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Is car ownership unaffordable?

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En

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I don't think anybody expects to own it after the three years are up. Rather than pay a balloon lump sum payment, they happily give the keys back for a newer car, that's why the majority of 'buyers' do it. You pay a premium to let the dealer swallow the depreciation rather than own a depreciating asset yourself. It's wise in a sense.
A lot of people just see the 'hand it back at the end of the 3 years and if you are lucky and the market does better than planned you might be able to upgrade / cut the monthly on your next vehuicle funded this way
meanwhile plenty of ready stock for one othe key points ( 3 years) in the used market ( those being pre/reg 'management' / 'ex demo ( and a chunk of spot hire motors) nearly new / 3 years old / 5 years old / end of the approved scheme ages
 
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skyhigh

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e.g. you'll need to pay hefty penalties for going over on mileage or for even relatively minor damage.
That doesn't make it a scam though.

As long as you understand the product and are happy with the relative pros/cons I don't understand the problem.
 

En

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That doesn't make it a scam though.

As long as you understand the product and are happy with the relative pros/cons I don't understand the problem.
it;s only a scam if you are one of the people whose dream in life is to be showing your 'compo face' in the local paper ...
 

simonw

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Yes, true. Low interest rates are harmful in many ways, they've perpetuated massive house price increases and they have, as you say, done so for cars too. Around 6% is probably where rates should naturally sit - that's hard for those who bought overpriced houses but over time inflation removes the pain.



Good. New cars are presently overpriced by about a third, in some cases a half. A new Vauxhall Astra is presently around £40K - £20-25K is a reasonable price for the non-premium compact family hatch market. The market needs to crash - sadly, that'll probably likely be by way of the Chinese bringing in reasonably priced cars and the European manufacturers folding or being taken over by them.
A bottom of the range Astra is £25k, next level is £27k and I doubt anyone is paying list price.
 

Bletchleyite

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That doesn't make it a scam though.

As long as you understand the product and are happy with the relative pros/cons I don't understand the problem.

I suspect there is a lot of misselling going on. A classic is one of the leasing adverts which mumbles "you will not own the vehicle" quickly and quietly.
 

43066

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I suspect there is a lot of misselling going on. A classic is one of the leasing adverts which mumbles "you will not own the vehicle" quickly and quietly.

Why would a leasing advert stating “you will not own the vehicle” be an example of misselling?

With regards to PCP, so long as people entering into the arrangement are advised that it’s a credit agreement, and pointed towards the small print, it’s up to them whether they take it on. There’s a cooling off period and quite a bit of protection afforded under the consumer credit act.
 

43066

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Not making that prominent by waffling through it very quickly.

Fully agree there’s scope for misselling if people are mislead as to how a product works etc. but a lease being described as such surely implies no ownership.

I’d agree it’s a pretty dirty industry generally - and one that seems to be well and truly on its knees now.
 

ExRes

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As I can afford a car its affordable for me, but I'm now at the point of wishing it was an expense I didn't have. MOT, 4 tyres and a service this month, plus the monthly amount I save so I can replace the vehicle at some point.

The current price of cars is however crazy. I was in the local Toyota dealership a couple of weeks ago and a year old Yaris with less than 10,000 miles (a car we paid £9,000 for in 2018) is now over £20,000, new models can be nudging £30k. How did that happen?

Which Yaris though? a cursory look at Auto Trader shows a 22 reg 6000 mile 1.6T GR Circuit AWD for £34k and a 22 reg 6000 mile VVT-h Icon E-CVT for £16k

== Doublepost prevention - post automatically merged: ==

According to the first post on this thread @miklcct is quoted as saying "A private car is luxury which is never under consideration if you want to save money", well quite honestly you could say that about most things in life, you would never go on holiday, have a hobby, eat out, have a pet or buy clothes anywhere other than charity shops if saving money was the driving force in your life, a 'luxury' is solely down to the person spending the money and dependent on their income and the value they put on their way of life
 
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Egg Centric

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I can't afford a thousand in deprecation, insurance and parking every year.

Others are addressing the general point (which is silly and should be with a moment's thought - just look around you at all the cars).

But speaking specifically to you - you present as a junior-mid level developer. You should be on at least 75k in London, with multiples of that possible if you get lucky. So you certainly ought to be able to afford it. But you type as if you're on 40k. If that's the case then you urgently need to get in touch with a recruiter and/or upskill.

If you are on more than 75k and still think you cannot afford a car I don't know what to say to you really. That's about 95th percentile for waged income in the UK. And a lot more than 5% of us have cars.

== Doublepost prevention - post automatically merged: ==

Another analogy occurred to me - how much do you think a kid costs, compared to a car? Does no one have children*?

*Off topic but there is a genuine serious societal problem here, but it's still very much doable
 
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Ghostbus

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I can only marvel when I look back and realise what I was able to afford in my early twenties. Even though I already had a mortgage on a two bed maisonette, was on a decent but not spectacular graduate wage, and had an extremely active social life, I still somehow saved £2,500 in cash quite easily.

Handing this wad over to a private seller in the next town over got me not just my first ever proper grown up car, a 2.5L four door, only a few years old, it was a very flash car. A well respected reliable European make, but in one of a handful of extremely sexy body styles. It was not only a decent roundabout and a damn fine way to commute (20 minutes, two motorway junctions), I could now cruise comfortably at 80 on the motorway on the very long drives to visit the folks in the land of coal and crumpets, where a whippet or a stolen Ford Fiesta was the preferred mode of transport. I tried not to let my obvious wealth and success humiliate them. I probably failed. My young cousins wanted to be driven everywhere, and I gladly did so.

Despite passing my test well after my peers, in just a few short years I had gone from knocking about in my best mate's mothers ancient Nissan Micra (the effort of making a long distance motorway drive being what finally did for the poor thing), to certified legend. I don't even really remember what it cost to insure, tax, maintain or run, that's how affordable it was against my monthly budget. I doubt I even gave the fact I should also be factoring in a £250 a year depreciation cost a second's thought. I only really remember wondering if it was cost effective to be in the AA/RAC or not. Probably not.

Total freedom. There was not a city I couldn't drive into for free, and the Dartford Crossing was a mere annoyance, at £1 a pop. Loose change.

I see that petrol was half the cost back then than it is now. Half!

I doubt there is a single part of the above story that a young person today can relate to. I didn't even have a student loan to pay off.
 

miklcct

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But speaking specifically to you - you present as a junior-mid level developer. You should be on at least 75k in London, with multiples of that possible if you get lucky. So you certainly ought to be able to afford it. But you type as if you're on 40k. If that's the case then you urgently need to get in touch with a recruiter and/or upskill.
Most junior / mid level developer roles are on 40k - 60k in London (25k - 40k is common outside London), and I started with 40k. TfL advertised something around 80k for a SENIOR role.

Of course I'll be able to afford a car if I'm on 75k, but very few people actually reach that.
 

Egg Centric

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Most junior / mid level developer roles are on 40k - 60k in London (25k - 40k is common outside London), and I started with 40k. TfL advertised something around 80k for a SENIOR role.

Of course I'll be able to afford a car if I'm on 75k, but very few people actually reach that.

That's simply not the case. Ignore developer surveys as they're nonsense, and ignore TFL as it's quasi public sector so you trade some salary for job security and pension etc.

60k would be mid level in Newcastle, not London. You are being had.
 

johncrossley

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I see that petrol was half the cost back then than it is now. Half!

Is this inflation adjusted? My local petrol station currently charges £1.29 per litre for unleaded. So that would be 74p in 2004 money and 63p in 1994 money.
 

deltic

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I'm always amazed how many expensive cars there are on the roads relative to average wage levels. A very ordinary car can cost £20-30k which is broadly equivalent to the average earner's annual take home pay. Then there are all the running costs on top of that. Now we no longer have children to ferry around I can't see us replacing our car when it eventually expires. Average running costs including depreciation are easily a £1 a mile, far cheaper and more convenient using public transport albeit we live in inner London.
 

Egg Centric

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I'm always amazed how many expensive cars there are on the roads relative to average wage levels. A very ordinary car can cost £20-30k which is broadly equivalent to the average earner's annual take home pay. Then there are all the running costs on top of that. Now we no longer have children to ferry around I can't see us replacing our car when it eventually expires. Average running costs including depreciation are easily a £1 a mile, far cheaper and more convenient using public transport albeit we live in inner London.

I think this will be changing a bit. It was driven by super low interest rates for ages. Most of the "owners" of these cars didn't own them.

Also I don't know where you live, but the south east is different to the rest of the country here.

My own car costs are nowwhere near £1 a mile but I have always been a "don't even look until it's at >100 000 miles" kinda guy due to being very cheap. Might change that with the move to electric, but no rush. Mrs Centric's car (which admittedly is falling apart) is at roughly 196-197k. Cost less than a grand buying it off a friend who had had it from new. My own car also cost less than 6k and has only appreciated in value due to its scarcity.

I may have to be more "responsible" soon and get sensible cars due to Baby Centric(s) but I will no way hozay be paying £1/mile. And If I buy a 2 child sized car there's no way it'll be under 300bhp.
 

Sun Chariot

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My own car costs are nowwhere near £1 a mile but I have always been a "don't even look until it's at >100 000 miles" kinda guy due to being very cheap. Might change that with the move to electric, but no rush.
Mrs Centric's car (which admittedly is falling apart) is at roughly 196-197k. Cost less than a grand buying it off a friend who had had it from new. My own car also cost less than 6k and has only appreciated in value due to its scarcity.
True motor spirit, take a bow. 8-)

My cars were not in that mileage magnitude - the SD1 and 730i were in their high fifties'.

A five year old Mazda6 2.3 Sport (the nat-asp variant of their masterful 6MPS) came my way for 3500 notes; and that was traded in for my "midlife fling" - a 36k mile Saab 9-3 V6 Aero Hirsch 'vert. Drove like it's on rails. I part-ex'd it at 150k miles only because my growing son could no longer fit in the back.
 

InkyScrolls

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I've had a Ford Galaxy before which we managed to push to 301k before it died, and we've hit 250k with two other vehicles (including one of our two current ones) - they'll keep going if one is prepared to invest the time and money!
 

Egg Centric

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True motor spirit, take a bow. 8-)

My cars were not in that mileage magnitude - the SD1 and 730i were in their high fifties'.

A five year old Mazda6 2.3 Sport (the nat-asp variant of their masterful 6MPS) came my way for 3500 notes; and that was traded in for my "midlife fling" - a 36k mile Saab 9-3 V6 Aero Hirsch 'vert. Drove like it's on rails. I part-ex'd it at 150k miles only because my growing son could no longer fit in the back.

Well sure I don't think a 200k SD1 would be very sensible. I did very briefly have a mid 90s Rover 800 as a student tho that cost a couple of hundred quid. That was fine until I leant it to a friend who discovered why you shouldn't take magic mushrooms and drive. Happy days. And later on, also as a student, an XJ40 that was about a grand (forget the mileage but it would have been...lots. I road rallied it until they noticed how many cylinders it had then back to a Volvo 740 again bought for tuppence).

Reality is modern cars are built for huge mileages so I buy on condition. Maybe changing now again, I was aghast when getting a lift in a colleagues new Merc yesterday that he's paying a subscription for an app to use it to its potential. I don't like this sort of thing at all. A full subscription service I can understand (have been a ZipCar member before and it was very handy) but half owning a car isn't for me.
 

miklcct

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That's simply not the case. Ignore developer surveys as they're nonsense, and ignore TFL as it's quasi public sector so you trade some salary for job security and pension etc.

60k would be mid level in Newcastle, not London. You are being had.
You can go to Indeed to search for jobs and see that I'm right.

My company is now recruiting a junior to mid level software engineer role in High Holborn and the salary range is £40k to £60k. In my previous job outside London where I failed probation (in the same industry, but with a slightly different technological stack), the salary was £44k and it was marketed as a senior role.

Lead Developer roles in London have something around £90k to £100k.
 

Llanigraham

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Average running costs including depreciation are easily a £1 a mile, far cheaper and more convenient using public transport albeit we live in inner London.

Is it?
Because of the volunteering I do I keep a spreadsheet of every penny, excluding depreciation, I spend on my car, a Kia Niro self-charging hybrid, bought brand new in July 2020, and over the 78k miles I have calculated it has cost me 20p a mile. Even my 26 year old MGF, for which I keep a similar spreadsheet hasn't cost me that much.
I discount depreciation because I invariably keep my cars for over 5 years and average well over 100k miles, but even with that included on the Niro it would still not be that high.
 

Ghostbus

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Is this inflation adjusted? My local petrol station currently charges £1.29 per litre for unleaded.
Good point. I had petrol at 75p in 2000, which is £1.38 in today's money. Although it isn't so long ago petrol was far higher than it is today. Maybe it's just the cost of living in general, because for my budget today, spending £69 for a tank of petrol (50l) is not something I'd just do on a whim. Whereas back then, it genuineluy felt like chicken feed, relative to other costs of living. Apparently I was only getting 30mpg, which is 330 miles on a tank. Sounds about right. A fortnight's motorong, give or take, or the length of England at 80mph.
Reality is modern cars are built for huge mileages
Another good point. I wasn't expecting that 2.0L sexy beast to have any resale value beyond 100k, and would certainly start to be costing a lot when the MOT rolled around. As a teenage buyer, I'd been burned several times with earlier, cheaper high mileage tiny crap boxes, finding out that even if the engine runs fine and nothing else squeaks, clonks or has a badger living in it, that doesn't mean it won't cost a week's wages to weld something that the Department of Transport says shouldn't be wobbling or even hanging off. It was this more than anything else that stopped me stretching the finances in my early 20s to obtain a higher mileage proper drug dealer's car, which I was amazed to realise was even within my reach given I wasn't a drug dealer. My balding divorced local landlord looking to upgrade to a Porche Boxter offered me his high mileage AMG coupe for £5,000, a generous price for a loyal customer, which I could have afforded to insure and fuel. I was very very tempted.
 

Egg Centric

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You can go to Indeed to search for jobs and see that I'm right.

My company is now recruiting a junior to mid level software engineer role in High Holborn and the salary range is £40k to £60k. In my previous job outside London where I failed probation (in the same industry, but with a slightly different technological stack), the salary was £44k and it was marketed as a senior role.

Lead Developer roles in London have something around £90k to £100k.

Decent salary jobs are not on Indeed. Go to a recruiter.
 

deltic

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Is it?
Because of the volunteering I do I keep a spreadsheet of every penny, excluding depreciation, I spend on my car, a Kia Niro self-charging hybrid, bought brand new in July 2020, and over the 78k miles I have calculated it has cost me 20p a mile. Even my 26 year old MGF, for which I keep a similar spreadsheet hasn't cost me that much.
I discount depreciation because I invariably keep my cars for over 5 years and average well over 100k miles, but even with that included on the Niro it would still not be that high.


Many people who have challenged the £1 a mile cost are doing far higher mileage than average and keeping their cars longer than average.

In 2023, the average household spent £79 a week on transport, 90% of that was related to motoring. Based on average miles travelled this roughly equates to a cost per mile of £1.10 for cars/vans, 28p for rail, and 26p for buses. Assuming an average of 1.5 people per car trip, this brings the cost per person per mile for cars/vans to around 70p. Detailed data can be found in the Family Spending and National Travel surveys.

These costs exclude the cost of charging an EV and the tax paid on the benefit in kind of a company car.

Its notable that those in London spend considerably less on transport than those in other parts of the UK.
 

bspahh

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Many people who have challenged the £1 a mile cost are doing far higher mileage than average and keeping their cars longer than average.

The Fleet News Running Costs Calculator has predicted running costs to lease a new car, including the cost of fuel, servicing and depreciation. You can choose the class of car (small/medium/large/SUV etc) to get a list of models and then click the heading in the table to sort by the cost in pence per mile.

The best selling cars in the UK at the moment are a Ford Puma and Kia Sportage. It doesn't list anything for a Ford Puma, but for 30000 miles in 3 years, you can get a Kia Sportage Estate 1.6T GDi 157 48V ISG 2 5dr for 63p/mile. The detailed listing is here

Most people don't buy brand new cars, and don't spend £1 a mile to run a car
 

LJA

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Well given the number of cars on the road it’s clearly not

And even if it’s a struggle, it’s pretty much a necessity outside of central-ish London. Yes it’s possible to get by without a car but it makes life so much harder.
 
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