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How to judge what car you can afford?


ddcboyle

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It's called PCP. Look at www.contracthoreandleasing.com to get an idea of prices, but make sure you're searching for Personal and not Business. I've never done it myself but i can see the benefit. I always wondered how youngish people could afford brand new cars, and in the majority of cases this is how.

 

In terms of buying a car yourself, for me it's all about depreciation. I like to have nice cars, but i want to get them after the majority of the depreciation has passed - that way it wont cost you as much in the long run.

 

I wouldnt dream of spending £19k on an A5 as you know it will be worth £10k in 2 years time. However if you buy a £10k A5 now it's going to be worth £7-8k in 2 years, so you've just saved yourself £7k.

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It's called PCP. Look at www.contracthoreandleasing.com to get an idea of prices, but make sure you're searching for Personal and not Business. I've never done it myself but i can see the benefit. I always wondered how youngish people could afford brand new cars, and in the majority of cases this is how.

 

In terms of buying a car yourself, for me it's all about depreciation. I like to have nice cars, but i want to get them after the majority of the depreciation has passed - that way it wont cost you as much in the long run.

 

I wouldnt dream of spending £19k on an A5 as you know it will be worth £10k in 2 years time. However if you buy a £10k A5 now it's going to be worth £7-8k in 2 years, so you've just saved yourself £7k.

 

Yeah thats true i guess. I just wouldnt know how to know when it will have stopped the large depreciation? I bought my zed for 8k and could probably still get 7k for it. But, when i bought it i thought it was still depreciating quite alot. Is it a set year that they calm down, or is it specific to different cars?

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I was working out the house rent by half, as id only ever rent a house with my partner or my mate. If it was just me on my own, my parents best have my room ready :D

 

Just be wary, as I said factor in worst case scenarios for your costs of rent, so many people underestimate it. Food shopping for two people per month, probably looking at at least £250 I would have thought? Do you eat out much? We probably eat out twice a month, usually is another £120 on top for the month.

 

It might all be divided by two - but it does add up!

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It's called PCP. Look at www.contracthoreandleasing.com to get an idea of prices, but make sure you're searching for Personal and not Business. I've never done it myself but i can see the benefit. I always wondered how youngish people could afford brand new cars, and in the majority of cases this is how.

 

In terms of buying a car yourself, for me it's all about depreciation. I like to have nice cars, but i want to get them after the majority of the depreciation has passed - that way it wont cost you as much in the long run.

 

I wouldnt dream of spending £19k on an A5 as you know it will be worth £10k in 2 years time. However if you buy a £10k A5 now it's going to be worth £7-8k in 2 years, so you've just saved yourself £7k.

 

Yeah thats true i guess. I just wouldnt know how to know when it will have stopped the large depreciation? I bought my zed for 8k and could probably still get 7k for it. But, when i bought it i thought it was still depreciating quite alot. Is it a set year that they calm down, or is it specific to different cars?

 

Totally different amount per car. Just go on autotrader and look at the bottom price for an A5. The cheapest A5 is £8k for a 2008 car, which is 5 years old - so you know that in 5 years a 2013 car will be worth around £8k. This is obviously not an exact science as differences in mileage/spec/condition will always be reflected in the price, but it allows you to get an idea.

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I mean to be fair, we all on here love our cars, it's more to us than a vehicle to ferry us to work and back or pop down the shops.

But the sad reality is that everything is getting more expensive.

As a reaction to that we either look to improve our income (seek promotion / additional part-time job) or we have to set our living standards a little lower.

No point in dreaming about Audi A5 when you are beginning to struggle to keep a 350Z.

TBH, if the OP purely bought the Zed and resisted in modding it, he'd prolly not be looking to change.

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Wow, £500 for rent and bills, must be out in zone 6 somewhere which is quite a small place? We own a flat in north London for instance, 1 bed, rent is £700 a month before bills. Then you have council tax (circa £100-£200 a month), water rates, leccy, gas which is another £150 a month I would say. Then the smaller stuff like TV licence, monthly travel costs to work, lunch at work, etc. Clothes top ups generally set me back £50 a month on average ie new shoes, work clothes etc. Then you start buying food...this is all before you have even stepped out the door to have a beer with your mates! I am sure there are many other costs which I have missed as well.

 

What bank you with? Most now do a cost of living calculator which outlines all the possible bills per month and if you fill it in with a worst case scenario in mind (whereas most people are inclined to put best case) then it should give you a good idea of what your disposable income is.

 

£700, you could rent stirling castle for that up here :lol:

 

I am 23 and make bit above average and still stay with the parents...... I only pay 180 a month for the Zed and think thats ample. I could afford a lot more but then you tie yourself down and you aren't as flexible. I think you can judge how much you can afford with how mcuh money you have left with your current finance(assuming its on finance)

 

When you moving up to Jockland?

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Wow, £500 for rent and bills, must be out in zone 6 somewhere which is quite a small place? We own a flat in north London for instance, 1 bed, rent is £700 a month before bills. Then you have council tax (circa £100-£200 a month), water rates, leccy, gas which is another £150 a month I would say. Then the smaller stuff like TV licence, monthly travel costs to work, lunch at work, etc. Clothes top ups generally set me back £50 a month on average ie new shoes, work clothes etc. Then you start buying food...this is all before you have even stepped out the door to have a beer with your mates! I am sure there are many other costs which I have missed as well.

 

What bank you with? Most now do a cost of living calculator which outlines all the possible bills per month and if you fill it in with a worst case scenario in mind (whereas most people are inclined to put best case) then it should give you a good idea of what your disposable income is.

 

£700, you could rent stirling castle for that up here :lol:

 

I am 23 and make bit above average and still stay with the parents...... I only pay 180 a month for the Zed and think thats ample. I could afford a lot more but then you tie yourself down and you aren't as flexible. I think you can judge how much you can afford with how mcuh money you have left with your current finance(assuming its on finance)

 

When you moving up to Jockland?

 

Haha I wont tell you how much I pay in rent in Richmond then, that would give you a heart attack!

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This is being complicated far too much. You can afford what you want to afford (within reason). Depends where you priorities are. I could go out tomorrow and spank dollar on a gtr, no problem on finance. But I don't because I like money in the bank, investments and a few holidays a year.

 

Everyone's priorities are different, if you get a finance package you know how much deposit and you know how much it will cost each month and for how long. Only you know your own financial situation.

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Always find these sorts of reports so frustrating - how many people are actually, average? Hardly any. More useful are quartiles and standard deviations...huff!

 

Or something like this where you enter your salary after tax and it tells you what percentile you're in:

 

http://www.theguardian.com/society/datablog/interactive/2012/jun/22/how-wealthy-you-compared?guni=Graphic:in%20body%20link

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Always find these sorts of reports so frustrating - how many people are actually, average? Hardly any. More useful are quartiles and standard deviations...huff!

 

Or something like this where you enter your salary after tax and it tells you what percentile you're in:

 

http://www.theguardi...ic:in body link

 

That's more like it! Amazing how the media etc throw averages around as if it means anything. i.e. 7 people run the 100 metres, 3 run it in 10 seconds, 3 run it in 20 seconds and 1 in 15 seconds, the average is 15 but really it means naff all, its not the time most people will run it in.

 

Sorry, rant done now, don't want to remind myself of that dull stats degree I did many moons ago...!

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Always find these sorts of reports so frustrating - how many people are actually, average? Hardly any. More useful are quartiles and standard deviations...huff!

 

Or something like this where you enter your salary after tax and it tells you what percentile you're in:

 

http://www.theguardi...ic:in body link

 

That's pretty cool!

 

We should all do it and then do a poll of the results on here to see what percentile you fall into.

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I used to always buy my cars outright. Nowadays as long as I make sure that for the period I'm likely to own the car I'm not going to end up in negative equity on it then thats fine by me. Means I always have a safety net if i need to sell up.

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Always find these sorts of reports so frustrating - how many people are actually, average? Hardly any. More useful are quartiles and standard deviations...huff!

 

Or something like this where you enter your salary after tax and it tells you what percentile you're in:

 

http://www.theguardi...ic:in body link

 

That's pretty cool!

 

We should all do it and then do a poll of the results on here to see what percentile you fall into.

 

Apparently I live in poverty lol!

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You lot have some funny ideas about affordability!

 

IMHO there's no one correct answer to this, but so long as your income exceeds your outgoings while maintaining the kind of lifestyle you're happy with, you can afford it.

 

To counterpoint some of the examples on here about spending 50% of your monthly income on the Zed, me and Mrs Commander make just over 100k / year between us, and I drive a £9k HR and she's in a £500 fiesta... And that's all we can afford because things like Mortgage, Pensions, Holidays and riding horses also need to be paid for.

 

This level of spending works for us but it's massively different for everybody. There is no absolute right or wrong... If we spent half our income on a car we couldn't maintain the rest of our lifestyle and Holidays / House / Horse riding would have to go as a result... And that's not what we want.

 

The thing I always get on my high horse about is debt - I racked up a 12k student loan and a 14k credit card bill once upon a time as a single man renting a flat on my own. It took me about 7years of not having much fun to pay it all off and to this day I couldn't tell you what I spunked it all on. Please don't get yourself in to uncontrolled debts, especially on credit cards for mods, because its just not worth it... Always do the maths - Income VS Expenditure VS LifeStyle and future ambitions. Be realistic and honest with yourself and don't get sucked in to spending money you don't need or can't afford to spend.

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You lot have some funny ideas about affordability!

 

IMHO there's no one correct answer to this, but so long as your income exceeds your outgoings while maintaining the kind of lifestyle you're happy with, you can afford it.

 

To counterpoint some of the examples on here about spending 50% of your monthly income on the Zed, me and Mrs Commander make just over 100k / year between us, and I drive a £9k HR and she's in a £500 fiesta... And that's all we can afford because things like Mortgage, Pensions, Holidays and riding horses also need to be paid for.

 

This level of spending works for us but it's massively different for everybody. There is no absolute right or wrong... If we spent half our income on a car we couldn't maintain the rest of our lifestyle and Holidays / House / Horse riding would have to go as a result... And that's not what we want.

 

The thing I always get on my high horse about is debt - I racked up a 12k student loan and a 14k credit card bill once upon a time as a single man renting a flat on my own. It took me about 7years of not having much fun to pay it all off and to this day I couldn't tell you what I spunked it all on. Please don't get yourself in to uncontrolled debts, especially on credit cards for mods, because its just not worth it... Always do the maths - Income VS Expenditure VS LifeStyle and future ambitions. Be realistic and honest with yourself and don't get sucked in to spending money you don't need or can't afford to spend.

 

This is fantastic advice.

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I hit the debt barrier with the zed when I tried to modify it, not thinking some firum members are on way more than I am. Only 1,5k but it stresses you out fast. So no more mods foe me now :lol:

 

I guess im over estimating what car I can afford/like. Seems the a5 I would have to keep track of finances to afford it. Maybe worth using the zeds money (when I come to sell it) and look at adding maybe 1 or 2k finance to get a nice but not out of pocket car.

 

Never owned a house, rented or had kids. So I dont even know how long ill have the zed for tbh.

 

I was suprised to see commander taking in 100k and having the zed for 9k. Sort of sets things in place that im putting a car too high in financial priorities

 

 

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