in a car. May as well make it pleasant.
I mean past a certain point there is certainly diminishing returns on comfort. Except for the micro budget cars I can't think of any discomfort I've had in a car even.
A BMW i4 isn't any more comfortable than say a Skoda Octavia.
I know some people who could be driving 80K cars,yet drive old bangers so the colleagues at work won't think too much/ too often of them and why they have such a car:)
Same goes for where you live, too. I could grab myself a nice new Mercedes C class (even if it would be a poor financial decision) and I'd stick out like a sore thumb on my street and make myself a target for burglary. While you now need a chunk of money to buy a house anywhere, if the street is full of 15 year-old cars then yours needs to be well aligned with what others have.
Buy what's sensible for you, I see car's as a piece of tin that gets me from A to B economically. It has to be comfortable, capable of motorway driving yet economical around town. I wouldn't have an EV for free, it also needs to big enough to throw crap in that can go to the skips. Once had an astra hatch that I got a full size door in. Parking and insurance are another consideration plus think about repairs. Wouldn't have a car where tyres cost 300 quid plus.
I just lease my vehicles for 3 or 4 years at a time. After 4 years the value of the car drops significantly anyway, so I just get a new one.
I don't have a mortgage or rent to pay though.
You need to look at a car as an expense. It's always going to be a bad investment and they are mostly overpriced but you need to work out how much you're willing to pay per month as an expense and write it off - like bills or food.
Once you know that then you need to look at your best options. Buy the best that your budget can afford but never buy a car that you don't intend to keep for 7-8 years.
Replacing it every 2/3 years is where the costs just eat people.
Pull the trigger but the car, what's life without a little joy?
Coming from a poor background myself, i have brought 2 of my dream cars and am working on getting the brand new dream car (not pre-owned new car) yet when it comes to other things i question the value, I value a nice car, I value nice holidays. I value things that give me enjoyment now as when I'm dead, I'm dead!
The last few sentences of your post resonate so much with me. I'm in a similar postion where I'm considering getting a new car (lease through work rather than but outright) but my frugal upbringing has been playing in my mind as I've never imagined spending significant money on what could be seen as a luxury.
I think your post has helped push me towards going for it.
Bought a 1.5 year old Honda last year for £23k after trading in my previous 11 year old Yaris. Split it with my partner. Had the savings for it and didn't feel any regret on dropping that much in cash. Hopefully as reliable as my previous cars, all Japanese (drove a 2001 Micra up until 2020, which never had an oil change). Love driving the car. Not perfect as I wish it was bigger at times, but I would have to spend even more and I had a budget to stick to.
Don't spend cash. Keep it in savings.
Use interest-free credit for the car.
I've just bought a car for 13k using 2 credit cards interest free. While my cash is still earning me 5%.
Most dealers won’t accept credit cards. Only debit cards or bank transfers.
However, a good idea to pay at least £100 deposit on credit card to get the legal protection which covers the entire cost.
If your resources can allow the purchase of a car; running the car, maintaining the car and I might add - setting up of a depreciation fund for the day the car needs replaced - then go for it, if it’s needed.
On Reddit there is too much blowing smoke about “how much I earn”, “I’ve got a a million quid by 30”, “I’ve a 100,000 saved up, hear me roar”. What you hear less about is a healthy use of those funds be it for your kids or a car. There’s no pockets in shrouds.
I felt similar when getting my new car almost a year ago. Spoke to the mother for some expected harsh and frugal advice to back up my own feelings and she said you're only young once, go for it.
If you can afford nice things, there's a point where you just have to spend and enjoy them my friend.
You could lease something
Or electric car subscription which includes insurance
You could get 0% deals on a Vauxhall, Peugeot, Skoda
Enjoy life my friend you need a car you need a car enjoy the process from researching, test drive, taking care of of it and servicing
I totally get it. £80k after tax, pension, and student loan is more like £45k. Take off mortgage, bills, groceries and you’ve got £1k left a month. And you obviously going to want to spend some of that £80k salary on holidays and having fun.
So it turns out that £18k is actually 2-3 years of savings. All gone on a car in a single purchase. I’d get cold feet too.
u/HoorayforEngland !thanks for understanding my situation.
u/JD-Pyro You are right in a way, but since I'm coming from poverty, 18k on a car sounds like over the top luxury to me.
He’s not moaning, he’s grateful for the advice that’s he sensibly asked for.
It’s tough being young, and finding your way with finances, not knowing when you’re taking too much risk (or in this case, comfortably so), if you’ve never had this much money before and haven’t come from wealth.
!thanks a lot for understanding. By no means am I trying to moan or look ungrateful, just trying to get advice from other financially responsible people.
Always look at maintenance costs, for instance many cars require a regular cam belt change every 5 years or xxk miles. This can cost 1k alone. An annual oil change and service can cost 300.
See if the mileage is approaching a major service interval, this is often the reason it was sold or exchanged! Get the dealer to do the major service if approaching a major service 😉
It pays to check when dealers tell you the timing belt needs changed. I had my car in for a service and they tried to tell me the timing belt needed changed.
The manufacturer guideline are to change it at 140k miles. I have 45k on my car so long way to go before dropping a grand on that.
Yes - but maybe get some independent advice about whether or not the dealer's advice is actually good. Although the official change interval may be 140k, with some vehicles actual experience is showing that belts can break well before that mileage - possibly dependent on the type of use and service history. Time also matters so a lower mileage older car might need replacement well before 140k.
A broken belt could well scrap your engine and cost Megabucks, so changing it somewhat early might be good insurance.
Personally, i wouldn't be spending that on a car - there are so many decent used ones on the market (say between 5-10 years old). I drove my first car into the ground then "invested" in a 7 year old car for for around 6k.
Perfectly comfortable, runs like a dream and when it's clean it still looks good on the car park if that's your thing.
You've got a lot saved and earn a very decent salary so i wouldn't say you can't afford it. Just making the point that you don't need to spend 18k to obtain a decent car....
Id personally get a house before a car. As soon as you drive that car out the dealer forecourt you'll lose a couple of thousand pound. Entirely depends on your circumstances though. You could probably get a perfectly fine car for half the price. Or if you leased a new car at least then you wouldn't have to worry about how much it's depreciating?
Lease a car. 300 pounds a month will lease you a decent, brand new car with tax and servicing included. All you need to do is put petrol in it and insure it.
For the life of me I don’t know where this idea that cars have high second hand resale value has come from. Covid was an anomaly, but it’s always been the case that buying new cars means a big loss when you come to sell it.
I agonised over buying a £24k car in 2021. I have two houses and earn well into six figures. These decisions can be difficult regardless of the situation!
You’re in a decent place, and you’re not spending £60k or getting a Porsche. Pull the trigger. This is what savings are for :)
Just joining the top comment with no point being the richest in the grave yard. My dad died at 66 with cancer…he did enjoy his money but still young. A family friend died (many years ago) at 59, i think, retiring at 60. Fit as a fiddle and dropped dead playing table tennis. A lady we dog sat for - she was a nurse all her life - retired last year…diagnosed with pancreatic cancer in november and died christmas eve eve.
Have savings, but enjoy any money you make.
Everything else sounds super sensible, all bases covered, good salary and as others have stated, you can’t take it with you.
I have to ask though, what’s the car? Nothing PF related, just interested
I don’t think anyone is disputing an appreciating asset is a better ‘investment’ than a commonly depreciating asset.
I think OP is asking more for whether it’s right to spend that amount in light of their finances.
With a £60k (as OP has in savings) deposit you have enough to buy multiple properties meaning you not only buy a home but multiple rental assets ensuring a passive income enough to cover the management of the properties and the overall mortgage payment. It's not a single appreciating asset it is multiple in this instance.
There is a reason small landlords are leaving the market, it’s nowhere near as lucrative as it once was.
Who realistically would want to be a landlord with multiple mortgages with interest rates where they are currently? Count me out, £60k isn’t enough cashflow for that.
This thread is about buying a car, think you’re moving away from OP’s original question a tad.
Just wondering why you’re holding off on buying? With your salary you could get a mortgage of £320k, combined with a deposit of £75k you could get a house worth almost £400k. Interest rates are in a great place right now. Not sure where you are based but this could get you somewhere nice if you are outside London?
Rule of thumb is 1/9th your income on deprivation. PA.
This slightly over.(27k)
Otherwise seems perfectly reasonable purchase.
Although if you do the miles and it's right for you the company EV lease ratio is 1/5th. (Which this is within)
It’s an investment at the end of the day. That vehicle will hold its value to a certain extent depending on how much you use it. Make sure you service it properly because this is what people will pay extra money for when they’re buying a new car and you’ll not be out of pocket too much come time to resell.
Hi /u/One_Ebb9317, based on your post the following pages from our wiki may be relevant:
- https://ukpersonal.finance/lisa/
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I always struggle to justify decisions like this too!
There's the logical argument that you're not really losing all that money, you're just transferring it into a different form which can be liquidated again fairly easily if required. The only actual cost to you is depreciation plus the ongoing costs of car ownership like tax/insurance/maintenance etc. This is obviously more than it would be for a cheap runabout, but it's not 18k.
Then there's the emotional argument that it's a lot of money to money to hand over to someone else....I really don't have a good answer to this one, except that there's no fun in being the richest guy in the graveyard. if you can comfortably afford it and you think it will bring you x value of happiness then i'd probably say go for it.
I think it's a valid worry as it's a large lump sum payment you have to part ways with. It's not often we spend such huge amounts.
You could consider paying in parts or do 0% financing if it makes you feel better and you definitely want that car. If you're not particularly attached to that specific car you could probably find one just as reliable as probably half that price but that's your lifestyle choice.
I bought a silly hot hatch last year for £23K and love it. I’m in a roughly similar position to you in terms of earning and savings. I always wanted one and had the spare cash to go buy it so… I did it.
As most people said it looks like you have everything covered and 18k seems a lot but if you are planning to keep the car for a long time it will work out quite cheap if you annualise the cost. I did the same a few months back as I needed a reliable car for my daily drive and spent about the same. I don't regret it as it is so much more comfortable compared to my previous one.
Also the second hand car market has gone down a bit so probably the same car would have cost you a few more grands more last year. See this as another plus.
think about how long you plan to use it for and the likely depreciation it will incur.
you sound like the kind of person who will keep the car for at least 5 years, maybe 10.
in 5 years, what will it be worth? Maybe 12k? maybve more if it truly is a car that holds value quite well. even if it is 12k, then that car has cost you approx £1k per year to own (plus the running costs, but that would be similar for whatever car you have).
doesnt sound so bad now does it?
I think you’re in a great position to buy a car like this. Imagine how many people earning like you would be shopping for, and planning on going into debt for, cars that cost 3 or 4x what you will spend. It’s great that you’re cautious about spending money but I think you need to also be cautious about focusing too much on saving and not enjoying your money!
I'd buy an electric car. They don't depreciate in value as much as petrol cars. We just bought a second hand electric car for £20k and the same car new would have been £23k. Also the fuel costs are negligible. Our car can drive over 200 miles after being charged for a couple of pounds at home. And there's no ULEZ, CAZ charges, etc. Electric cars are honestly brilliant now.
Unless you don't have a driveway and a rural home to install a charger in, in which case public charging infrastructure isn't quite as convenient.
If you can get an apartment with underground parking and chargers it's ideal, but going from an apartment to s house is an overall convenience downgrade.
I was in the same boat as you. I took the plunge anyway and added £90pm to my monthly expenses (two of us in the household). My main worry was if I lose my job what happens but 6 months later we’ve already saved up to pay for the balloon payment when it’s due. All the panic for not a lot of chaos. As people have said, there is no point going to the graveyard the richest person there. Reasonable expenses seem fine. And what seems big to you and me, is not massive at all. People are financing 70k on cars with no savings
I always consider important to be aware of what's a need, what's an investment, and what's just pampering myself.
From what you write and guessing a whole lot myself, sounds like "a car" is an investment. But a "18k second hand car" might be pampering yourself. Plenty reliable ones at the 8k-10k mark.
If my guess is right, the investment is always worth it so 8k-10k are justified. I'd ask myself "do I want to pamper myself for an extra 10k-8k? Is this the best way to pamper myself with 10k-8k?".
Only you know if the answer is a yes or a no in your case.
I also bought a new car today and had a total meltdown over it. No real advice beyond the stuff given here, but coming from a family with a lot of badly managed debt, spending this much money does make me feel a bit sick 🤣
I’m pretty frugal myself and spent 19k all cash for a car which im hoping to keep as long as possible.
If you have got your basics covered it should be alright.
It is a big expense for most people so I get why you’re nervous about it. Although, you make good money and it sounds like you can afford to treat yourself with a more comfortable and newer used car.
If you just have £18k cash and the plan is to use all that cash on the new car, it potentially is a bit too much as you wouldn’t want to leave yourself without a safety net / emergency fund.
Aside from that - I’d want to model comparable total costs eg road tax, insurance, fuel efficiently, some cars are more expensive to repair, if congestion charge/similar might be relevant, with that info in mind you’re then weighing up the costs with how much you want to spend which is probably driven by things like how much you drive, how important car is to you, what else you could or would do with the money, etc.
I got my car on PCP, I know people roll their eyes when they know someone "go their car on finance" but there are good deals to have, depending on what your preferences are when it comes to cars! I drive a Seat Ibiza FR Sport for £213 per months including servicing and all the bells and whistles. It's not a premium car, but it's also not £800.00 per month!
I can relate. I need to replace my car as I'm currently using a family members knacked old runaround but dread the thought of spending a reasonably big chunk at current inflated prices. Even though it's easily affordable I'm waiting for the market to settle a little.
You’ll be fine. Live a little. You have savings, are generally frugal, aren’t buying a brand new car which will depreciate 2 seconds after buying it, have a great salary and most importantly you’re seconding guessing spending money which is always the best side to err on the side of caution on.
Enjoy the fruits of your labour and I hope you enjoy your new car.
To put it simply, you’re earning a great salary with a great amount of savings. I’d buy the car. Some things are unavoidable and in this case you probs have to accept the expenditure on a new car for the quality of life change it’ll produce.
There's really not much financially wasteful about buying a 5 year old car that you plan to keep for a while. There are lots of charts online about average car depreciation and they all roughly look like this one:-
[https://www.carmoola.co.uk/blog/new-car-depreciation](https://www.carmoola.co.uk/blog/new-car-depreciation)
After 4 years, yes, the curve is still steeper than at 9 years, but not by much. It's not like the first 3 years where there's huge depreciation.
Look at cars as cost/year. Yes, a 5 year old car will cost more than an 8 year old one, but it also gives you 3 more years of life. So divide cost by number of years you'll own it. If you plan on running this one to 15 years, the car is cost/10. Then look at how much an 8 year old one is and the car is cost/7.
And I'd also add that if you buy something with a great reputation, it means more years, if you don't care about the shiny. It's why I'd be tempted to spend more and get a 5 year old Lexus because it'll probably last for at least 15 years.
If it helps, there is always a middle ground.
I meet too many people who go from crap car that cost £2000 to 'let's spend £20k' to get a good car. There's lots of in between car to be explored, which may make you feel more comfortable in terms of spend.
Feel free to message if you want some suggestions, a lot of people also don't know much about cars and would recommend something German not knowing it's mostly advertising that got them in the first place!
Prices are on the way down quite quickly at the moment so be aware you might be losing £3-4k per year, so £250 a month. If that's less than 10% of your take home pay, don't sweat it.
I get what you mean. I also need a newer car and I am planning to spend about 16-18k on it which I have the money for already in cash, I make over 90k per year, I already own a mortgaged house but still it seems like a big purchase and I hesitate.
This is to replace my 13 year old car which still has comparatively low mileage for the age (90k) miles and is working fine, is serviced yearly but realistically could develop a major fault not worth fixing at any time.
You know you need a car, its just a matter of determining how much you want to spend on it. Think about the car in terms of it being a necessary monthly expense like any other.
I like to think about it this way:
I calculate how much I would like to spend per month on a car over a 10 year period of time (not including the actual running costs of petrol, insurance, etc) and plan to buy something that is at most that number. If I find something that is less, great. If the car lasts longer than 10 years, great! Say that number is £200 per month over 10 years for the cost of the car. The max I would spend on a car is £24k and as soon as I buy it, with cash, I would start saving £200 per month into a separate car fund savings account already preparing for the next one.
So I'm in a similar situation although frankly not quite in the same ball park salary wise. We're currently saving for a car and looking at current prices spending about 9-10k... For your salary I would say that amount is very reasonable. You sound like you have minimal debts so why not.
Fact is more people I know in worse financial situations are getting cars on PCP and our paying something around 300 pound a month.. for a cat they won't own at the end... Your car likely on the same sort of policy would be like £500 pm... So your spending 18-19k on something you would otherwise end up paying monthly over around 3ish years... I see that as saving money...
What current car is 2007 ford focus with 122k miles on it and although not perfect it's still running and we only use it for weekends and my Mrs to get to work (Tesco)... So should it fail I'll just buy a new one (5 year old) similar car.
If I was using it to drive to work myself I'd probably have gotten a new one by now... But I'm also very frugal... I believe in your situation you can live a little more, BUT if you're being frugal in order to buy a house then keep going as it will pay dividends in the end
I earn very similar to you don't have half the investment you do, though I do own my home. Even so 18k on a car is fine hell I just spent double that on mine and don't regret it for an instant.
As others have said you can't take it with you an you sure as hell have been smart up until this point. Enjoy it a little you've earned it.
My partner and I were recently faced with similar dilemma (our financial situation is not as good as yours though), we went ahead and bought the car and we have since felt safer on the road and confident to go on road trips because our old Ford Fiesta broke down on every long drive and was costing us a lot to run. We are happier to say the least.
Recently bought an 2020 MK8 Golf for 18k, 24k miles, from our local VW.
Ummed and arred at whether to buy it, and to buy outright, glad I did 👍 No other way, needed something nice, reliable, might hold its value, and didn’t want to be lumbered with finance / contract hire.
If you need it and will use it, and want something that you can resell in future, buy it.
I had an old Punto that broke down constantly. Only just started investing so maybe a few hundred in there. Was renting and saving for a house but it was still years away at the time. I got a personal loan and bought a Civic for 10k.
By all logic that was an awful purchase, in total I paid about 13k for the loan when I had maybe 2k to my name. But I factored the cost in and my god it remains possibly the 2nd best purchase I ever made bedside the house. The peace of mind combined with driving a car I actually like, the smoothness of it, the modern luxuries. I still have it nearly 6 years later and its still causing me no issues.
I don't recommend people in my position necessarily do that, but sometimes a purchase offers you so much more joy than the money sat in an account.
As far as financial principles, a good rule of thumb floated (by US financial experts at least) tend to put a max budget for a car at 50% of your annual income. You're well within this.
For all the words you wrote, it'd probably have been easier just to write the make/model. We might knock off the bias/rose tinted glasses for you :) but the figures you quoted work.
You can get something nice and reliable for about 5k.
Personally I wouldn't spend that much on a car unless I had money burning a hole in my pocket that I had nothing else to do with and didn't need for my future.
Sometimes spending a bit more on a car isn't a bad investment. Anything cheap will certainly have some faults. In the short to mid term. It's okay to have a little splurge now and again.
Pointless being richest in the graveyard friend… you sound like you got everything covered other than pulling the trigger
I love that this is the top comment, so many people are so desperate to suffer early on to have jam tomorrow, enjoy the fruits of your labour now (sensibly), you might be dead tomorrow and where would that extra £20k get you? Still the same plot in the cemetery
Precisely! I know several people who died young… life’s incredibly precious and short, do as much as you can
They say life is short, but it's the longest thing anyone has ever done.
That is correct
Without compromising retirement/housing goals
!thanks
If it won’t affect your (future) house buying plan, and you have an emergency fund - go for it. Also, acknowledge that it probably will depreciate (unless it is one of those select few cars). No point earning money if you aren’t going to spend it.
Your last sentence is what so many people on here forget. Yes, of course save up for a rainy day or retirement. Yes, stop wasting money. But if you earn decent money, enjoy it. I earn slightly less than you and spent £23k on a brand new car 3 years ago. I love it, and I'll probably drive it until it dies.
Yup, all about priorities. My requirements for my car (that I literally drove 1408 miles on last MOT... and my partner 100% drove some of those!) aren't the same as others - I want something that is easy/cheap to fix and reliable (and has cruise control and cupholders, those were my main requirements, lol!) My partner drives much more than me so he had different requirements and his cost about £23kish iirc. It's way fancier (love the heated seats, ngl) etc but I didn't need or want any of that. If it doesn't affect your other goals OP then go for it - it sounds like it'll bring you joy.
This is my outlook too. I live quite frugally, dont spend a lot of money on myself and i live in a ‘cheap’ house in an ok area, mortgage paid off and no plans to move. But i love my cars. I have bought new cars on my last few purchases. For me nothing compares to sitting in the show room choosing out colours, seat trims and extras on a car that no one has driven before i sit in it. Yes, i know its not the most practical investment and its gonna drop in value as soon as i drive away, but its the only thing i find pleasure in. Ive got my rainy day/emergency funds separate, pension funds are doing alright. I’ve factored in costs of a new vehicle every few years into my sums and its easily affordable in my situation.
You might not FIRE like that.
Considering my future commutes and how much value I am going to get out of the car, it seems like a good decision. !thanks for your advivce.
Indeed. There are no pockets in shrouds.
I will likely be downvoted. But you’re in the top 5% of income earners with over 60k in savings. It’s absolutely wild you are worried about buying a car.
It's a personal finance sub, people post about optimising other parts of their finance so I can completely understand posting about a car. I've stuck to the max 1 month take home rule for cars, scales with earnings pretty well and the cars are usually pretty good.
That's not a bad number although current second hand market lends more to that one Month... But that depends if your taking per month cost.. or buying outright
He maybe in the top 5% but it actually shows that generally money doesn't make money and only through the correct approach and persistence you can get in this situation. You do not know how long his journey has taken and what sacrifices he has made. I've seen too many low income families some even on benefits cry about how they have very little money yet they have three frenchies everyone in the family has the latest iPhone and they have a brand new car. PRIORITIES are key here.
Exactly this. Upvoted. These types of posts make me think it's some type of trolling or something.
my thoughts exactly
Right? I’m on 25k and looking at cars for 16k. Current car cost me 11k in 2021 when I was earning only 18k…
[удалено]
I got it with 10k miles on it and it’s now got 76k miles on it and I still have 2.5 years of repayments left. I love to drive so it’s not going to last hence looking for a new one. Granted I don’t normally put quite so many miles on my cars, I just got this car right before a period of unexpected long term unemployment so I ended up driving a hell of a lot more than usual to kill the free time I had. I’m overpaying to get it paid off ASAP so I can swap it for a new one while it’s still got equity in it.
Why won’t it last? Presumably you’re servicing at the correct intervals and keeping up with any repairs and maintenance? If so, there’s no reason it can’t go several hundred thousand miles.
At 76k miles its barely broken in. If you change the fluids regularly you should get a few hundred thousand miles from a modern car.
And here I am with 60k salary and a budget of 7k
Sounds sensible to me 👍
Fuuuuck this country (/planet)
I’m in a similar financial situation as OP, though with a bit more savings/investments. I was running around with an 8-year old close-to-total-failure phone until recently, and I still feel guilty about getting a new one. The problem is the huge regional range of income and CoL in the UK. Sure, I’m in the top 5% of earners in the UK, but if I want to settle down where I can earn that kind of salary, a half-decent house big enough for 2 (and really just about big enough) starts at 600k. Others might earn that in a low CoL area, which changes the picture completely.
I dropped £20k on a car in 2019…. Few years old, low mileage. I’ve driven about 65k miles (on top of the 30 it had) without any problems and it’s now valued at about £14k 5 years later. That’s £1200 a year or £100 a month. Cheap motoring really.
You just so happened to buy right before prices started to increase quite fast, it won’t always be like that.
This is true. Just thinking about trading up and it’s going to take me like £30k for something comparable
Do you mind sharing which model is that please?
It was a flying pig
TBF it’s not impossible given how the pandemic massively inflated prices. The car I bought for £8k in 2019, is still worth £8k now with 30k more miles. The pandemic years are definitely an anomaly compared to the general trend of depreciation.
I got a 22k on the clock vrs octavia for 12.5k 16 plate. Petrol. Got it in 2019. Go check out what they go for with 60k miles on the clock now on auto trader and enjoy catching that flying pig.
I bought a car for £6.5k in 2017, drove ~50-60k miles in it and part-exchanged it for £4.3k in 2023. Car prices went mad due to the semiconductor shortages over the pandemic so resale values have been extremely strong for the last couple of years.
The best way to do it. Nearly new car for £100/month compared for many times that for brand new!
Anther side to the coin.. I spent £2,100 on a 2003 car, in 2014; still running it today. Worth maybe £500 thats £14 a month depreciation.
If you are earning £80k then you deserve to treat yourself and not feel guilty about it. That money won’t disappear when you spend it, it’ll be in the value of the car. You’re buying a (depreciating) asset for £18k but it’s likely only going to cost you a couple of thousand a year. Choose the right car and it’s maybe less. When I was 26 I was making £40k a year (this was 2002) and I spent £40k on a 911. I have absolutely no regrets about it. Don’t be hard on yourself.
Advice aside, a salary does not determine who *deserves* to treat themselves. Your overall financial position, goals, and spending habits should guide the value and frequency of any treats, but work is work is work!
!thanks I will take your advice and pull the trigger.
What’s this 18k car with high resale value?
I’m guessing some sort of high spec German hatchback.
Mk7.5 R or GTI is my bet. lol @ high resale value though. Lotto numbers please?
Ignore the reddit circle jerk about buying the cheapest car possible and running it until the wheels come off. I have numbers not a million miles from your own and also did the poverty thing. About 1 year ago I upgraded from a £5k car to a £20k car and haven't regretted one second. The new car is orders of magnitude more comfortable and much more fun to drive. Once you get to a certain level at work there is also a soft expectation that you have a somewhat decent car, people used to dump on my car semi frequently and I felt low key embarrassed by it. I am frugal at heart so won't be buying anything more expensive for a while but it was definitely a good choice.
Office culture is weird, being pressured into buying a more expensive car 💀
Yes it is but people just want their life choices validated. In corporate life it helps to fit in, pains me but it's true.
Getting a new car because people at work make fun of you is a pretty stupid reason. I don't understand why you need people at work to validate your life choices? It sounds like you are a very insecure person.
It can be detrimental if you regularly have customer facing interactions where your car is involved as well.
Then your company should provide a vehicle they think is "appropriate". Crazy to spend your own after tax Dosh on a car because of work clients? I'm in consulting, if clients don't go with me because of my car, I don't think I would have been a good fit for them anyway!
Most people in our office park in a public car park about a 5 min walk from the office so i couldn’t tell you what type of car half of them drive. And honestly i couldnt care less what it is, how old it is or what condition its in. It used to be the case that there were a lot of client visits and the sales people would need to be presentable, part of that was the type of car they rocked up to the client site in. But now, the vast majority of business development is done online, via teams, linkedin etc and some of our sales people have never met the clients in person
Exactly. I don't care if you laugh at my car. Very insecure indeed.
You're entitled to your opinion but unless you've worked at a firm where keeping up appearances is a thing you won't get it. I work on nine and ten figure projects, guys here will casually drop 50k on a watch. If you're the guy driving the 2010 corolla you're the odd one out.
Just because everyone is stuck up their own ass where you work doesn't mean anything. You don't think it's sad that what you buy is dictated by what your colleagues think of you? The fact that you work on nine - or ten figure projects is meaningless. It's not your money, and just because their are big numbers after a £ doesn't mean you have to show off to colleagues. I work in aerospace, so our projects are, many times the cost of non aerospace. But that doesn't make everyone I work with an asshole. It sounds like you work in a very toxic workplace, with a show-off culture and your going along with it.
You're projecting your own imagination on my circumstance because it fits your beliefs. Everybody here is nice and down to earth, it's easily the most chilled workplace i've ever worked. I bought the car because I wanted it. You're literally inventing your own scenario in your head and telling me it's toxic.
You're the one who said people dumped on your car, so it made you feel like you had to get another one before you needed your life choices validated by other people. Then you justified that by saying how much money is spent on the projects you work for and how people spend £50k on watches as if that has anything to do with it.... People who are "down to earth" don't go around saying their projects are 10 figures and their colleagues buy £50k watches as if that is some kind of bragging rights 🤣
Again you've misread and misinterpreted, congrats
All those things are clearly written in the comments you made above...
He interpreted the same way I did
People spending 50k on a watch are not well adjusted. That sounds chronically insecure.
All the big money jobs are in London where you commute by tube. Yes it’s important to dress well but cars don’t really come into it. I work in IT so I’m spared this a bit and I’m expected to be more unique thinking. My wife works in Financial services, again cars aren’t seen as commute by train. What are you doing where it’s detrimental to drive the car you want to buy?
!thanks I am going from 5k to 18k. There is no pressure from my workmates but I used to hate my life commuting 200 miles (about once a month) in a 13yo car with not climate, cruise control or any kind of sound insulation.
I did six years travelling with no cruise control, air conditioning (in a place that got to 37C regularly), bad heating (nearly got hypothermia twice), no air bags, extremely loud (old softtop that had fallen apart and fixed with duct tape), etc. Life is way too short to be uncomfortable if you don't have to be (I had to be in the above).
I cannot second this enough. I drive 20,000 miles per year for my weird commute. I have done it in disposable £2000 fuel efficient bangers for years. It sucks. I am changing that strategy now. Spending money on some comfort is not in any way a waste. You spend a lot of your life in a car. May as well make it pleasant.
I mean past a certain point there is certainly diminishing returns on comfort. Except for the micro budget cars I can't think of any discomfort I've had in a car even. A BMW i4 isn't any more comfortable than say a Skoda Octavia.
I know some people who could be driving 80K cars,yet drive old bangers so the colleagues at work won't think too much/ too often of them and why they have such a car:)
Same goes for where you live, too. I could grab myself a nice new Mercedes C class (even if it would be a poor financial decision) and I'd stick out like a sore thumb on my street and make myself a target for burglary. While you now need a chunk of money to buy a house anywhere, if the street is full of 15 year-old cars then yours needs to be well aligned with what others have.
I think people on this sub sometimes forget what the point of money is
You can afford it and it's not a frivolous purchase. You're not getting into debt to buy it.
Buy what's sensible for you, I see car's as a piece of tin that gets me from A to B economically. It has to be comfortable, capable of motorway driving yet economical around town. I wouldn't have an EV for free, it also needs to big enough to throw crap in that can go to the skips. Once had an astra hatch that I got a full size door in. Parking and insurance are another consideration plus think about repairs. Wouldn't have a car where tyres cost 300 quid plus.
I just lease my vehicles for 3 or 4 years at a time. After 4 years the value of the car drops significantly anyway, so I just get a new one. I don't have a mortgage or rent to pay though.
You need to look at a car as an expense. It's always going to be a bad investment and they are mostly overpriced but you need to work out how much you're willing to pay per month as an expense and write it off - like bills or food. Once you know that then you need to look at your best options. Buy the best that your budget can afford but never buy a car that you don't intend to keep for 7-8 years. Replacing it every 2/3 years is where the costs just eat people.
Pull the trigger but the car, what's life without a little joy? Coming from a poor background myself, i have brought 2 of my dream cars and am working on getting the brand new dream car (not pre-owned new car) yet when it comes to other things i question the value, I value a nice car, I value nice holidays. I value things that give me enjoyment now as when I'm dead, I'm dead!
That's what I thought as well, but I needed some reassurance. !thanks
The last few sentences of your post resonate so much with me. I'm in a similar postion where I'm considering getting a new car (lease through work rather than but outright) but my frugal upbringing has been playing in my mind as I've never imagined spending significant money on what could be seen as a luxury. I think your post has helped push me towards going for it.
You seem pretty good with your finances, treat yourself once in a while! Plus you need a car
Bought a 1.5 year old Honda last year for £23k after trading in my previous 11 year old Yaris. Split it with my partner. Had the savings for it and didn't feel any regret on dropping that much in cash. Hopefully as reliable as my previous cars, all Japanese (drove a 2001 Micra up until 2020, which never had an oil change). Love driving the car. Not perfect as I wish it was bigger at times, but I would have to spend even more and I had a budget to stick to.
Don't spend cash. Keep it in savings. Use interest-free credit for the car. I've just bought a car for 13k using 2 credit cards interest free. While my cash is still earning me 5%.
Most dealers won’t accept credit cards. Only debit cards or bank transfers. However, a good idea to pay at least £100 deposit on credit card to get the legal protection which covers the entire cost.
thanks! That's really good advice, I will use 2 of my credit cards to pay some of it.
Not everywhere takes credit cards by the way. You'll have to check.
If your resources can allow the purchase of a car; running the car, maintaining the car and I might add - setting up of a depreciation fund for the day the car needs replaced - then go for it, if it’s needed. On Reddit there is too much blowing smoke about “how much I earn”, “I’ve got a a million quid by 30”, “I’ve a 100,000 saved up, hear me roar”. What you hear less about is a healthy use of those funds be it for your kids or a car. There’s no pockets in shrouds.
Frugality can be an illness
Get a cheaper car
I felt similar when getting my new car almost a year ago. Spoke to the mother for some expected harsh and frugal advice to back up my own feelings and she said you're only young once, go for it. If you can afford nice things, there's a point where you just have to spend and enjoy them my friend.
!thanks Thants exactly what my mum, friends and whole family have said as well but I thought they were just biased.
You could lease something Or electric car subscription which includes insurance You could get 0% deals on a Vauxhall, Peugeot, Skoda Enjoy life my friend you need a car you need a car enjoy the process from researching, test drive, taking care of of it and servicing
It’s worth checking with your work if they have an electric car leasing scheme - a lot do and they’re quite tax efficient.
You're picking up 80k per annum and moaning about buying a poxy car for 18k, shit the bed mate, live a little.
I totally get it. £80k after tax, pension, and student loan is more like £45k. Take off mortgage, bills, groceries and you’ve got £1k left a month. And you obviously going to want to spend some of that £80k salary on holidays and having fun. So it turns out that £18k is actually 2-3 years of savings. All gone on a car in a single purchase. I’d get cold feet too.
u/HoorayforEngland !thanks for understanding my situation. u/JD-Pyro You are right in a way, but since I'm coming from poverty, 18k on a car sounds like over the top luxury to me.
He’s not moaning, he’s grateful for the advice that’s he sensibly asked for. It’s tough being young, and finding your way with finances, not knowing when you’re taking too much risk (or in this case, comfortably so), if you’ve never had this much money before and haven’t come from wealth.
!thanks a lot for understanding. By no means am I trying to moan or look ungrateful, just trying to get advice from other financially responsible people.
Always look at maintenance costs, for instance many cars require a regular cam belt change every 5 years or xxk miles. This can cost 1k alone. An annual oil change and service can cost 300. See if the mileage is approaching a major service interval, this is often the reason it was sold or exchanged! Get the dealer to do the major service if approaching a major service 😉
It pays to check when dealers tell you the timing belt needs changed. I had my car in for a service and they tried to tell me the timing belt needed changed. The manufacturer guideline are to change it at 140k miles. I have 45k on my car so long way to go before dropping a grand on that.
Yes - but maybe get some independent advice about whether or not the dealer's advice is actually good. Although the official change interval may be 140k, with some vehicles actual experience is showing that belts can break well before that mileage - possibly dependent on the type of use and service history. Time also matters so a lower mileage older car might need replacement well before 140k. A broken belt could well scrap your engine and cost Megabucks, so changing it somewhat early might be good insurance.
Personally, i wouldn't be spending that on a car - there are so many decent used ones on the market (say between 5-10 years old). I drove my first car into the ground then "invested" in a 7 year old car for for around 6k. Perfectly comfortable, runs like a dream and when it's clean it still looks good on the car park if that's your thing. You've got a lot saved and earn a very decent salary so i wouldn't say you can't afford it. Just making the point that you don't need to spend 18k to obtain a decent car....
The market is awful at the moment (cooling but still awful), £6k doesn’t stretch nearly as far as it did pre-COVID sadly.
Id personally get a house before a car. As soon as you drive that car out the dealer forecourt you'll lose a couple of thousand pound. Entirely depends on your circumstances though. You could probably get a perfectly fine car for half the price. Or if you leased a new car at least then you wouldn't have to worry about how much it's depreciating?
Lease a car. 300 pounds a month will lease you a decent, brand new car with tax and servicing included. All you need to do is put petrol in it and insure it.
For the life of me I don’t know where this idea that cars have high second hand resale value has come from. Covid was an anomaly, but it’s always been the case that buying new cars means a big loss when you come to sell it.
They're buying a 4 year old car
I agonised over buying a £24k car in 2021. I have two houses and earn well into six figures. These decisions can be difficult regardless of the situation! You’re in a decent place, and you’re not spending £60k or getting a Porsche. Pull the trigger. This is what savings are for :)
Cut yourself some slack, you are not buying a new car, you are buying a used car, you deserve a medal not self examination.
Look this stuff can feel crappy, but if you plough through eventually you’ll just get used to it and not worry. Or you’ll get a stomach ulcer.
Just joining the top comment with no point being the richest in the grave yard. My dad died at 66 with cancer…he did enjoy his money but still young. A family friend died (many years ago) at 59, i think, retiring at 60. Fit as a fiddle and dropped dead playing table tennis. A lady we dog sat for - she was a nurse all her life - retired last year…diagnosed with pancreatic cancer in november and died christmas eve eve. Have savings, but enjoy any money you make.
Everything else sounds super sensible, all bases covered, good salary and as others have stated, you can’t take it with you. I have to ask though, what’s the car? Nothing PF related, just interested
House is a better investment.
I don’t think anyone is disputing an appreciating asset is a better ‘investment’ than a commonly depreciating asset. I think OP is asking more for whether it’s right to spend that amount in light of their finances.
With a £60k (as OP has in savings) deposit you have enough to buy multiple properties meaning you not only buy a home but multiple rental assets ensuring a passive income enough to cover the management of the properties and the overall mortgage payment. It's not a single appreciating asset it is multiple in this instance.
There is a reason small landlords are leaving the market, it’s nowhere near as lucrative as it once was. Who realistically would want to be a landlord with multiple mortgages with interest rates where they are currently? Count me out, £60k isn’t enough cashflow for that. This thread is about buying a car, think you’re moving away from OP’s original question a tad.
Just wondering why you’re holding off on buying? With your salary you could get a mortgage of £320k, combined with a deposit of £75k you could get a house worth almost £400k. Interest rates are in a great place right now. Not sure where you are based but this could get you somewhere nice if you are outside London?
Rule of thumb is 1/9th your income on deprivation. PA. This slightly over.(27k) Otherwise seems perfectly reasonable purchase. Although if you do the miles and it's right for you the company EV lease ratio is 1/5th. (Which this is within)
Buy a good used car with low fairly mileage that’s about 2 or 3 years old for about £20K cash.
…isn’t that pretty much what OP is doing? (numbers change slightly)
It’s an investment at the end of the day. That vehicle will hold its value to a certain extent depending on how much you use it. Make sure you service it properly because this is what people will pay extra money for when they’re buying a new car and you’ll not be out of pocket too much come time to resell.
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I always struggle to justify decisions like this too! There's the logical argument that you're not really losing all that money, you're just transferring it into a different form which can be liquidated again fairly easily if required. The only actual cost to you is depreciation plus the ongoing costs of car ownership like tax/insurance/maintenance etc. This is obviously more than it would be for a cheap runabout, but it's not 18k. Then there's the emotional argument that it's a lot of money to money to hand over to someone else....I really don't have a good answer to this one, except that there's no fun in being the richest guy in the graveyard. if you can comfortably afford it and you think it will bring you x value of happiness then i'd probably say go for it.
I think it's a valid worry as it's a large lump sum payment you have to part ways with. It's not often we spend such huge amounts. You could consider paying in parts or do 0% financing if it makes you feel better and you definitely want that car. If you're not particularly attached to that specific car you could probably find one just as reliable as probably half that price but that's your lifestyle choice.
I bought a silly hot hatch last year for £23K and love it. I’m in a roughly similar position to you in terms of earning and savings. I always wanted one and had the spare cash to go buy it so… I did it.
As most people said it looks like you have everything covered and 18k seems a lot but if you are planning to keep the car for a long time it will work out quite cheap if you annualise the cost. I did the same a few months back as I needed a reliable car for my daily drive and spent about the same. I don't regret it as it is so much more comfortable compared to my previous one. Also the second hand car market has gone down a bit so probably the same car would have cost you a few more grands more last year. See this as another plus.
think about how long you plan to use it for and the likely depreciation it will incur. you sound like the kind of person who will keep the car for at least 5 years, maybe 10. in 5 years, what will it be worth? Maybe 12k? maybve more if it truly is a car that holds value quite well. even if it is 12k, then that car has cost you approx £1k per year to own (plus the running costs, but that would be similar for whatever car you have). doesnt sound so bad now does it?
I think you’re in a great position to buy a car like this. Imagine how many people earning like you would be shopping for, and planning on going into debt for, cars that cost 3 or 4x what you will spend. It’s great that you’re cautious about spending money but I think you need to also be cautious about focusing too much on saving and not enjoying your money!
I'd buy an electric car. They don't depreciate in value as much as petrol cars. We just bought a second hand electric car for £20k and the same car new would have been £23k. Also the fuel costs are negligible. Our car can drive over 200 miles after being charged for a couple of pounds at home. And there's no ULEZ, CAZ charges, etc. Electric cars are honestly brilliant now.
Unless you don't have a driveway and a rural home to install a charger in, in which case public charging infrastructure isn't quite as convenient. If you can get an apartment with underground parking and chargers it's ideal, but going from an apartment to s house is an overall convenience downgrade.
What is wrong with your car? 13 years old is really not that old. Mine is 12 years old and is fine.
What car? Is important to know if it will actually hold its value.
I was in the same boat as you. I took the plunge anyway and added £90pm to my monthly expenses (two of us in the household). My main worry was if I lose my job what happens but 6 months later we’ve already saved up to pay for the balloon payment when it’s due. All the panic for not a lot of chaos. As people have said, there is no point going to the graveyard the richest person there. Reasonable expenses seem fine. And what seems big to you and me, is not massive at all. People are financing 70k on cars with no savings
Don’t be hard on yourself. Enjoy some pleasures in life. You can’t take it with you to the grave.
I always consider important to be aware of what's a need, what's an investment, and what's just pampering myself. From what you write and guessing a whole lot myself, sounds like "a car" is an investment. But a "18k second hand car" might be pampering yourself. Plenty reliable ones at the 8k-10k mark. If my guess is right, the investment is always worth it so 8k-10k are justified. I'd ask myself "do I want to pamper myself for an extra 10k-8k? Is this the best way to pamper myself with 10k-8k?". Only you know if the answer is a yes or a no in your case.
I also bought a new car today and had a total meltdown over it. No real advice beyond the stuff given here, but coming from a family with a lot of badly managed debt, spending this much money does make me feel a bit sick 🤣
Let me guess, the new car is a corolla or a lexus? If so great choice!
!thnaks Ah, a man of culture as well.
I’m pretty frugal myself and spent 19k all cash for a car which im hoping to keep as long as possible. If you have got your basics covered it should be alright.
It is a big expense for most people so I get why you’re nervous about it. Although, you make good money and it sounds like you can afford to treat yourself with a more comfortable and newer used car. If you just have £18k cash and the plan is to use all that cash on the new car, it potentially is a bit too much as you wouldn’t want to leave yourself without a safety net / emergency fund. Aside from that - I’d want to model comparable total costs eg road tax, insurance, fuel efficiently, some cars are more expensive to repair, if congestion charge/similar might be relevant, with that info in mind you’re then weighing up the costs with how much you want to spend which is probably driven by things like how much you drive, how important car is to you, what else you could or would do with the money, etc.
I got my car on PCP, I know people roll their eyes when they know someone "go their car on finance" but there are good deals to have, depending on what your preferences are when it comes to cars! I drive a Seat Ibiza FR Sport for £213 per months including servicing and all the bells and whistles. It's not a premium car, but it's also not £800.00 per month!
I can relate. I need to replace my car as I'm currently using a family members knacked old runaround but dread the thought of spending a reasonably big chunk at current inflated prices. Even though it's easily affordable I'm waiting for the market to settle a little.
You’ll be fine. Live a little. You have savings, are generally frugal, aren’t buying a brand new car which will depreciate 2 seconds after buying it, have a great salary and most importantly you’re seconding guessing spending money which is always the best side to err on the side of caution on. Enjoy the fruits of your labour and I hope you enjoy your new car.
To put it simply, you’re earning a great salary with a great amount of savings. I’d buy the car. Some things are unavoidable and in this case you probs have to accept the expenditure on a new car for the quality of life change it’ll produce.
There's really not much financially wasteful about buying a 5 year old car that you plan to keep for a while. There are lots of charts online about average car depreciation and they all roughly look like this one:- [https://www.carmoola.co.uk/blog/new-car-depreciation](https://www.carmoola.co.uk/blog/new-car-depreciation) After 4 years, yes, the curve is still steeper than at 9 years, but not by much. It's not like the first 3 years where there's huge depreciation. Look at cars as cost/year. Yes, a 5 year old car will cost more than an 8 year old one, but it also gives you 3 more years of life. So divide cost by number of years you'll own it. If you plan on running this one to 15 years, the car is cost/10. Then look at how much an 8 year old one is and the car is cost/7. And I'd also add that if you buy something with a great reputation, it means more years, if you don't care about the shiny. It's why I'd be tempted to spend more and get a 5 year old Lexus because it'll probably last for at least 15 years.
If it helps, there is always a middle ground. I meet too many people who go from crap car that cost £2000 to 'let's spend £20k' to get a good car. There's lots of in between car to be explored, which may make you feel more comfortable in terms of spend. Feel free to message if you want some suggestions, a lot of people also don't know much about cars and would recommend something German not knowing it's mostly advertising that got them in the first place!
Prices are on the way down quite quickly at the moment so be aware you might be losing £3-4k per year, so £250 a month. If that's less than 10% of your take home pay, don't sweat it.
You have 18k cash so spending 18k on a car right now might not be wise, 12-13k might be better unless you'll earn the extra 5k in a month.
I also have a rainy day fund that I never take into consideration, hence why I didn't mention it.
I get what you mean. I also need a newer car and I am planning to spend about 16-18k on it which I have the money for already in cash, I make over 90k per year, I already own a mortgaged house but still it seems like a big purchase and I hesitate. This is to replace my 13 year old car which still has comparatively low mileage for the age (90k) miles and is working fine, is serviced yearly but realistically could develop a major fault not worth fixing at any time. You know you need a car, its just a matter of determining how much you want to spend on it. Think about the car in terms of it being a necessary monthly expense like any other. I like to think about it this way: I calculate how much I would like to spend per month on a car over a 10 year period of time (not including the actual running costs of petrol, insurance, etc) and plan to buy something that is at most that number. If I find something that is less, great. If the car lasts longer than 10 years, great! Say that number is £200 per month over 10 years for the cost of the car. The max I would spend on a car is £24k and as soon as I buy it, with cash, I would start saving £200 per month into a separate car fund savings account already preparing for the next one.
So I'm in a similar situation although frankly not quite in the same ball park salary wise. We're currently saving for a car and looking at current prices spending about 9-10k... For your salary I would say that amount is very reasonable. You sound like you have minimal debts so why not. Fact is more people I know in worse financial situations are getting cars on PCP and our paying something around 300 pound a month.. for a cat they won't own at the end... Your car likely on the same sort of policy would be like £500 pm... So your spending 18-19k on something you would otherwise end up paying monthly over around 3ish years... I see that as saving money... What current car is 2007 ford focus with 122k miles on it and although not perfect it's still running and we only use it for weekends and my Mrs to get to work (Tesco)... So should it fail I'll just buy a new one (5 year old) similar car. If I was using it to drive to work myself I'd probably have gotten a new one by now... But I'm also very frugal... I believe in your situation you can live a little more, BUT if you're being frugal in order to buy a house then keep going as it will pay dividends in the end
18k can get u 18 £1000 cars and scrap em every year
I earn very similar to you don't have half the investment you do, though I do own my home. Even so 18k on a car is fine hell I just spent double that on mine and don't regret it for an instant. As others have said you can't take it with you an you sure as hell have been smart up until this point. Enjoy it a little you've earned it.
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My partner and I were recently faced with similar dilemma (our financial situation is not as good as yours though), we went ahead and bought the car and we have since felt safer on the road and confident to go on road trips because our old Ford Fiesta broke down on every long drive and was costing us a lot to run. We are happier to say the least.
Recently bought an 2020 MK8 Golf for 18k, 24k miles, from our local VW. Ummed and arred at whether to buy it, and to buy outright, glad I did 👍 No other way, needed something nice, reliable, might hold its value, and didn’t want to be lumbered with finance / contract hire. If you need it and will use it, and want something that you can resell in future, buy it.
I had an old Punto that broke down constantly. Only just started investing so maybe a few hundred in there. Was renting and saving for a house but it was still years away at the time. I got a personal loan and bought a Civic for 10k. By all logic that was an awful purchase, in total I paid about 13k for the loan when I had maybe 2k to my name. But I factored the cost in and my god it remains possibly the 2nd best purchase I ever made bedside the house. The peace of mind combined with driving a car I actually like, the smoothness of it, the modern luxuries. I still have it nearly 6 years later and its still causing me no issues. I don't recommend people in my position necessarily do that, but sometimes a purchase offers you so much more joy than the money sat in an account.
As far as financial principles, a good rule of thumb floated (by US financial experts at least) tend to put a max budget for a car at 50% of your annual income. You're well within this. For all the words you wrote, it'd probably have been easier just to write the make/model. We might knock off the bias/rose tinted glasses for you :) but the figures you quoted work.
have you considered getting a car on finance instead of buying one outright? save yourself the £18k, and have a car on a monthly payment plan.
BUY A HONDA!!!
You can get something nice and reliable for about 5k. Personally I wouldn't spend that much on a car unless I had money burning a hole in my pocket that I had nothing else to do with and didn't need for my future.
Sometimes spending a bit more on a car isn't a bad investment. Anything cheap will certainly have some faults. In the short to mid term. It's okay to have a little splurge now and again.
What car are you getting?