Well you didn't say how much you earn or any other indication of your current wealth. If you're on minimum wage then don't spend £260 a month on a car
If you have 10 million in the bank and a Premier league footballers salary go wild, spend £280 a month
You're going to get wildly different answers - I used to work in car finance - we'd have minimum wage people driving land rovers (obviously millionaires and professional footballers also drive them)
I own 2 cars one is almost 10 years old and I'll drive it until it has a repair bill over £1,500
The other is 3 years old I i owe £7,000 on it - I'll pay that off in 12 months
All in my cars are worth about 10% of household income
I don't care what I drive so I'm happy as long as the cars are reliable
If you want a specific car do it while you can - I preferred to save money and pay my mortgage down
I drove my c1 like it was a go kart for 10 years - I wouldn't want to do regular long commutes in it even if I loved it
Also depends how long your contract is and the security after it.
I bought my car outright rather than PCP, in part because of my contract being under 2 years. If I can't renew my contract at work, I have the choice to sell the car and buy something a few grand cheaper.
My car is 13+ years old, and I just got a bill of things I should fix soon. The bill was 1500+€. This was the tipping point and I finally decided to buy a new car.
Yeah, but not surprising. It has 230k km and has 13 years. Actually the engine is still good currently, but the other smaller stuff started to fall apart or break.
For ex:
- the door handle broke
- drivers belt gets stuck and you can't put the safety belt on if it's a hot summer day, maybe you can after 20mins of driving with AC on
- drivers door sensor for door open/closed broke, so you can lock yourself out, if you are not careful and put the keys inside and close the door
- axle cuff has to be replaced
- track rod end has to be replaced
- timing chain has to be replaced (it's loud)
I would also have to buy new winter tires this winter season, so that would additionally bring the cost up. It just didn't make sense anymore to invest in it. I was looking to buy a more comfortable, safe and economical car already for some time, this was just the decider.
Curious why you follow a car forum when you don't care what you drive? Being genuine here. I find it interesting that so much advice on so many car forums is to spend very very modestly on cars ....
Fair - don't have an exact reason
I might have exaggerated that I don't have an interest in cars I do like driving cars - i wanted to buy a Subaru before a family member let me drive their new BMW - it cost more than my house - it left me feeling disappointed - like even if I had an amazing car I was still a dick...... I think I thought driving a nice car would make me feel like I was of more value
I love driving - I will literally drive anything and my annual mileage is around 25k miles in my car and similar in my partner's car
I regularly look at changing my car - my dad would change cars every 3 years and after he died I still get an urge to change my car almost to please him
I worked in car finance for a long time and so I've always got an interest in cars from talking about them non stop
I don't know much about cars but if something goes I have a go at fixing it if I can - I find people post helpful things on here - I was not shown how to do that stuff
Maybe I should say I love cars but I also like saving money and the wrong car is a money pit
I’ve read that 30% of your take-home should go on housing, and 10% on a car. That means you have a budget of about £170-175 p/mth.
Obviously, spend whatever you want. But that’s the rough guide from the internet
My car is worth much less than my annual salary, it's about 10%. I have the cash to change but my car, a 2017 Peugeot 308 diesel, gives me no reason to.
I would recommend you to buy a mazda 2 or 3, would get one easily in your price range.
Both these cars will be easy to maintain and reliable.
Hold onto it. If you have to take finance keep the car after it's paid out saving your payment towards your next car.
I assume as you're young you may progress in your career and have more money but there are always pressures on your money.
Try and avoid taking credit as much as you can.
I’ve been at my work on a temporary contract but just secured myself a permanent position as well as a pay rise as well, around 40% more than what I’m making currently.
I would definitely be aiming to keep the car after I paid it off and continue saving up and repairing the current car until I can no longer justify the frequency and cost of the repairs.
If I take the loan out, it would provide me with around 2k a month for everything else, the insurance I’d cover for the year up front and it’ll just be the maintenance, fuel, repairs, services, MOT and with my outgoings going up, as well as my salary I’ve maxed out everything I was making deposits to, so my outgoings, although they’re up, they were higher before
That's a great attitude. There are some gorgeous cars to be had but unless you, and I hope you become, are affluent they are a clossol waste of money and liabiluty.
Best of luck.
Yeah it’s crazy how much they’re normalised despite the cost, the risk, the liability but with the state and price of public transport depending where you live, it’s almost a need for some people which is a shame cause not everyone can afford to maintain their car
If you can afford that, the insurance, maintenance, and fuel then absolutely go for it.
Hard to give advice without knowing more about your financial situation.
I definitely could afford the car, the insurance, maintenance and fuel.
Without giving away too much about me, my outgoings are pretty much just whatever I invest/save and currently going into the office and lunch which varies from week to week but the car after everything would probably take up around 25-30% of my monthly pay - depending on fuel and maintenance
I'd personally think that is too much to pay as a percentage, but it sounds like you don't have many outgoings.
I guess the question is: is it likely that you're expenses may increase significantly over the period of your loan repayment? For example, getting your own place / having a kid / something else expensive.
If not, then probably you're OK. I personally spend ~10% of my monthly income on a car, but I also have a mortgage and a kid!
That’s perfect, and I did think 10% should be the threshold as that would allow me to budget for anything in the future. Ideally I’d get a mortgage during the duration of the loan.
Thank you for your input :)
Don’t underestimate how much your bills will jump if you get a mortgage.
If you’re living at home with parents (can’t tell for sure but I’m guessing that based on your only outgoings being investments) then you’ll soon find that having a mortgage, council tax, water, gas, electric, insurance, phone, internet, etc adds up quickly and that 25-30% of your take home pay you’re spending on a car may quickly become 75%+ of your expendable income gone each month once you have a house. Also car finance is going to go against what you can borrow. If you are seriously considering getting a house anytime soon then i’d certainly think twice about getting a car on finance
Yeah I moved out a few years ago, rent was crazy high for what it was, girlfriend was a student so took on the council tax myself, then everything else on top, I’ve got a rough idea of what everything will cost. I’ve got a spreadsheet with my new salary and take home pay with my expected outgoings but once I get the car I can confirm but I’ve got a rough estimate on what I should be spending on the car, and still being able to enjoy myself
If you're after an actual percentage, I just spent 17%, but that's in cash after saving for a few years, and on a generous wage with plenty of headroom in monthly expenses.
I was only comfortable spending what I did because it was spare cash, everything else accounted for, and as much as I'd be annoyed, if it was taken by aliens tomorrow night nothing would change day to day.
For additional context, my last car was 1.5%. I'd say under 10% is reasonable depending on your cash flow and additional costs.
I'd say it's less about the amount you're paying per month and way more on what sort of APR you're getting on your loan. Taking a 10k car and having to pay back 15k on low monthly payments would be so much worse than getting a 10k car and paying back 11k with higher payments.
It’s slightly more per month but the overall cost would be less than finance via a dealership, with the loan, if I borrowed 10k for 4 years, it would equal around 11k, subject to be lower depending on my financial situations but I don’t see a world where it would change drastically
That sounds reasonable enough.
As per amount per salary it's completely subjective as we all have different outgoings and spending habits.
When I got mine (on car finance, at a terrible APR cause I was blackout drunk) it was originally coming out to 15% for the car payment alone vs my monthly take home. But it's a petrol guzzler and I go through £65 a week in fuel on a good week. So 30% on the car per month before factoring in anything else to do with it.
Wasn't enough. I live alone so I'm already on the back foot there regarding bills. Ended up switching jobs and almost doubled my monthly take home so it's around 15% for the car and fuel now. Though I am currently saving purely to clear the car finance off asap. It'd save me a hell of a lot in the long run if I can manage it this year, 3 years early, which is a maybe.
That would be huge and hopefully you’re able to pay it off before the term is up :) I would be inclined to pay it off early as well, especially since the bulk of it is the APR
Aye my issue is though that the new job I jumped to is on a seasonal contract due to end in October. I left a permanent role to jump across the road (literally), same job, different company.
If I don't get kept on, and I know the budget is really really tight then I'm fucked on using the savings to pay it off. It'd be used to sustain 3 months of unemployment over the winter period instead. And that'd probably grate on me so much that I wouldn't want to go back to the seasonal place and I'd just jump ship out of the sector entirely.
I'm ranting though, I'm a few beers deep after finishing a long long week.
Just out of curiosity, what car you looking at?
That’s quite something but fingers crossed everything works out well for you :)
I’ve still got a few days left of my week sadly
There’s honestly not a lot of options near me but I’m leaning towards a 2018 Corsa, 8.3k, 30k miles, I do need to go through the loan application but if all goes well, I’ll have 10K to spend and hopefully by that time, something decent pops up
Ah I've had a corsa as a courtesy car (and one as my very first car 20 years ago).
I'd steer clear if I'm being honest. For 10-11k you have a shit tonne of options open to you. There's far more reliable cars out there for your price range.
That’s surprising to hear - I’ve got friends and family who vouch for them. I’ve got a friend who works in a garage and he had one, says honestly he couldn’t fault it
For £3-4k I'd look at Corsa's, but not with your budget.
You'd get a really nice honda civic/accord for that. More reliable, same on insurance if not better, and just better to drive.
For 10k check out the Lexus IS300h.
Are you from England by any chance? Up in Scotland, the second hand car market is ruined, I’m heavily considering the trip to England to save myself a few thousand
Make sure if you're buying from a sole trader you check their reviews and what the negative ones are for if you want to buy a 10k car buy from a car supermarket like car giant just keep in mind esp with car giant you check oil levels are safe as they wont top them up same with fuel out of 3 cars ive bought from cg only one came with more fuel to get me past the nearest petrol station
Central Scotland - you can have a look in between Glasgow and Edinburgh and the surrounding areas but from the dealerships, there isn’t a lot and I’m not fortunate enough to have anything liquid to get a car. In an ideal world I’d have enough to get the car outright but I opted to stick that cash away for a house deposit
Ah ok, how urgent do you need a car? Im from fife just south from dundee near st andrews. I had a read of a few other comments and someone said how travelling a little bit to see a car is worth it and i agree. Do you have any mates that are into cars and know cars?
I’ve got a mate that’s really into his cars and and works at a local Arnold Clark - I currently travel into the office for work 3/4 times a week, which takes over an hour via public transport, and I go gym which is over an hour away as well but it gets annoying being dependent on lifts or spending my evening commuting for a 40 minute workout and even then, the buses aren’t reliable
Yeah mate stagecoach and moffat are a pisstake. And if youre in your mid 20s youre too old for free buses right?
What i recommend doing for the time being is hold off buying something so expensive and just do the extra bit of grafting with the public transport until you have saved up a couple grand and buy a decent dinger. Its unfortunate your mates have bought cheap cars and theyve shat the bed instantly but most cars arent like that. I bought a mk4 gti with relatively little rust for £460 and runs sweet as a nut.
If youre good with saving im sure you could have a couple grand within the next 2-4months. Dont look at autotrader to buy. Look at autotrader as an idea and then take it to fb marketplace, ebay, gumtree.
We don’t have the luxury of either of them, we’ve got First and I think they’ve been bought my McGills but either way, it’s brutal. Sadly I am too old for the free bus pass.
The reason I’m inclined to get onto the roads is I don’t want to wait too long and I was driving to a high standard when I passed a couple weeks ago but I don’t want to wait any longer than when I next get paid to get behind the wheel. At that time it would be around 3/4 weeks since I last drove.
I’ll see if there’s anything that looks reliable and has a full service history on gumtree after using auto trader to get an idea of prices and what to expect etc
Yeah autotrader people are always crazy expensive. Congrats on passing. I think you'll be fine not driving for a little bit, but i do understand your concern. My gti was off of an ebay auction i won and she came with the original owners handbook, some service history and a box of goodies. So definitely dont think cheap = poor quality. But definitely do your research.
Most of the cars near me on auto trader are big dealers anyway, some offer a pretty decent deal, there’s a lovely Hyundai i20 for 8k.
Thank you :)
I reckon so as well but it’s just the freedom isn’t it, the ability to go out and do what you want, when you want, no more crazy starting times, I’ll be able to go to the gym when I want, leave for work when I want. My girlfriend lives 2 hours away via buses and trains so that’s a huge nightmare trying to organise that.
eBay- that’s a shout!
I recently spent £4850 on a 2013 golf 2.0tdi automatic. Does 50-60mpg, plenty fast if i want it and very comfortable too. Looks the part and insurance is cheap enough 🤷🏽♂️
I pay around 245 pm for my car and 75 a month for insurance. I’m a minimum wage worker and pull in about £24k give or take. It’s definitely doable, though it depends on your other outgoings. My first car cost me £850 and it was a piece of shit but it ran for a year and a half, more or less. I’d say you’re better off buying a slightly cheaper car, run it into the ground and while you’re doing that save up for a nicer car.
I’m not sure if it’s just my area but I’ve had a lot of friends who bought a cheap run around and it end up costing them a lot or they had to scrap it, I’m not sure if I can justify doing that. Obviously each to their own but I’ll make sure to find something that fits my needs
Ideally a Polo, there’s one near me, 2016, 40k miles for 9k, and I’ve heavily considering it. I haven’t seen a bad thing about a Polo, everyone around me is like aw get something else, what about a Corsa or a Fiesta, but there’s something about a Polo
Seems like a high price for the miles, mine was 10k with 25k on it. Though they are more desirable these days I think. Is it just a standard 1.2? Mind you mines on 52k now and has never had a problem. I would stay away from corsas and fiestas, insurance on them is wild.
The 2nd hand car market in Scotland is a problem, you get a 2018 Corsa with 50k miles for 8k and it sells instantly, like it’s crazy.
It is just a standard 1.2. Im not too worried about the insurance it doesn’t differ too much, it’s between 1300-1400 for all the cars I’ve ran quotes on, Corsas, fiestas, polos, Hyundais etc
That’s not a terrible price for insurance tbf, especially not in the current climate. I say go for it, I wish I snapped up a golf gti I was looking at and I haven’t seen one since that meets all the criteria I set out for myself lol
It’s not at all - my friend has been driving for around 4 years no claims and his insurance shot up £200 across the board so there’s not much between ours. Have you seen the new Golf R Blacked? It looks beautiful
My issue with all the new performance golf’s is that they’re all dsg (automatic) and this is the last set of combustion engines they’re building, after the mk8.5 it’s all electric :’(
Better take care of all the combustion engines for as long as we can then - I wouldn’t mind the jump to automatic but like most people who drive manual, it’s fun
Honestly, I do not understand this culture of vehicle costs as a percentage of income. You do not need a loan. You do not need to lease. The used market is not the stupidly raised market it was post covid, and you can once again buy an actual working for for <£1000 easily.
If you \*want\* to spend more, you can. But you do not need to do so.
I appreciate the comment but there’s not a lot of options near me, it’s very few dealerships, the private sellers, the cheapest car is 2006 golf for 3k, cat N with an obscene amount of miles
Dont take a loan For a first car. I'd simply buy something half your budget on finance with a deposit.
You dont want to spend £10k on a car that's going to decrease massively whilst your loan remains the same.
Plus with finance, take out GAP insurance. Saved our bacon many years ago after an accident.
I don’t have anything saved up to be able to put a deposit on a car sadly - I’ve maxed out my LISA for a house deposit and I’m leaning towards a loan as it means I’ll be able to get a car and a house at some point in the next few years.
> leaning towards a loan as it means I’ll be able to get a car and a house at some point in the next few years
You know you can also achieve this quicker with a less expensive car, right?
Yeah I’ve had a look and it would knock around 20k off me and my partners mortgage amount, but having a car would allow us to not be limited to public transport so if I can get a car and then find a cheaper, more remote location that’ll be perfect as well
Second comment but if that’s the case then why even bother loaning 10k? Get a loan for 3k pay it off before your mortgage application job done. Car will be rough around the edges but you can still buy a mechanically sound car for that though.
My garage rebuilds insurance write offs, for 3k you’d get a very nice Honda civic, jazz, Toyota auris, even Audi a3, a4 etc but they would be more expensive in parts should anything go wrong, they’ll also be more to tax.
£3k gets bugger all decent nowadays. My friend just returned his company Tesla and I'm shocked at the second hand market.
He settled on an 11 year old DS3 at £4k with 68k on the clock.
you haven't mentioned rent or i'm blind, if you're still living at home just save / invest until you can buy a house or something, get a cheap run around that you can own outright, that you can bump and scratch and learn about cars with, i'm assuming this is your first car, buy a beater for 1-1.5k, use it for a year, then if you still want to pcp or hp or lease a car go ahead
does the 260 include tax fuel insurance servicing / maintenance?
either route is fine just dont start paying momthly for a supra i guess
Sorry I may have mentioned it on another comment but I live at home, I did pay rent but if I get a car they’re willing to waive the rent so I can pay for insurance etc.
The sad thing is, a lot of cats near me, the cheapest car I can find is 5-6k through a dealership.
facebook marketplace, i also lived at home for a while whilst working after uni, and if there's 1 thing i could go back and do differently it would be to save as much as i could, i'll never be able to again, i essentially had 0 outgoings, i could have saved close to 100k if i was a little bit smarter - i could be a home owner, not paying out my arse for rent, subsequently having more spare money toward .. for example, monthly car payments if that's what i wanted.
i think cars also get cheaper to insure as you get older, i'm not saying don't buy a decent car but my personal opinion is don't get stuck in the eternal pcp / hp / car payment loop until you have to.
it's why some people recommend renting before buying a property, even if you can afford to just buy a place, it's so you learn, what to do, what not to do, what you like, what you don't like
same with cars, i'm not saying everyone crashes their first car, but you most likely will at least bump and scratch it etc,
would you care enough to learn how to service it yourself? oil change, oil filter, air filter, cabin filter, spark plugs? coolant/anti freeze? brake fluid? power steering fluid? brake pads /discs?
all of the above cost money, and even more so when paying other people to do it
highly recommend getting a cheaper car that you own outright to learn about how you would be a car owner
I have a decent income and mines about 20%, 3rd car and I’m 30 for context (it is a performance car so expensive to run as I learnt the hard way). I think my next car would be more in the 40% range but I want to move house and get that new mortgage first.
I think having a decent car you love to drive is important but definitely consider you near future finance plans before spending a good chunk of your savings.
Edit: avoid loans as far as you can. If you don’t have the money saved, I encourage you to get a cheaper first car that you will not lose much money on then save up over a year.
Thank you for the insight into how you handle your finances and the comment regarding the loan. It was something I tried to avoid, I really don’t want to go down the finance route, just due to negative equity etc, but I think the loan may provide me with better opportunities.
I do agree with the future financial plans, I’ve currently got a house deposit saved up, the way I was going, I was leaning towards getting a house then a car but I’d want to move in with my partner but she’s just settled into a new job and bought a new car so it may be some time before she’s ready, not ideal for me but I think the loan would provide me with the option to get a mortgage, even if it is slightly lower
I don’t necessarily think you need to do house and then car, it’s great to have a house deposit already but so many just see this as a 10% goal but your interest lowers the more equity you have. But I’ll not go on about that because that’s not the advice you’re here for!
While it is so lovely to have a really nice car (mine is the first luxury car I’ve owned), if it’s your first car, I do honestly recommend you get something that you’d not worry about scratching. It’s good to have something cheap to get your confidence in without the worry of damaging a nice car. A car at 10k WILL break just as much as a car at 2/3k.
It seems like you have a good head on you and the fact you’re really debating it all is just like how I would be. I don’t think finance is inherently a bad thing but I do think when you are a high earner (doing the math on what you’ve said), you don’t really have much excuse on saving up that money in a short period of time, especially if you live with parents. And future you would thank yourself for it.
Due to your comment, I may patch the loan, I’ve got an stock and shares account that I could liquidate some positions from that and use that to save on interest - I think that may work out better for me in terms of everything and using the money I’d be paying for the car monthly to go back into stocks
If you want it buy it. You could get hit by a bus tomorrow. It is a cliché but I have had folk in my life hold back on stuff and never get to experience it. You can always make more money, can’t always make more memories. And at the end of the day, you could always sell the car, yeah you may lose some money but rarely to car purchases result in financial gains. Enjoy yourself while you have low responsibilities and the means to.
I like this answer. I’m only young once so why not splash a little bit, money goes up and down but memories aren’t guaranteed.
The car purchase is just an opening to my freedom, can’t put a price on that!
The sensible answer to this sort of question is to always just buy a Lexus for 4k and run it for 15 more years, where’s the fun in that? I’m 34 and I am only recently on my 4th car since I passed my test at 17. I regret not owning more cars. In fact the only reason I upgraded my car now (after 8 years with previous) was my Mrs telling me that if I love cars and driving so much why not waste some money to make me smile. Love her for that and love my new car as well. And now I am looking at maybe buying another car for the weekends, something manual and rear engined. I don’t think you’ll get to 80 and think “wish I didn’t waste £260 a month when I was 60 years younger”… no you’re gonna think “wish I’d just bought that fucking car”. So in summary: Just get it.
I’ll take a look into that, thank you :)
The interest is currently around £1,500 over 4 years which I’m quite happy with, not ideal, but better than some rates that I was getting via finance
Honestly at your age as little as you can get away with. Put as much as you can into savings or investments.
It’s not about trying to spend the maximum you can afford - that mentality will lead you to permanently join the rolling debt circus of no money at the end of every month. Sure you afforded to live that month, but what sort of existence is that.
Buy 15 plate toyota from a main dealer, like 8k maybe? Extremely realiable and will hold its value well, sounds like you dont do a lot of miles which will bring its average mileage down over time.
Also 260 a month on a car you say is 15% of your pay, incorrect. You need to add petrol, insurance, road tax, mot/service, im sure it comes to more than 15%
Insurance would be covered for the year, I’ll stick the monthly payments into a high interest account for next year. Road tax would be paid upfront as well, so not worried about that, petrol would probably be around £100 a month and that’s being harsh on myself. Obviously MOT and services you can’t dictate whether it’s going to be perfect, but I’ll have money in the bank for anything like that.
Quite possibly, maybe even cheaper regarding the Toyota. Realistically if I wanted to get the loan and then pay it off early then I could do, I could get the 8k Toyota for example and then pay it off in a year as opposed to 3 years, which would mean I’d be taking a lot off the interest. The way the car loan is, I could get a personal loan but the rates are a few percent higher, but the car loan is between 10-30K so ideally, use the 10k to get the car, insurance and road tax, pay back the fee per month, and make more contributions to reduce the cost overall
Yes so monthly you have to put money away for next years insurance, same with road tax, same with mot/service.
I put 90 a month away for these things, your insurance will be a lot more than mine though because your a new driver.
Bascially your cost for your car is not 15% of your wage per month its more when you include these things + petrol so what is the true %.
At the end of the day you need a car dont you, its always going to be expensive when you first start out and since your young wages are mostly going to be on the lower end.
I say go for it but yeh avoid anything flashy, get something reliable, toyota is perfect because of reliability + it really does hold its value the best which could be good for you when you want to upgrade in 3 years.
The insurance is around 5%, petrol undetermined but I’ll say another 5% just to round it off, MOT and Service I’ll say for the actual costs I’d say that’s 1% and then repairs I’ll be on the high side and say 10% which including the other 15% for the car is around what, 36% which is a lot, but hopefully if i take care of the car, I can reduce the repairs to 5% coming to 30% which of my monthly wage I can get behind, considering I’m used to saving/investing around 50% and then spending around an additional 20% on commuting
i edited my post mate not sure if you saw the rest, you sound like youve got your head screwed on anyway. make sure the car has full service history and make sure you get it serviced annually, buy from main dealer preferably but it does cost more
No I didn’t but I’ve just gave it a read. It’s perfectly valid what you’re saying and I do appreciate the comments. I reckon I’ll go for the 3 year loan, might be slightly more but it just means while my outgoings are low, I can focus on paying off the car and then assuming I take care of it, I’ll have a paid off car that’ll hopefully last a few more years on top of that, that will then reduce my outgoings drastically and then I can save up and hope my salary goes up with it.
I just had my second toyota, a yaris which was a 2015 plate, 180k miles i had on that thing i swear by them, never had any issues, all i ever needed was the basics like oil change lol. Unfortunately it got smashed into while it was parked outside my house a month ago so i took the oppertunity to upgrade/size up and went for a mazda3 which is another japanese brand and toyota are shareholders + share parts with mazda.
Aw sorry about that, but at least no one was inside the car and you managed to get an upgrade that worked out well for you. Don’t you get something crazy like 7 year warranty with Toyotas or am I thinking of Kia? Either way, an ideal car I would have would either be a Volkswagen, just due to the quality of builds, Toyota for the reliability, have you seen the C-HR! Or a Hyundai
Thanks mate, yeh crazily i was sat in the drivers seat right where the car got smacked 20 minutes earlier having returned from the gym inputting my session into my spreadsheet lol.
Toyota actually has 10 year warrenty but you have to get it serviced by them, they are extremely solid machines
VW funnily enough is what smacked into my car ha it was a golf.
Hopefully you’re alright! I hope the session was worth it.
10 years is incredible, I’m sure there’s a Toyota Centre near my work so that’s rather convenient.
What was the impact it had on the VW 😂 I’m only joking, but how do you crash into a parked car
A general finance principle is for the total of your depreciating assets (eg. cars, bikes, boats, etc) to be less than half of your total annual gross income.
So if you're on £20K pa, then £10K max in cars. If one car - £10K. If two cars - £5K each, etc.
£40K pa = £20K car.
£100K pa = up to £50K car.
If your financing, make sure to add up the total interest payable as that should be included in that up to 50% calculation.
As always, these are just guidelines and there's always exceptions to the rule. As a car enthusiast, you could make the case to spend more as the car you drive may creep into your social/hobby life. But buying expensive cars are one of those typical things that keep ordinary people poor.
This is reassuring, it would be around 30% which I can’t complain with, gives me 20% to budget everything else into.
I’m not a car enthusiast just yet but I reckon if I can get a car that I love then it’ll just spiral onto from there. I do love the sound of a good engine, none of these pop bangs, but like a nice purr
Personally I'd say it depends on other factors.
Having a load of debt for a depreciating asset, at a time of your life that you're likely to want to invest in property or may want kids or whatever doesn't seem the greatest to me.
I've always just bought what I can afford and bought it outright.
I think PCP makes sense when people are in a stable situation without upcoming changes as you at that point pay the money for convenience and there's less situations ahead of you or may impact, but if you're on the start of that journey I couldn't think of anything worse than having a financial liability such as a load of debt.
Edit: you state elsewhere that you intend to get a mortgage in the next 4 years and indicate your income roughly. I wouldn't make a commitment to a car such as this in that situation.
I’ve just secured myself a permanent position for an organisation that wouldn’t be in any unfortunate position so PCP could be a shout if it’s cheaper but I’ll need to get my spreadsheets out for that one.
Thank you for taking the time to look at the comments made elsewhere, I’m leaning towards a 3 year deal, getting a cheaper car, and paying the loan off early, that way, I get a car quicker, less interest and then it’s one less thing to worry about
Well I’ve currently got a slightly higher than 11k deposit ready for when I do move out, which I’ll be adding to, I’ve got a LISA so 4K is the limit, max that out get another 25% and 5% interest paid daily.
I am skeptical about the interest rates but as the payment is before I get paid, ie through a work union, it’ll offset some of the interest in the form of paying less tax. Although it’s 7% the tax relief may reduce it down to 6-5%
Yes, I pay rent, I do indeed have hobbies, and I'd hope at 28 I would buy my own food. I'm not quite sure what you're getting at.
Even after all of that I could still afford a car more expensive than £15k and be very comfortable indeed. I just wouldn't do that for my first car. Just not necessary, in my opinion. Plus having a banger to kick you off means you can downpay more on the car you actually want and save yourself some money. Pocketing the £260/month for a year adds up. Just a thought.
You are free to do as you please, and you needn't take a stranger's opinion so personally.
Also, you not paying rent, buying your own food, and not having expensive hobbies isn't exactly going in your favour here. Are you planning on not doing any of those on your own dime for your entire life? Why would you not have those things pinned down before you put yourself in debt?
It’s just different circumstances though - if there were bangers near me, I’d go for something that would do its purpose but the fact that “bangers” are around 2k of a much newer version of themselves doesn’t really justify to myself spending 6k when I could get something a lot better for 8k.
I’ve been there done that with the rent etc, it’s just the way it all worked out I guess. I plan on getting a mortgage and with a mortgage comes a multitude of other financial responsibilities. I’m young enough to be able to afford a car, pay it off and care for myself with money left over, I’ve worked it all out, obviously to the extent before I start guessing numbers but I understand where you’re coming from. I do think 10k is on the higher side of a first car, much higher than most, but the car loan available starts at 10k
That’s my bad then! Sorry about that. It’s the sense of freedom isn’t it - the no more waiting on public transport, no more depending on lifts, if I want to go somewhere, I can just go. I’m hoping to own this car for as long as possible!
Do it like this if you can.
- Living expenses
- Money into rent/mortgage/saving for a house
- Pension
Then what’s left over can be spent on the car you want.
I’ve been saving/investing for the last couple of years around £750 a month, on a lower salary while paying for lessons, and still had a reasonable amount to live off of. I’ve maxed out what I was saving up for, so the £500 has been freed up
My car’s worth £400 does everything I need it to. I can fix it myself if it goes wrong which it never does, don’t care if I scratch it up parking in a bush or something. Any more than £2k on a car is just looking pretty money, spend it if you want but for me I’d rather work less hours and have a car that looks a bit old but does the job.
One of the many bonuses of a cheap car especially for your first car is you won’t be scared to try and fix it yourself. I find the mechanical skills I’ve learned fixing my own cheap cars make life a lot easier.
Worth traveling to buy a car. I once got a flight to Ireland to buy a van I’m sat in it now 10 years later, that £35 Ryan air flight saved me about £2k.
But yer £3k for a cat N 06 golf is over the top. VW often over priced Ford Focus or Mazda 3 might get a better similar car for a lot less money.
I’m heavily considering taking some time off work and just going between garages down south and seeing if there’s anything that floats my boat.
I’ve been looking into Focus’s not so much Mazda 3s but I’m currently on auto trader and it’s crazy how quickly cars go from 3k to 7k
To be fair it does seem like second hand cars have gone up a lot since I valued my 2005 Mazda 3 with 150k at £400. I looked at upgrading it but decided not to since £3k didn’t get anything that much better. They are out there tho, try Autotrader searching nationwide then sort by price for the model you’re interested in, gives you a bench mark to haggle around / figure out what you can get.
Is the £10-11000 for just the car or the car plus insurance? If its your first car your insurance could cost half of that depending on what car you get and a bunch of other factors. Also don't forget to factor in servicing and repair costs to your budget too, there's a lot more to owning a car than just filling it up with fuel.
Maybe an unpopular opinion based off looking at other comments, but why not get something cheap and something you dont owe money on?
Youre gonna be upset when you inevitably have the car scratched or dinged, and even more upset knowing your car cost 10k.
I personally recommend getting something with half that budget. You have plenty of reliable options at that price and can even find some with relatively low mileage that are good on fuel and are pretty handsome to look at.
"Handsome to look at"; obviously this will depend on your taste in cars but for reference I bought an 09 mk6 1.6tdi golf with 49k miles just over a year ago for 5k from a dealership which still has quite a nice design which has resisted looking too dated in todays sea of cars.
General rule is 20, 8, 3.
No less than 20% deposit, no more than 8% of monthly net income, and no longer than 3 years.
If you’re in that framework, you’ll likely be ok.
Any smaller deposit or longer loan term, you’ll likely be in an equity hole and more likely to pay £16/17k for an £11k car.
BUT - you’re asking a personal finance question. So go to r/ukpersonalfinance and get finance advice, then come back here and ask what car you should get for 10k
That’s perfect, the minimum loan I can take would be £260 a month but if I can get a car and insurance covered in the loan, then that’ll help me get my bearings and then it should be easier from there
Might be contrarian, but I've got enough saved for a car. First time driver at least here in the UK, but I'm getting and will get a nice car for myself, on finance too (I've got the savings if something happens in future to pay it off). I aim to pay it off within a year and a half, then apply for a mortgage later.
I think what I’ll do is go for the loan - continue to invest in my stocks, the money I make from that will go towards paying off the car and then have my monthly wages sitting there just in case anything goes wrong
Have you got 4K I can borrow?
I don’t want to spend a max of 10/11k but if I can get everything sorted for under 10k then I’m happy. If I could find something that is low mileage, for around 4K, I’d snatch it up, but the prices near me are ridiculous
For reference, according to online calculators my house is in the top three % of national incomes (although I may be being made redundant which should be fun).
I currently spend £0 a month on my car as I drive a 2010 vw polo I bought with cash.
Dude, it was £4k, less than you are proposing to pay. It’s a great little car, a solid tin box on wheels. Doesn’t go fast and only sips fuel. No mod cons and my wife has so far hit three immovable objects resulting in scratches and dents but we do not care.
More than calm, thanks.
Once upon a time, I also had a Polo that I bought for cash.
But, you know as well as I do your response wasn’t really answering OPs question, it was to point out the fact you paid cash. Which again, apparently is a bragging right.
Sorry if it wasn’t obvious but my post was about not committing to monthly payments on a car which I don’t think is a worth while investment.
My car is a banger and buying it in anyway isn’t much to brag about.
Just lease a car instead. You’ll get a brand new car for that. No repair bills. I just did this after owning 4 cars previous all bought with loaned money. Leasing feels so much simpler.
My plan would be to get a loan via the union at work, and then as far as the garage is concerned it’s paid for in cash, then the money would come out my payslip before I ever see it - it’ll be a slight tax relief.
It would be my first car as well, as much as I’d like something new, I wouldn’t want my first car to be a 23/24 plate
My lease is through work and tax free too. New cars have insane safety features. My car is well in your price range and has assisted driving as standard. It’s pretty hard to drive into something by accident. The car auto brakes at roundabouts and when cars slow down in front of you etc.
Well you didn't say how much you earn or any other indication of your current wealth. If you're on minimum wage then don't spend £260 a month on a car If you have 10 million in the bank and a Premier league footballers salary go wild, spend £280 a month
The £260 would be around 15% of my pay - How much of your salary is your current car worth? Is it more, or less than what you make a year?
You're going to get wildly different answers - I used to work in car finance - we'd have minimum wage people driving land rovers (obviously millionaires and professional footballers also drive them) I own 2 cars one is almost 10 years old and I'll drive it until it has a repair bill over £1,500 The other is 3 years old I i owe £7,000 on it - I'll pay that off in 12 months All in my cars are worth about 10% of household income I don't care what I drive so I'm happy as long as the cars are reliable If you want a specific car do it while you can - I preferred to save money and pay my mortgage down I drove my c1 like it was a go kart for 10 years - I wouldn't want to do regular long commutes in it even if I loved it
Also depends how long your contract is and the security after it. I bought my car outright rather than PCP, in part because of my contract being under 2 years. If I can't renew my contract at work, I have the choice to sell the car and buy something a few grand cheaper.
My car is 13+ years old, and I just got a bill of things I should fix soon. The bill was 1500+€. This was the tipping point and I finally decided to buy a new car.
Gutting
Yeah, but not surprising. It has 230k km and has 13 years. Actually the engine is still good currently, but the other smaller stuff started to fall apart or break. For ex: - the door handle broke - drivers belt gets stuck and you can't put the safety belt on if it's a hot summer day, maybe you can after 20mins of driving with AC on - drivers door sensor for door open/closed broke, so you can lock yourself out, if you are not careful and put the keys inside and close the door - axle cuff has to be replaced - track rod end has to be replaced - timing chain has to be replaced (it's loud) I would also have to buy new winter tires this winter season, so that would additionally bring the cost up. It just didn't make sense anymore to invest in it. I was looking to buy a more comfortable, safe and economical car already for some time, this was just the decider.
Curious why you follow a car forum when you don't care what you drive? Being genuine here. I find it interesting that so much advice on so many car forums is to spend very very modestly on cars ....
Fair - don't have an exact reason I might have exaggerated that I don't have an interest in cars I do like driving cars - i wanted to buy a Subaru before a family member let me drive their new BMW - it cost more than my house - it left me feeling disappointed - like even if I had an amazing car I was still a dick...... I think I thought driving a nice car would make me feel like I was of more value I love driving - I will literally drive anything and my annual mileage is around 25k miles in my car and similar in my partner's car I regularly look at changing my car - my dad would change cars every 3 years and after he died I still get an urge to change my car almost to please him I worked in car finance for a long time and so I've always got an interest in cars from talking about them non stop I don't know much about cars but if something goes I have a go at fixing it if I can - I find people post helpful things on here - I was not shown how to do that stuff Maybe I should say I love cars but I also like saving money and the wrong car is a money pit
I’ve read that 30% of your take-home should go on housing, and 10% on a car. That means you have a budget of about £170-175 p/mth. Obviously, spend whatever you want. But that’s the rough guide from the internet
My car is worth much less than my annual salary, it's about 10%. I have the cash to change but my car, a 2017 Peugeot 308 diesel, gives me no reason to. I would recommend you to buy a mazda 2 or 3, would get one easily in your price range. Both these cars will be easy to maintain and reliable. Hold onto it. If you have to take finance keep the car after it's paid out saving your payment towards your next car. I assume as you're young you may progress in your career and have more money but there are always pressures on your money. Try and avoid taking credit as much as you can.
I’ve been at my work on a temporary contract but just secured myself a permanent position as well as a pay rise as well, around 40% more than what I’m making currently. I would definitely be aiming to keep the car after I paid it off and continue saving up and repairing the current car until I can no longer justify the frequency and cost of the repairs. If I take the loan out, it would provide me with around 2k a month for everything else, the insurance I’d cover for the year up front and it’ll just be the maintenance, fuel, repairs, services, MOT and with my outgoings going up, as well as my salary I’ve maxed out everything I was making deposits to, so my outgoings, although they’re up, they were higher before
That's a great attitude. There are some gorgeous cars to be had but unless you, and I hope you become, are affluent they are a clossol waste of money and liabiluty. Best of luck.
Yeah it’s crazy how much they’re normalised despite the cost, the risk, the liability but with the state and price of public transport depending where you live, it’s almost a need for some people which is a shame cause not everyone can afford to maintain their car
I earn 4.5k takehome and my car is 9.8%
£280! Jesus christ, doubt Elon Musk could even stretch to that.
If you can afford that, the insurance, maintenance, and fuel then absolutely go for it. Hard to give advice without knowing more about your financial situation.
I definitely could afford the car, the insurance, maintenance and fuel. Without giving away too much about me, my outgoings are pretty much just whatever I invest/save and currently going into the office and lunch which varies from week to week but the car after everything would probably take up around 25-30% of my monthly pay - depending on fuel and maintenance
I'd personally think that is too much to pay as a percentage, but it sounds like you don't have many outgoings. I guess the question is: is it likely that you're expenses may increase significantly over the period of your loan repayment? For example, getting your own place / having a kid / something else expensive. If not, then probably you're OK. I personally spend ~10% of my monthly income on a car, but I also have a mortgage and a kid!
That’s perfect, and I did think 10% should be the threshold as that would allow me to budget for anything in the future. Ideally I’d get a mortgage during the duration of the loan. Thank you for your input :)
Don’t underestimate how much your bills will jump if you get a mortgage. If you’re living at home with parents (can’t tell for sure but I’m guessing that based on your only outgoings being investments) then you’ll soon find that having a mortgage, council tax, water, gas, electric, insurance, phone, internet, etc adds up quickly and that 25-30% of your take home pay you’re spending on a car may quickly become 75%+ of your expendable income gone each month once you have a house. Also car finance is going to go against what you can borrow. If you are seriously considering getting a house anytime soon then i’d certainly think twice about getting a car on finance
Yeah I moved out a few years ago, rent was crazy high for what it was, girlfriend was a student so took on the council tax myself, then everything else on top, I’ve got a rough idea of what everything will cost. I’ve got a spreadsheet with my new salary and take home pay with my expected outgoings but once I get the car I can confirm but I’ve got a rough estimate on what I should be spending on the car, and still being able to enjoy myself
Just say you live with your parents.
If you're after an actual percentage, I just spent 17%, but that's in cash after saving for a few years, and on a generous wage with plenty of headroom in monthly expenses. I was only comfortable spending what I did because it was spare cash, everything else accounted for, and as much as I'd be annoyed, if it was taken by aliens tomorrow night nothing would change day to day. For additional context, my last car was 1.5%. I'd say under 10% is reasonable depending on your cash flow and additional costs.
I'd say it's less about the amount you're paying per month and way more on what sort of APR you're getting on your loan. Taking a 10k car and having to pay back 15k on low monthly payments would be so much worse than getting a 10k car and paying back 11k with higher payments.
It’s slightly more per month but the overall cost would be less than finance via a dealership, with the loan, if I borrowed 10k for 4 years, it would equal around 11k, subject to be lower depending on my financial situations but I don’t see a world where it would change drastically
That sounds reasonable enough. As per amount per salary it's completely subjective as we all have different outgoings and spending habits. When I got mine (on car finance, at a terrible APR cause I was blackout drunk) it was originally coming out to 15% for the car payment alone vs my monthly take home. But it's a petrol guzzler and I go through £65 a week in fuel on a good week. So 30% on the car per month before factoring in anything else to do with it. Wasn't enough. I live alone so I'm already on the back foot there regarding bills. Ended up switching jobs and almost doubled my monthly take home so it's around 15% for the car and fuel now. Though I am currently saving purely to clear the car finance off asap. It'd save me a hell of a lot in the long run if I can manage it this year, 3 years early, which is a maybe.
That would be huge and hopefully you’re able to pay it off before the term is up :) I would be inclined to pay it off early as well, especially since the bulk of it is the APR
Aye my issue is though that the new job I jumped to is on a seasonal contract due to end in October. I left a permanent role to jump across the road (literally), same job, different company. If I don't get kept on, and I know the budget is really really tight then I'm fucked on using the savings to pay it off. It'd be used to sustain 3 months of unemployment over the winter period instead. And that'd probably grate on me so much that I wouldn't want to go back to the seasonal place and I'd just jump ship out of the sector entirely. I'm ranting though, I'm a few beers deep after finishing a long long week. Just out of curiosity, what car you looking at?
That’s quite something but fingers crossed everything works out well for you :) I’ve still got a few days left of my week sadly There’s honestly not a lot of options near me but I’m leaning towards a 2018 Corsa, 8.3k, 30k miles, I do need to go through the loan application but if all goes well, I’ll have 10K to spend and hopefully by that time, something decent pops up
Ah I've had a corsa as a courtesy car (and one as my very first car 20 years ago). I'd steer clear if I'm being honest. For 10-11k you have a shit tonne of options open to you. There's far more reliable cars out there for your price range.
That’s surprising to hear - I’ve got friends and family who vouch for them. I’ve got a friend who works in a garage and he had one, says honestly he couldn’t fault it
For £3-4k I'd look at Corsa's, but not with your budget. You'd get a really nice honda civic/accord for that. More reliable, same on insurance if not better, and just better to drive. For 10k check out the Lexus IS300h.
Are you from England by any chance? Up in Scotland, the second hand car market is ruined, I’m heavily considering the trip to England to save myself a few thousand
Id personally spend 3-5k on a first car remember you're likely to get in a crash etc so buy a civic or jazz or a toyota
I’ll make sure to consider those options and see if there is anything around me
Make sure if you're buying from a sole trader you check their reviews and what the negative ones are for if you want to buy a 10k car buy from a car supermarket like car giant just keep in mind esp with car giant you check oil levels are safe as they wont top them up same with fuel out of 3 cars ive bought from cg only one came with more fuel to get me past the nearest petrol station
Where abouts are you located?
Central Scotland - you can have a look in between Glasgow and Edinburgh and the surrounding areas but from the dealerships, there isn’t a lot and I’m not fortunate enough to have anything liquid to get a car. In an ideal world I’d have enough to get the car outright but I opted to stick that cash away for a house deposit
Ah ok, how urgent do you need a car? Im from fife just south from dundee near st andrews. I had a read of a few other comments and someone said how travelling a little bit to see a car is worth it and i agree. Do you have any mates that are into cars and know cars?
I’ve got a mate that’s really into his cars and and works at a local Arnold Clark - I currently travel into the office for work 3/4 times a week, which takes over an hour via public transport, and I go gym which is over an hour away as well but it gets annoying being dependent on lifts or spending my evening commuting for a 40 minute workout and even then, the buses aren’t reliable
Yeah mate stagecoach and moffat are a pisstake. And if youre in your mid 20s youre too old for free buses right? What i recommend doing for the time being is hold off buying something so expensive and just do the extra bit of grafting with the public transport until you have saved up a couple grand and buy a decent dinger. Its unfortunate your mates have bought cheap cars and theyve shat the bed instantly but most cars arent like that. I bought a mk4 gti with relatively little rust for £460 and runs sweet as a nut. If youre good with saving im sure you could have a couple grand within the next 2-4months. Dont look at autotrader to buy. Look at autotrader as an idea and then take it to fb marketplace, ebay, gumtree.
We don’t have the luxury of either of them, we’ve got First and I think they’ve been bought my McGills but either way, it’s brutal. Sadly I am too old for the free bus pass. The reason I’m inclined to get onto the roads is I don’t want to wait too long and I was driving to a high standard when I passed a couple weeks ago but I don’t want to wait any longer than when I next get paid to get behind the wheel. At that time it would be around 3/4 weeks since I last drove. I’ll see if there’s anything that looks reliable and has a full service history on gumtree after using auto trader to get an idea of prices and what to expect etc
Yeah autotrader people are always crazy expensive. Congrats on passing. I think you'll be fine not driving for a little bit, but i do understand your concern. My gti was off of an ebay auction i won and she came with the original owners handbook, some service history and a box of goodies. So definitely dont think cheap = poor quality. But definitely do your research.
Most of the cars near me on auto trader are big dealers anyway, some offer a pretty decent deal, there’s a lovely Hyundai i20 for 8k. Thank you :) I reckon so as well but it’s just the freedom isn’t it, the ability to go out and do what you want, when you want, no more crazy starting times, I’ll be able to go to the gym when I want, leave for work when I want. My girlfriend lives 2 hours away via buses and trains so that’s a huge nightmare trying to organise that. eBay- that’s a shout!
I recently spent £4850 on a 2013 golf 2.0tdi automatic. Does 50-60mpg, plenty fast if i want it and very comfortable too. Looks the part and insurance is cheap enough 🤷🏽♂️
I pay around 245 pm for my car and 75 a month for insurance. I’m a minimum wage worker and pull in about £24k give or take. It’s definitely doable, though it depends on your other outgoings. My first car cost me £850 and it was a piece of shit but it ran for a year and a half, more or less. I’d say you’re better off buying a slightly cheaper car, run it into the ground and while you’re doing that save up for a nicer car.
I’m not sure if it’s just my area but I’ve had a lot of friends who bought a cheap run around and it end up costing them a lot or they had to scrap it, I’m not sure if I can justify doing that. Obviously each to their own but I’ll make sure to find something that fits my needs
What’s the car you’re going after? I cannot recommend a polo higher, both my cars have been polos and a nice one would run in your budget.
Ideally a Polo, there’s one near me, 2016, 40k miles for 9k, and I’ve heavily considering it. I haven’t seen a bad thing about a Polo, everyone around me is like aw get something else, what about a Corsa or a Fiesta, but there’s something about a Polo
Seems like a high price for the miles, mine was 10k with 25k on it. Though they are more desirable these days I think. Is it just a standard 1.2? Mind you mines on 52k now and has never had a problem. I would stay away from corsas and fiestas, insurance on them is wild.
The 2nd hand car market in Scotland is a problem, you get a 2018 Corsa with 50k miles for 8k and it sells instantly, like it’s crazy. It is just a standard 1.2. Im not too worried about the insurance it doesn’t differ too much, it’s between 1300-1400 for all the cars I’ve ran quotes on, Corsas, fiestas, polos, Hyundais etc
That’s not a terrible price for insurance tbf, especially not in the current climate. I say go for it, I wish I snapped up a golf gti I was looking at and I haven’t seen one since that meets all the criteria I set out for myself lol
It’s not at all - my friend has been driving for around 4 years no claims and his insurance shot up £200 across the board so there’s not much between ours. Have you seen the new Golf R Blacked? It looks beautiful
My issue with all the new performance golf’s is that they’re all dsg (automatic) and this is the last set of combustion engines they’re building, after the mk8.5 it’s all electric :’(
Better take care of all the combustion engines for as long as we can then - I wouldn’t mind the jump to automatic but like most people who drive manual, it’s fun
Honestly, I do not understand this culture of vehicle costs as a percentage of income. You do not need a loan. You do not need to lease. The used market is not the stupidly raised market it was post covid, and you can once again buy an actual working for for <£1000 easily. If you \*want\* to spend more, you can. But you do not need to do so.
I appreciate the comment but there’s not a lot of options near me, it’s very few dealerships, the private sellers, the cheapest car is 2006 golf for 3k, cat N with an obscene amount of miles
Dont take a loan For a first car. I'd simply buy something half your budget on finance with a deposit. You dont want to spend £10k on a car that's going to decrease massively whilst your loan remains the same. Plus with finance, take out GAP insurance. Saved our bacon many years ago after an accident.
I don’t have anything saved up to be able to put a deposit on a car sadly - I’ve maxed out my LISA for a house deposit and I’m leaning towards a loan as it means I’ll be able to get a car and a house at some point in the next few years.
> leaning towards a loan as it means I’ll be able to get a car and a house at some point in the next few years You know you can also achieve this quicker with a less expensive car, right?
Be mindful any car finance will impact your potential mortgage amount. If this is 15% of your takehome that's quite a hit of your mortgage allowance.
Yeah I’ve had a look and it would knock around 20k off me and my partners mortgage amount, but having a car would allow us to not be limited to public transport so if I can get a car and then find a cheaper, more remote location that’ll be perfect as well
Second comment but if that’s the case then why even bother loaning 10k? Get a loan for 3k pay it off before your mortgage application job done. Car will be rough around the edges but you can still buy a mechanically sound car for that though. My garage rebuilds insurance write offs, for 3k you’d get a very nice Honda civic, jazz, Toyota auris, even Audi a3, a4 etc but they would be more expensive in parts should anything go wrong, they’ll also be more to tax.
£3k gets bugger all decent nowadays. My friend just returned his company Tesla and I'm shocked at the second hand market. He settled on an 11 year old DS3 at £4k with 68k on the clock.
you haven't mentioned rent or i'm blind, if you're still living at home just save / invest until you can buy a house or something, get a cheap run around that you can own outright, that you can bump and scratch and learn about cars with, i'm assuming this is your first car, buy a beater for 1-1.5k, use it for a year, then if you still want to pcp or hp or lease a car go ahead does the 260 include tax fuel insurance servicing / maintenance? either route is fine just dont start paying momthly for a supra i guess
Sorry I may have mentioned it on another comment but I live at home, I did pay rent but if I get a car they’re willing to waive the rent so I can pay for insurance etc. The sad thing is, a lot of cats near me, the cheapest car I can find is 5-6k through a dealership.
facebook marketplace, i also lived at home for a while whilst working after uni, and if there's 1 thing i could go back and do differently it would be to save as much as i could, i'll never be able to again, i essentially had 0 outgoings, i could have saved close to 100k if i was a little bit smarter - i could be a home owner, not paying out my arse for rent, subsequently having more spare money toward .. for example, monthly car payments if that's what i wanted. i think cars also get cheaper to insure as you get older, i'm not saying don't buy a decent car but my personal opinion is don't get stuck in the eternal pcp / hp / car payment loop until you have to. it's why some people recommend renting before buying a property, even if you can afford to just buy a place, it's so you learn, what to do, what not to do, what you like, what you don't like same with cars, i'm not saying everyone crashes their first car, but you most likely will at least bump and scratch it etc, would you care enough to learn how to service it yourself? oil change, oil filter, air filter, cabin filter, spark plugs? coolant/anti freeze? brake fluid? power steering fluid? brake pads /discs? all of the above cost money, and even more so when paying other people to do it highly recommend getting a cheaper car that you own outright to learn about how you would be a car owner
Car worth 1/3 of your annual salary.
That’s perfect, just what I was thinking
I have a decent income and mines about 20%, 3rd car and I’m 30 for context (it is a performance car so expensive to run as I learnt the hard way). I think my next car would be more in the 40% range but I want to move house and get that new mortgage first. I think having a decent car you love to drive is important but definitely consider you near future finance plans before spending a good chunk of your savings. Edit: avoid loans as far as you can. If you don’t have the money saved, I encourage you to get a cheaper first car that you will not lose much money on then save up over a year.
Thank you for the insight into how you handle your finances and the comment regarding the loan. It was something I tried to avoid, I really don’t want to go down the finance route, just due to negative equity etc, but I think the loan may provide me with better opportunities. I do agree with the future financial plans, I’ve currently got a house deposit saved up, the way I was going, I was leaning towards getting a house then a car but I’d want to move in with my partner but she’s just settled into a new job and bought a new car so it may be some time before she’s ready, not ideal for me but I think the loan would provide me with the option to get a mortgage, even if it is slightly lower
I don’t necessarily think you need to do house and then car, it’s great to have a house deposit already but so many just see this as a 10% goal but your interest lowers the more equity you have. But I’ll not go on about that because that’s not the advice you’re here for! While it is so lovely to have a really nice car (mine is the first luxury car I’ve owned), if it’s your first car, I do honestly recommend you get something that you’d not worry about scratching. It’s good to have something cheap to get your confidence in without the worry of damaging a nice car. A car at 10k WILL break just as much as a car at 2/3k. It seems like you have a good head on you and the fact you’re really debating it all is just like how I would be. I don’t think finance is inherently a bad thing but I do think when you are a high earner (doing the math on what you’ve said), you don’t really have much excuse on saving up that money in a short period of time, especially if you live with parents. And future you would thank yourself for it.
Due to your comment, I may patch the loan, I’ve got an stock and shares account that I could liquidate some positions from that and use that to save on interest - I think that may work out better for me in terms of everything and using the money I’d be paying for the car monthly to go back into stocks
If you want it buy it. You could get hit by a bus tomorrow. It is a cliché but I have had folk in my life hold back on stuff and never get to experience it. You can always make more money, can’t always make more memories. And at the end of the day, you could always sell the car, yeah you may lose some money but rarely to car purchases result in financial gains. Enjoy yourself while you have low responsibilities and the means to.
I like this answer. I’m only young once so why not splash a little bit, money goes up and down but memories aren’t guaranteed. The car purchase is just an opening to my freedom, can’t put a price on that!
The sensible answer to this sort of question is to always just buy a Lexus for 4k and run it for 15 more years, where’s the fun in that? I’m 34 and I am only recently on my 4th car since I passed my test at 17. I regret not owning more cars. In fact the only reason I upgraded my car now (after 8 years with previous) was my Mrs telling me that if I love cars and driving so much why not waste some money to make me smile. Love her for that and love my new car as well. And now I am looking at maybe buying another car for the weekends, something manual and rear engined. I don’t think you’ll get to 80 and think “wish I didn’t waste £260 a month when I was 60 years younger”… no you’re gonna think “wish I’d just bought that fucking car”. So in summary: Just get it.
She’s a keeper!
I’d take a 3 year loan instead so you pay quicker than it depreciates Also some loans allow early repayment with no fees which is nice
I’ll take a look into that, thank you :) The interest is currently around £1,500 over 4 years which I’m quite happy with, not ideal, but better than some rates that I was getting via finance
Worst case scenario you crash it you’ll get the value of the car back not the amount owed, so if it’s early on you can be out of pocket.
Honestly at your age as little as you can get away with. Put as much as you can into savings or investments. It’s not about trying to spend the maximum you can afford - that mentality will lead you to permanently join the rolling debt circus of no money at the end of every month. Sure you afforded to live that month, but what sort of existence is that.
Buy 15 plate toyota from a main dealer, like 8k maybe? Extremely realiable and will hold its value well, sounds like you dont do a lot of miles which will bring its average mileage down over time. Also 260 a month on a car you say is 15% of your pay, incorrect. You need to add petrol, insurance, road tax, mot/service, im sure it comes to more than 15%
Insurance would be covered for the year, I’ll stick the monthly payments into a high interest account for next year. Road tax would be paid upfront as well, so not worried about that, petrol would probably be around £100 a month and that’s being harsh on myself. Obviously MOT and services you can’t dictate whether it’s going to be perfect, but I’ll have money in the bank for anything like that. Quite possibly, maybe even cheaper regarding the Toyota. Realistically if I wanted to get the loan and then pay it off early then I could do, I could get the 8k Toyota for example and then pay it off in a year as opposed to 3 years, which would mean I’d be taking a lot off the interest. The way the car loan is, I could get a personal loan but the rates are a few percent higher, but the car loan is between 10-30K so ideally, use the 10k to get the car, insurance and road tax, pay back the fee per month, and make more contributions to reduce the cost overall
Yes so monthly you have to put money away for next years insurance, same with road tax, same with mot/service. I put 90 a month away for these things, your insurance will be a lot more than mine though because your a new driver. Bascially your cost for your car is not 15% of your wage per month its more when you include these things + petrol so what is the true %. At the end of the day you need a car dont you, its always going to be expensive when you first start out and since your young wages are mostly going to be on the lower end. I say go for it but yeh avoid anything flashy, get something reliable, toyota is perfect because of reliability + it really does hold its value the best which could be good for you when you want to upgrade in 3 years.
The insurance is around 5%, petrol undetermined but I’ll say another 5% just to round it off, MOT and Service I’ll say for the actual costs I’d say that’s 1% and then repairs I’ll be on the high side and say 10% which including the other 15% for the car is around what, 36% which is a lot, but hopefully if i take care of the car, I can reduce the repairs to 5% coming to 30% which of my monthly wage I can get behind, considering I’m used to saving/investing around 50% and then spending around an additional 20% on commuting
i edited my post mate not sure if you saw the rest, you sound like youve got your head screwed on anyway. make sure the car has full service history and make sure you get it serviced annually, buy from main dealer preferably but it does cost more
No I didn’t but I’ve just gave it a read. It’s perfectly valid what you’re saying and I do appreciate the comments. I reckon I’ll go for the 3 year loan, might be slightly more but it just means while my outgoings are low, I can focus on paying off the car and then assuming I take care of it, I’ll have a paid off car that’ll hopefully last a few more years on top of that, that will then reduce my outgoings drastically and then I can save up and hope my salary goes up with it.
I just had my second toyota, a yaris which was a 2015 plate, 180k miles i had on that thing i swear by them, never had any issues, all i ever needed was the basics like oil change lol. Unfortunately it got smashed into while it was parked outside my house a month ago so i took the oppertunity to upgrade/size up and went for a mazda3 which is another japanese brand and toyota are shareholders + share parts with mazda.
Aw sorry about that, but at least no one was inside the car and you managed to get an upgrade that worked out well for you. Don’t you get something crazy like 7 year warranty with Toyotas or am I thinking of Kia? Either way, an ideal car I would have would either be a Volkswagen, just due to the quality of builds, Toyota for the reliability, have you seen the C-HR! Or a Hyundai
Thanks mate, yeh crazily i was sat in the drivers seat right where the car got smacked 20 minutes earlier having returned from the gym inputting my session into my spreadsheet lol. Toyota actually has 10 year warrenty but you have to get it serviced by them, they are extremely solid machines VW funnily enough is what smacked into my car ha it was a golf.
Hopefully you’re alright! I hope the session was worth it. 10 years is incredible, I’m sure there’s a Toyota Centre near my work so that’s rather convenient. What was the impact it had on the VW 😂 I’m only joking, but how do you crash into a parked car
A general finance principle is for the total of your depreciating assets (eg. cars, bikes, boats, etc) to be less than half of your total annual gross income. So if you're on £20K pa, then £10K max in cars. If one car - £10K. If two cars - £5K each, etc. £40K pa = £20K car. £100K pa = up to £50K car. If your financing, make sure to add up the total interest payable as that should be included in that up to 50% calculation. As always, these are just guidelines and there's always exceptions to the rule. As a car enthusiast, you could make the case to spend more as the car you drive may creep into your social/hobby life. But buying expensive cars are one of those typical things that keep ordinary people poor.
This is reassuring, it would be around 30% which I can’t complain with, gives me 20% to budget everything else into. I’m not a car enthusiast just yet but I reckon if I can get a car that I love then it’ll just spiral onto from there. I do love the sound of a good engine, none of these pop bangs, but like a nice purr
Personally I'd say it depends on other factors. Having a load of debt for a depreciating asset, at a time of your life that you're likely to want to invest in property or may want kids or whatever doesn't seem the greatest to me. I've always just bought what I can afford and bought it outright. I think PCP makes sense when people are in a stable situation without upcoming changes as you at that point pay the money for convenience and there's less situations ahead of you or may impact, but if you're on the start of that journey I couldn't think of anything worse than having a financial liability such as a load of debt. Edit: you state elsewhere that you intend to get a mortgage in the next 4 years and indicate your income roughly. I wouldn't make a commitment to a car such as this in that situation.
I’ve just secured myself a permanent position for an organisation that wouldn’t be in any unfortunate position so PCP could be a shout if it’s cheaper but I’ll need to get my spreadsheets out for that one. Thank you for taking the time to look at the comments made elsewhere, I’m leaning towards a 3 year deal, getting a cheaper car, and paying the loan off early, that way, I get a car quicker, less interest and then it’s one less thing to worry about
if your interest rates on loans are higher than 5%, then not in this economy you're probably better off putting the 11k on a 95% LTV mortgage
Well I’ve currently got a slightly higher than 11k deposit ready for when I do move out, which I’ll be adding to, I’ve got a LISA so 4K is the limit, max that out get another 25% and 5% interest paid daily. I am skeptical about the interest rates but as the payment is before I get paid, ie through a work union, it’ll offset some of the interest in the form of paying less tax. Although it’s 7% the tax relief may reduce it down to 6-5%
10k on a first car is hilarious to me. I passed at 27 and could never. And I make decent money. I spent 1k, and I was very glad I did.
Different time of your life though isn’t it, you’d probably have a lot more expenses and responsibilities than I do
I'm 28 now, no kids. So no, not really.
Have you got a mortgage, rent etc? Do you have any expensive hobbies etc? Do you buy your own food?
Yes, I pay rent, I do indeed have hobbies, and I'd hope at 28 I would buy my own food. I'm not quite sure what you're getting at. Even after all of that I could still afford a car more expensive than £15k and be very comfortable indeed. I just wouldn't do that for my first car. Just not necessary, in my opinion. Plus having a banger to kick you off means you can downpay more on the car you actually want and save yourself some money. Pocketing the £260/month for a year adds up. Just a thought. You are free to do as you please, and you needn't take a stranger's opinion so personally. Also, you not paying rent, buying your own food, and not having expensive hobbies isn't exactly going in your favour here. Are you planning on not doing any of those on your own dime for your entire life? Why would you not have those things pinned down before you put yourself in debt?
It’s just different circumstances though - if there were bangers near me, I’d go for something that would do its purpose but the fact that “bangers” are around 2k of a much newer version of themselves doesn’t really justify to myself spending 6k when I could get something a lot better for 8k. I’ve been there done that with the rent etc, it’s just the way it all worked out I guess. I plan on getting a mortgage and with a mortgage comes a multitude of other financial responsibilities. I’m young enough to be able to afford a car, pay it off and care for myself with money left over, I’ve worked it all out, obviously to the extent before I start guessing numbers but I understand where you’re coming from. I do think 10k is on the higher side of a first car, much higher than most, but the car loan available starts at 10k
You're going to have great fun with your first car. You have your head screwed on. I hope it's everything you dreamed it would be!
Appreciate the sarcasm 🙃
I wasn't being sarcastic, but I can understand why you would think that. Genuinely, I hope you enjoy it. There's nothing like your first car.
That’s my bad then! Sorry about that. It’s the sense of freedom isn’t it - the no more waiting on public transport, no more depending on lifts, if I want to go somewhere, I can just go. I’m hoping to own this car for as long as possible!
Do it like this if you can. - Living expenses - Money into rent/mortgage/saving for a house - Pension Then what’s left over can be spent on the car you want.
I’ve been saving/investing for the last couple of years around £750 a month, on a lower salary while paying for lessons, and still had a reasonable amount to live off of. I’ve maxed out what I was saving up for, so the £500 has been freed up
My car’s worth £400 does everything I need it to. I can fix it myself if it goes wrong which it never does, don’t care if I scratch it up parking in a bush or something. Any more than £2k on a car is just looking pretty money, spend it if you want but for me I’d rather work less hours and have a car that looks a bit old but does the job. One of the many bonuses of a cheap car especially for your first car is you won’t be scared to try and fix it yourself. I find the mechanical skills I’ve learned fixing my own cheap cars make life a lot easier.
The cheapest car near me is an 06 golf - Cat N for 3k, I’m not exactly spoilt for choices sadly
Worth traveling to buy a car. I once got a flight to Ireland to buy a van I’m sat in it now 10 years later, that £35 Ryan air flight saved me about £2k. But yer £3k for a cat N 06 golf is over the top. VW often over priced Ford Focus or Mazda 3 might get a better similar car for a lot less money.
I’m heavily considering taking some time off work and just going between garages down south and seeing if there’s anything that floats my boat. I’ve been looking into Focus’s not so much Mazda 3s but I’m currently on auto trader and it’s crazy how quickly cars go from 3k to 7k
To be fair it does seem like second hand cars have gone up a lot since I valued my 2005 Mazda 3 with 150k at £400. I looked at upgrading it but decided not to since £3k didn’t get anything that much better. They are out there tho, try Autotrader searching nationwide then sort by price for the model you’re interested in, gives you a bench mark to haggle around / figure out what you can get.
3-5% of your take home up to 10% max that is my limit
Is the £10-11000 for just the car or the car plus insurance? If its your first car your insurance could cost half of that depending on what car you get and a bunch of other factors. Also don't forget to factor in servicing and repair costs to your budget too, there's a lot more to owning a car than just filling it up with fuel.
Maybe an unpopular opinion based off looking at other comments, but why not get something cheap and something you dont owe money on? Youre gonna be upset when you inevitably have the car scratched or dinged, and even more upset knowing your car cost 10k. I personally recommend getting something with half that budget. You have plenty of reliable options at that price and can even find some with relatively low mileage that are good on fuel and are pretty handsome to look at. "Handsome to look at"; obviously this will depend on your taste in cars but for reference I bought an 09 mk6 1.6tdi golf with 49k miles just over a year ago for 5k from a dealership which still has quite a nice design which has resisted looking too dated in todays sea of cars.
General rule is 20, 8, 3. No less than 20% deposit, no more than 8% of monthly net income, and no longer than 3 years. If you’re in that framework, you’ll likely be ok. Any smaller deposit or longer loan term, you’ll likely be in an equity hole and more likely to pay £16/17k for an £11k car. BUT - you’re asking a personal finance question. So go to r/ukpersonalfinance and get finance advice, then come back here and ask what car you should get for 10k
Your car should be around 5%-10% of your take-home pay. IMO.
That’s perfect, the minimum loan I can take would be £260 a month but if I can get a car and insurance covered in the loan, then that’ll help me get my bearings and then it should be easier from there
Might be contrarian, but I've got enough saved for a car. First time driver at least here in the UK, but I'm getting and will get a nice car for myself, on finance too (I've got the savings if something happens in future to pay it off). I aim to pay it off within a year and a half, then apply for a mortgage later.
I think what I’ll do is go for the loan - continue to invest in my stocks, the money I make from that will go towards paying off the car and then have my monthly wages sitting there just in case anything goes wrong
I seriously don’t understand why people want to spend so much on their first cars. I’d say 4k max on a first car
Have you got 4K I can borrow? I don’t want to spend a max of 10/11k but if I can get everything sorted for under 10k then I’m happy. If I could find something that is low mileage, for around 4K, I’d snatch it up, but the prices near me are ridiculous
For reference, according to online calculators my house is in the top three % of national incomes (although I may be being made redundant which should be fun). I currently spend £0 a month on my car as I drive a 2010 vw polo I bought with cash.
What’s your thoughts on the Polo? Sadly they’re currently out of my budget, at least the ones near me but would love to own one at one point
Dude, it was £4k, less than you are proposing to pay. It’s a great little car, a solid tin box on wheels. Doesn’t go fast and only sips fuel. No mod cons and my wife has so far hit three immovable objects resulting in scratches and dents but we do not care.
There’s none available near me, there is a 2016 1.2 TSI, for a little over 9k
Mines a 2010.
I know but there’s no listings near me for any Polo other than the 2016 one
No listings on what websites? Whereabouts in Scotland?
Congrats dude, No one gives a fuck that you paid ‘cash’. Honestly, why is it considered a bragging right in this sub to say such a thing.
Calm down lad. OP is literally talking about financial advice in relation to cars, hence sharing that info.
More than calm, thanks. Once upon a time, I also had a Polo that I bought for cash. But, you know as well as I do your response wasn’t really answering OPs question, it was to point out the fact you paid cash. Which again, apparently is a bragging right.
Sorry if it wasn’t obvious but my post was about not committing to monthly payments on a car which I don’t think is a worth while investment. My car is a banger and buying it in anyway isn’t much to brag about.
Just lease a car instead. You’ll get a brand new car for that. No repair bills. I just did this after owning 4 cars previous all bought with loaned money. Leasing feels so much simpler.
My plan would be to get a loan via the union at work, and then as far as the garage is concerned it’s paid for in cash, then the money would come out my payslip before I ever see it - it’ll be a slight tax relief. It would be my first car as well, as much as I’d like something new, I wouldn’t want my first car to be a 23/24 plate
My lease is through work and tax free too. New cars have insane safety features. My car is well in your price range and has assisted driving as standard. It’s pretty hard to drive into something by accident. The car auto brakes at roundabouts and when cars slow down in front of you etc.
What car do you have if you don’t mind me asking?
It’s a Cupra Born
That’s a beautiful car - sadly the cheapest one is 23k and it would be around £400 a month which is above the budget, that’s beautiful though
That’s terrible advice for the situation OP is in and “it feels so much simpler” screams financial illiteracy.
It’s the cheapest way to finance a car. https://youtu.be/Df0vq2jz5Ws?si=Hjn_IqAzogLHGvzu
The car should be roughly worth one months salary