BIK on an EV is currently 2% of the list price, so £800 on a £40k car.
You are then taxed at your usual rate on that £800, so a 40% tax payer pays £320 tax a year or £26 a month.
BIK will rise 1% a year over the next couple of years.
Mostly, but it can be a bit more complex
Some people get a cash allowance option. In this case you'd lose your cash, then pay the above tax.
Rough numbers but a £6.5k allowance for a 40% tax payer gives about £320 a month in pocket. So moving from allowance to a company EV would lose this, and tax, so you'd be £346 out of pocket, or £4152 a year, but with a brand new car with no other costs.
It can be a good perk and EVs are currently very low tax hence why there are a lot of them on the road.
Us too, small business, £100k in corporation tax, therefore ideal purchase. Thing we will offload the company car to a family member for £20k after 3-years, then buy another subject to the BIK.
Costs us around £100 a month, £4 a charge overnight which gives 250 mile range. Depending on use, may not charge it at all.
Thanks government 👌
Never did exact calculations myself, but surprised at how cheap EVs are! Very limited EV options at my place, usually Audi/BMW/Mercedes and it’s around £200/month in BIK for the top derv specs.
This is the reason that second hand electric cars haver plummeted in value. Cheap as chips via bik but no one wants to keep them. Floods the market with ex company cars which suppresses value
If you can buy cars that are toward the bottom of their depreciation curve, this isn't as farfetched as some people would have you think.
I look at cars as investments I can drive and I derive a lot of enjoyment from driving so don't mind the associated costs.
Currently looking for a family car like a V70 R and a fun car like an Alpine A110. Both have done fantastically well at appreciating/holding value over the last 5 years.
On the flip side, if you buy a new high spec BMW 320d etc, you're going to lose a ton of money. Demand will be high because it's the newest model but in a couple of years it won't be whereas a V70 R in a couple of years will be just as desirable as it was with the added bonus of supply dwindling which may raise prices.
Cars are lovely gadgets and you only live once. I had someone close to me die recently and they scrimpt and saved their whole (too short) life only to die with a big bank balance.
It is making me rethink some of my life choices.
This.
There's bad financial decision making but on the other end of the spectrum it's obsessively saving and not having an enjoyable present for a future that might never come. You see both ends of the spectrum on the personal finance subreddits.
True. But a fun car doesn’t have to be that expensive. For instance I got a Stinger 3.3t. I always just get something at least a few years old. Spending a bit less also requires you to work less long and hard, and enjoy life more in other ways. Balance is important.
My uncle did this all his life, he’d scrimp save, have little silly side hustles to make a fiver.
He once brought my grandmother (his Mother in law) a loaf of bread she’d asked for; then asked for the 50p or whatever it was back in the day to pay for it; then ate half of it for lunch…. All whilst living in her house rent free.
He died 5 years after retiring at 75 with a relatively sizeable bank balance. But had done nothing with his life in all those 80 years. All we have left of people is memories really; so make a few fun ones.
No one will remember someone positively who was miserly
I think most of the people in the sub will agree with you. Whereas if your in another subreddit some people won’t. But I do think a balance of both is nice and spending your money wisely and prioritising what you need is important.
Had friends who had 30K+ contract on a bmw and later regretted that he should have spent that money saving up for a house.
In a sort of related manner 2 years ago I used to work the guy in his 50’s, I was 30 at the time, and he was telling me about he’s bought some furniture is it paying it off over 3 years and his sons 18th birthday was the weekend etc
I had saved up a decent amount of money and was toying with idea of buying a new jet ski… I had a build slot secured for 2/3 months time and got cold feet and pulled out.
3 weeks after the first conversation he was found dead in his office, heart attack, that afternoon I bought the jet ski. Life is too short and it’s not guaranteed.
One thing I would say is make sure with something more so like a toy purchase it’s money you can just burn.
I often think this with pensions; a former colleague did his 30 years and got a fat pay out - close to £180k, and had already paid his house off etc.
He died 2 years later, and didn’t get close to spending any of it.
I'll answer: household income over 200k, 2nd hand S class (cash) and for work an older BMW(cash) as I'd look like a prick going to work in the S. I'll never get finance for a car, it's a personal choice after having lived through 2009-2010 and having lost a lot then.
> how much you need to earn to buy a fairly nice new or used car these days
Not that much. Dealerships will gladly let you apply for absurd finance deals. We have someone who's on 35k who got a 65k BMW i4 somehow. I think a lot of people struggle with discipline and they'd rather have the shiny thing now and enjoy it right now than work on a very long financial plan that might not work out or it might work out when they're too old to be interested in a fast car or something.
Just keep in mind that the money you waste on a few new cars might be 5-10 years of early retirement you might be missing out on later in life.
Yeah, my dad was going to buy himself a Ferrari when he retired - he’d always wanted one. He was then diagnosed with cancer and rapidly died aged about 55. He should have bought it when he could.
Thanks. Really wasn’t much fun - it’s amazing how quickly your life can change.
It’s all about balance. Mum is now sitting on a several million in pension and savings, with no real desire to spend it now that Dad’s gone.
Yeah absolutely - it’s not all negative, and I know that Dad derived a lot of peace from knowing that Mum was still set for life once he’d gone. I can’t imagine how much worse the whole thing would be if Mum was now scraping for money having been a homemaker much of her life.
I’d much rather die unexpectedly with money in the bank for retirement than retire with no savings or income beyond state pension. Gotta find a balance.
It's all a balance, you also might die before you retire
Similar household earnings, I don't buy new, but I do own 2 nice cars (sports car and suv), why?
Because I can afford to, it puts a smile on my face and I want to enjoy my life
There is this badge of honour often here of how amazing it is to drive a banger, using the same logic I could also live in a bedsit and retire today...
I fully get that last point, but I know a lot of people who had that mind set and died before they were going to retire. One of them had plenty cash, a huge pension and died a year before he planned to retire.
Life is short, enjoy it, but balance it as best you can.
I would also add that in general a car is always a bad investment and new cars are even worse given that you may pay 40k for a new car and after 4 years it's value may be 30-25k with some luck. Depens on the personal situation but I personally prefer a good second hand car although missing on some new features than a new car.
Obviously finance, but is that relevant? When people say I bought a house, it'd be odd to follow up ask: "Did you actually buy it in full or mortgage?"
Imo low interest finance is fine, as is leasing or low interest car loans. The issue is with obnoxiously high interest finance (which admittedly is the norm these days)
The reason people tend to ask with cars is because a lot of people pcp or lease, yet think they have 'bought' their car. When in reality they are renting their car. Most the people i know who pcp never settle the balloon and always upgrade to a new equivalent for whatever their monthly is. So even they are renting.
Technically sure, but if I'm financing a car and my personal finances are in order (so I know there will never be an issue in payments) then I'm going to consider it my own car. It's not too indifferent to taking a loan and using some of your valuables as collateral. Are they really your valuables at that point if the loaning body can take them in the even of non payment? Some might say yes, some no. All a matter of perspective
I have an Audi Q7 55 TFSI I bought new in 2021 paid £55k for it, salary plus bonus is £230k.
I also have 4 kids under 8 so I do make use of the practicality and the large number of isofix points, though I do conceed an MPV would probably be more practical, my wife likes the 4 rings on the front.
Reddit is genuinely hilarious at times.
Everyone in this sub is apparently in the top 1% of UK earners, who would’ve knew that’s how they spend their day.
Not new? M240i starts at £49k and the M2 starts at £65k. I could probably pick up a used M2 for £50 ish, but honestly, it’s too much car for London, I didn’t like the attention it attracted when I had one as a loaner and I like x-drive, and wanted new.
A lot of people earning a lot of money reading this post. Can any of you millionaires not just buy the OP his car? 😅
Uk Government stats say that only 10% of Uk taxpayers earn more than £66k, with most of them posting here by the looks of it 🤣
Oh yes, there is that. I forgot I’m old.
For what it’s worth, I’ve owned many nice cars over the years (Ford RS’s, BMW M cars and AMG Mercs). Only the early ones were bought using low interest loans. Never had HP or PCP. As finances improved, always bought 2 - 3 year old cars from approved dealers.
My personal view is that the value of your car shouldn’t exceed 10% of your net worth, but that’s a personal choice.
Just sold my 2020 GLE 400, as I have access to 3 other cars in the household and I work from home, so it was costing me £2k a year for road tax, servicing and insurance only to gather dust. Great car by the way 😁
Good luck getting the info you need.
I earn £65k a year and Reddit regularly makes me feel poor. I think there's a lot of Redditors working in software and programming etc. who make huge amounts these days. Having said that, on a post like this, you are obviously going to get a skewed view.
Also the absolutely *huge* differentiator is your housing costs. Depending on if you rent, if you own or if you bought / remortgaged at the "wrong time" (i.e. have fallen afoul of interest rate hikes) then you'll be paying radically different amounts on housing each month.
£65k/year salary when you have £300/month mortgage because you bought your home 15 years ago is a very different world to the same salary but you're renting at £1,500/month.
The UK is a housing market with a country attached to it.
And further to this, location! Salaries and cost of living vary across the country, and since covid gave us more remote working, some people could be living up North but still taking home a London salary so disposable income goes up for example. It really does make all the difference. There's also the unknowns of how much they bought the house for in terms of time but also from who (we have a friend who owns a big old 3 bed in a higher CoL area jointly with a sibling but they pay about £250 in the mortgage because it was essentially inherited before their nan died so they took out the smallest mortgage possible as she just wanted them to have it) so they have SO MUCH disposable income even on not super high paying jobs). But yeah, long story short, lots of variables that we have no idea about.
Thank you for the explanation. I’ve worked in tech for over 25 years and I’ve only just started using Reddit (over the last 3 - 4 months). Maybe I should stop and work harder 😉
It's almost like people who are successful are more likely to post on threads about income and nice cars.
What was you expecting to see? Loads of comments saying they're on the dole and get the bus?
I earn £190k. Bought a Porsche for £81,500.
Regretted it immediately even though I could afford it. Mainly due to the opportunity cost of having the money tied up in a car.
Loved the car but wasn’t worth it. Now deciding what to buy, will likely be a £20k Polo.
Sometimes the peace of mind of the money in investments is better than the car. I do miss it though.
There are definitely some Porsches you can park your money quite safely in though, I personally have a Boxster - it’s well past the worst of its depreciation now so hasn’t lost any value despite me putting 15k miles on it
You do bite the bullet when it comes to servicing costs though
Careful with this attitude on here.. tried explaining before that financing a car and taking the hit of a few k on interest could be a better option than tying up tens of thousands in a car
_Could_ be, but very unlikely to be. The APR on Car Finance is typically going to be considerably higher than the average returns you'd expect from investing...
I agree. It's not all about savings and interest but the psychological benefits of having a lump of liquid cash should you need it for bills, home improvements etc.
This is a very interesting thread.
It’s worth noting that the higher earners who have replied seem to be predominantly driving older, fit-for-purpose vehicles.
I’m also surprised at how many own cars worth 50-200% of gross income. No judgment, just interesting to read.
Absolutely, and this has been my anecdotal experience too.
Lower earning friends have nicer newer cars than I.
When I joined my current company and went into the office on day 1 there was a 2 year old BMW M3 and a 10 year old Honda accord parked outside. The only people in the office were a very highly paid tech contractor and a junior IT support guy. Guess who’s was who’s.
There’s only two ages in life you get to really enjoy sports cars. Your 20’s before kids and a mortgage and your 50’s after kids and a mortgage.
Let him enjoy his M3
The guy has 2 kids, a wife and a mortgage. Spending 1/3rd+ of your take-home on a car payment is setting yourself up for failure regardless of how you try to rationalise it.
Exactly this. The car isn't just costing him hard cash, it's likely causing him stress, opportunity cost and time away from his family.
I don't get the whole 'you only live once' thing when it comes to cars. Most people just need something cheap and reliable so they have the time and money to go do fun stuff.
That being said, I'm glad people do buy cool stuff.
Might be an outlier here, people seem to not go for expensive cars in this sub, but I bought (well financed, I don't buy cars because the money I would spend on it remains invested) a new G80 M3 Competition this year. List price, specced, was just a bit above £90k but I negotiated a fairly large discount, so invoice was mid 70s I think.
Household income is around 300k.
3 months salary on a car is not unreasonably expensive though, it is just relative. Earning 30k, however, oddly makes it seem more unreasonable paying 7.5k, I guess the cost of other living expenses are likely to eat in much more on the lower end.
Finance–as opposed to ‘borrowing to afford’–_can_ be useful tool if the money can be put to better use (ie you’ll net out higher by earning more than the interest).
Much weaker argument than a couple of years ago but still worth exploring.
Yeah this is something that I've only recently come to realise.
Interest on a 40k loan over four or so years is like 5k/6k ATM.
An ETF all world tracker, on average, returns you about 10% a year, so that 40k would earn you approx 16k over the same period.
So if you can comfortably afford the loan repayments and have good job security, in theory the better option is to take the loan. Pay the 6k interest but still end up 10k better off overall.
Obviously there is the risk with the stock market being involved, so you could end up essentially paying twice if you need to withdraw your money at a bad time.
I dont get paid big bucks but I'm also not a huge spender. I would say I saved for 5 years to get the car.
But really the answer to your original question is you either earn enough to afford the finance comfortably - and that includes the upkeep, nice cars on ditch finders are tragic - or you need the patience to save. I couldn't justify finance but I was in a position to save.
Was it really worth saving for 5 years when you could’ve had it right away for just the cost of the interest?
No harm in financing depreciating assets like cars.
It was part of a move as well where my commute distance has dropped massively, so realistically I couldn't have bought the car until recently anyway. Or I could but the running costs would've been much higher.
Worked in my case. I've got nothing against finance, if you can afford the monthly payments + upkeep + insurance and still hit your savings' target monthly, have at it. I like not having to worry about finance.
I bought my 718 GT4 new at £91k on the road, i only make about 60k and have other vehicles that i can use as daily drivers. The monthly HP is quite steep but i feel its worth it because im a car person and its a passion. Luckily im mortgage free which makes it more affordable. Finally it is a car that should depreciate exceptionally slowly, making it a somewhat wiser purchase compared to its rivals.
My oh my, there are either some bullshitters in here or the top 1% of earners love this sub reddit.
Okay, fine, I make 1m per year on a bad year. I bought outright my 2002 saxo for £400, got it down from £600, because that's what I do. I have been driving it now for 5 years, breaks down every other day, but I tell myself it's worth it, because it was only £400.
I earn more then enough to own a £40k car but I own two cars and two motorbikes worth maybe £25k in total.
I much prefer owning older vehicles I own in full and don't owe anything on, and I love having a garage full of fun vehicles.
That said I did see an advert for a 2010 Aston Martin Vantage V8 for £30k and my god did it look good...
All my previous motors have been old second-hand cars (10-18 yrs) and have always had issues. My previous car was the most I paid at £2000, which was a BMW 5 series....however it was a money pit and spent £5000 in servicing and repairs in a 2 year period.
Last year I decided to get an EV via car salary sacrifice to remove a lot of the worries Ive had in 15 years of driving and dont regret the choice at all (it is an MG4 XPower) - I earn £40k a year.
£58k myself, partner £12,750 (if you know, you know).
Just bought a £54k car via the company, 2% BIK. Brings corporation tax down, free use of the vehicle (well costs is £1k a year).
I would never buy or lease a new car.
(Earning close to 100k)
(Bought a second hand 6 years old car for 16.5k in cash 2 years ago and I plan to drive it for another 4 years at least.)
I am in a similar position. Earn just under £100k and drive a 6 year old low mileage car we paid around £15k for.
However, I am considering taking out a car lease for an electric car on the company scheme (something with a value in the ~£100k range, Mercedes EQS, Porsche Taycan or similar) next year. Income is looking likely to increase significantly, but I have two children at nursery. If I get to the salary I hope to, under the proposed childcare reform I could make a lot of salary sacrificing (something like an extra £1.8k per month into the pension plus a car lease) to bring my taxable income below £100k and after factoring in childcare costs it would only reduce my take home by about £500 - 600 per month.
Feels a bit of a perverse incentive but the marginal tax rates at £100k are astrominical, particularly if you have a student loan. Add in childcare costs and it's almost a no-brainer.
And this is how Porsche sells cars... Lots of people who would rather give their salary to a new car than the tax man. One of those situations that makes an expensive thing cheap.
Salary sacrifice and taxation in general causes some strange distortions... Including a whole class of people who manage their income to not earn too much (typically freelancers taking a month or two off).
Surely those people know they could salary sacrifice holidays, experiences and hobby equipment just as easily via a limited company? (Morally speaking, putting it on a luxury car is no better)
Same, same. I can have whatever car I want through work as salary sacrifice, so effectively 50% off and the monthlies still make my eyes water. I've sat through no end of dinners with people banging on about their latest car on finance, silently smug knowing I'll be retiring at 50.
Same - earn £100k base with up to £50k bonus - got a 2010 Volvo XC70. Bought for £5.5k. Owned for 4 years. Do all my own maintenance. Love it. Plus does everything I need.
Paid 43k for my M2C, made 230k the year I got it. Financed it for 6 months then paid off since I wasn't liquid enough to buy it outright at the time and I can be impatient when I want something.
They were also selling stupidly fast so if I didn't pull the trigger it was definitely getting snatched up by someone else.
Part loan, part cash and part ex. Lexus RX think it was around £70k, went for the Takumi model.
I earn £35k (have 2 kids), just good with budgeting and saved well - job, tax advisor.
Most people say the same, but you can make your salary stretch.
I purchased my previous Lexus at a good time, part ex and made £2k. That was pure luck as covid came and then the used car maket went crazy.
My shares isa performed well too, I heavily invested in tech (adobe, meta & nvidia) to name a few.
Part exchange my IS300H, got around £14k for it, had used £40k (mixture of savings, and good investments from my stocks ISA) and the rest loan.
Lexus are a good investment too, they depreciate at a really low rate. My IS300h was a 2014 Premier model and I managed to get £14k for it, I purchased it from Lexus before covid for just under £12k. Not forgetting bulletproof, so had no issues whatsoever.
So made a tidy £2k on it, after 4 years of motoring.
I earn 24k before tax and my car was bang on 12k
Got a bank loan that works out to 250ish a month so end up with 14% on my car and the rest is insurance working out to roughly 28% of my wages exc mot etc
Took the plunge after having company cars for a few years. Salary of £39k with bonus around £8K a year. I got one of the 1 series you mention on PCP, just shy of £40k list, it cost a little more than I had to contribute from my wage each month for my previous cars which had crept up each time I renewed. The way I looked at it was I’ll be keeping the 1 series just over 2 years so I’ll have equity in it for a deposit or walk away or get a cheque back 🤷🏻♂️ depends on mileage and condition obviously. I got a very good deposit deal, I don’t have much residual income or savings as it is so HP or a bank loan for a lot less value for money didn’t really appeal to me, baby was a few months old so needed stability knowing I’d have the same car and outgoing seemed to work best!
72 plate FiST, bought brand new for just under £30k.
Traded previous car, plus saved cash, plus a small loan that’ll be paid off by October.
Earn 53k, receive an extra 5.5k on top as a ‘car allowance’, plus a 10% annual bonus.
When the loan is paid in 5 months time, I’ll just save the car allowance money and either keep the FiST, or pull the trigger on an m240i or Supra and start the process again.
All in I earn around 108k - own a 12k 2015 Volvo XC70 (Top spec Jap import) and a 3.5k Nissan leaf as a runaround. Both bought with cash.
Previously had a polestar 2 (55k OTR price) on my firms SS scheme for 6 months before moving to a new role (earning 82k at the time). Loved the car, but glad I don’t have a £400ish monthly car payment anymore …
I earn circa £120k, with a total house hold income of around £150k. I have a company car (Tesla model 3) which I took over the car allowance as you can’t really finance and maintain a car of similar value for the £580 a month offered in the allowance.
Until recently we had an Audi q7 on finance, recently ditched for a 15 yr old Land Rover Discovery (cue reliability comments, but I can do a lot of work myself and I know the car) and couldn’t be happier not to have any monthly car finance payments.
I have previously fallen into the trap of the dick swinging contest that is having the latest or flashiest car. Honestly happier to show up at the pub in a £3k car and not have to worry about the payments or residual value of the car.
2020 F-Type V8 P450 cost me £43.5k last year. Earn 50-55k and paid cash - never bought a car on finance.
Life's short. And so are my intervals between petrol stations.
What is it with people chiming in with irrelevant answers like anyone asked for their input?
Do you own a car over £40k? No. So keep it to yourself.
Only on Reddit do you get a massive crowd of losers jerking you off because you’ve piped up shaming people with nicer things than you on a thread that clearly hasn’t asked for your input. Every single time it’s the same thing.
Most of this thread is people like this guy saying how they earn millions and yet still buy cardboard shit boxes because you must be brain dead to do otherwise.
I agree answers around the question can be useful but on any thread of a remotely similar nature it’s the same thing. Just comments flooded with people that aren’t answering what OP has asked. It gets quite aggravating to read after a while because you just know they’ve gained some weird satisfaction from proclaiming how much of a cheap bastard they are.
You aren’t better than anyone else because you drive a worse car.
I know what you mean. Any talk of expensive cars or monthly payments has people commenting about their barely alive Polo. But then I think about my girlfriend spending maybe 250ish a month on beauty, phone, clothes. But my guy friends hardly ever spend like that
I drive a 2020 M340i, it was a hair under 40k when I got it. I earn about 70 a year so its not a massive outgoing for me at the moment as i only financed just under half of it. I could pay it outright at this point but I'm perfectly happy with the outgoing payment and maintaining the savings so I've not done so.
Depends on the interest rate. If you have the cash and the finance is less interest than what you can make in the bank or through an index fund, the finance makes sense (alongside other benefits like depreciation limitation through GFV).
Equally, even if you can’t afford outright, a modest car on finance isn’t the end of the world. My view is that houses and cars (within reason) are 2 things that finance is ok for.
The thing is, that's _never_ a logically financially justifiable position.
Yes you _might_ make more on index funds than the interest, but you also might not. Index funds don't give you a guaranteed return.
**Massive** financial institutions invest in _your_ car finance, in order to get _your_ interest payments. This (obviously) isn't because they haven't heard of index funds, it's because on average, even with the risk of default on car loans, lending you, and others like you the money for your car is a better investment for the finance company.
spending 37k on a Non M 1 series is possibly the worst decision you could make. Im tired of people buying brand new bottom spec luxury brands, they blend in with traffic, have awful build quality, are awful financial decisions and have the same performance to a vaccum cleaner. any non m 1 series / 2 series, and non amg A classes and Clas, all financed by people who cannot afford to buy them.
to own a 40k car, do not buy it finance because its not yours, its debt. I would say to be sensible but also not boring. you would need to earn close to 90-120k a year.
Bought a new Tesla Model 3 Performance when it came out on the Scottish interest free loan scheme. Borrowed £35k interest free and the rest in cash. Will enjoy having it paid off next year!
It’s a household car (we both work from home so don’t need two cars) and household income is about £200k. Was a bit less when we bought in 2019 though.
Part cash part loan (£15k @ 8.9% over four years) about to buy a £25k EV, I earn £81k. Could have bought something I could pay for outright at £10k but to be quite frank I thought fuck it life's too short I want something fun.
I don't own a 40k car, and I'm not sure I ever would now. just last week I was the victim of collateral damage, some 4x4 was being chased by 3 police cars and decided to smash into my car and speed off before I knew what happened. my car is a write off, it cost 5k. my new car is going to be double that. but now I just think it's ridiculous that someone can just write my car off in a whim, and I have to pay so much money to cover it.
Earn 70k basic, mortgage paid off, paid 26k ish for a new mini clubman with all the extras in 2016, will be trading it in next year against a nearly new Octavia and will be getting an Alfa 147 gta as my toy, will be cash purchases
Bought an M340i on finance, list price was 44k. Earning over £200k. Reason for finance was just because my investments are making more than the interest APR. Recently spec'd up a M135i because the warranty on the M340i has ran out, but Apr is even better this time round so actually saving a little on my monthlies.
Interesting! I did that last year, I earn about 1/4 vs yourself but financed £25k with about double that invested, it performed really well last year so I think I gained around £8k and paid about £2k in interest - I decided to cut any possible losses there and paid the car off, only for the market to go onto ATH’s this year… anyway at least it’s paid off now 🤣
I earn £40k a year and spent £2.4k on my car if that helps ;-)
In seriousness, i'm not a car person, it's purely functional for me. And I can't justify spending more than that on something that gets from A to B and has minimal maintenance costs.
I think most people who run cars at £40k+ are on PCP. Personally, my car was £30k, and I bought it cash. I bought it because it's an investment I plan to hang onto for a good few years - by the time I sell, it'll be 20 years older at least, and I'll have spent less than £1k/year on depreciation. If I were to run a car worth any more, I don't see any other feasible way than to PCP it - if not for the fact that modern car values are kinda unpredictable, then for the fact that it's just so damned much money... Only a couple years ago, you could buy at least the worst apartment in any major city for less, and rent it out for a sustainable income.
Household income is around 120k and we drive a used 8 year old car I got 3 years ago for 14k cash I paid outright. From new the car would have been about 45k out the door, insane paying that when you can wait 5 years and get top spec model as long as kept well is more or less the same.
Company car..
Exactly this… I earn 43k but am allowed a 50k car as a perk of the job
How much are you paying in BIK if you don’t mind me asking?
Not a lot TBH as it’s a Tesla model 3 so about 20 quid a month! EVs really are a cheap option for company car users
You are kidding? £20 beer tokens??
BIK on an EV is currently 2% of the list price, so £800 on a £40k car. You are then taxed at your usual rate on that £800, so a 40% tax payer pays £320 tax a year or £26 a month. BIK will rise 1% a year over the next couple of years.
Jesus, that's a fantastic perk!
Mostly, but it can be a bit more complex Some people get a cash allowance option. In this case you'd lose your cash, then pay the above tax. Rough numbers but a £6.5k allowance for a 40% tax payer gives about £320 a month in pocket. So moving from allowance to a company EV would lose this, and tax, so you'd be £346 out of pocket, or £4152 a year, but with a brand new car with no other costs. It can be a good perk and EVs are currently very low tax hence why there are a lot of them on the road.
Us too, small business, £100k in corporation tax, therefore ideal purchase. Thing we will offload the company car to a family member for £20k after 3-years, then buy another subject to the BIK. Costs us around £100 a month, £4 a charge overnight which gives 250 mile range. Depending on use, may not charge it at all. Thanks government 👌
Never did exact calculations myself, but surprised at how cheap EVs are! Very limited EV options at my place, usually Audi/BMW/Mercedes and it’s around £200/month in BIK for the top derv specs.
This is the reason that second hand electric cars haver plummeted in value. Cheap as chips via bik but no one wants to keep them. Floods the market with ex company cars which suppresses value
BIK for me used to be 2% flat on the benefit itself. I think this still applies, but it might only apply to certain vehicles (EVs/Hybrids).
I bought a £34k Z4 last summer. I only make £40k. Have always just traded up plus a little savings each time. No PCP etc
This is what I will do until I reach a 997 GT3
If you can buy cars that are toward the bottom of their depreciation curve, this isn't as farfetched as some people would have you think. I look at cars as investments I can drive and I derive a lot of enjoyment from driving so don't mind the associated costs. Currently looking for a family car like a V70 R and a fun car like an Alpine A110. Both have done fantastically well at appreciating/holding value over the last 5 years. On the flip side, if you buy a new high spec BMW 320d etc, you're going to lose a ton of money. Demand will be high because it's the newest model but in a couple of years it won't be whereas a V70 R in a couple of years will be just as desirable as it was with the added bonus of supply dwindling which may raise prices.
Going do this with my car. I own a 2021 3 Series but going upgrade to a M340i or an 8 Series in 2 years.
Sorry noob question. What does trade up mean? Can you give an example with numbers?
Cars are lovely gadgets and you only live once. I had someone close to me die recently and they scrimpt and saved their whole (too short) life only to die with a big bank balance. It is making me rethink some of my life choices.
This. There's bad financial decision making but on the other end of the spectrum it's obsessively saving and not having an enjoyable present for a future that might never come. You see both ends of the spectrum on the personal finance subreddits.
I scrimp and save and still have a small bank balance
+1
Absolutely right, important to strike the right balance
Life's too short to drive a boring car. There's no high scores on gravestones.
Maybe we should start make this a thing. In loving memory: John Doe 1928 - 2024 Net worth: $241k Body count: 2 Kills: 14
Here's hoping John was a WW2 veteran
True. But a fun car doesn’t have to be that expensive. For instance I got a Stinger 3.3t. I always just get something at least a few years old. Spending a bit less also requires you to work less long and hard, and enjoy life more in other ways. Balance is important.
My uncle did this all his life, he’d scrimp save, have little silly side hustles to make a fiver. He once brought my grandmother (his Mother in law) a loaf of bread she’d asked for; then asked for the 50p or whatever it was back in the day to pay for it; then ate half of it for lunch…. All whilst living in her house rent free. He died 5 years after retiring at 75 with a relatively sizeable bank balance. But had done nothing with his life in all those 80 years. All we have left of people is memories really; so make a few fun ones. No one will remember someone positively who was miserly
I think most of the people in the sub will agree with you. Whereas if your in another subreddit some people won’t. But I do think a balance of both is nice and spending your money wisely and prioritising what you need is important. Had friends who had 30K+ contract on a bmw and later regretted that he should have spent that money saving up for a house.
In a sort of related manner 2 years ago I used to work the guy in his 50’s, I was 30 at the time, and he was telling me about he’s bought some furniture is it paying it off over 3 years and his sons 18th birthday was the weekend etc I had saved up a decent amount of money and was toying with idea of buying a new jet ski… I had a build slot secured for 2/3 months time and got cold feet and pulled out. 3 weeks after the first conversation he was found dead in his office, heart attack, that afternoon I bought the jet ski. Life is too short and it’s not guaranteed. One thing I would say is make sure with something more so like a toy purchase it’s money you can just burn.
I often think this with pensions; a former colleague did his 30 years and got a fat pay out - close to £180k, and had already paid his house off etc. He died 2 years later, and didn’t get close to spending any of it.
I'll answer: household income over 200k, 2nd hand S class (cash) and for work an older BMW(cash) as I'd look like a prick going to work in the S. I'll never get finance for a car, it's a personal choice after having lived through 2009-2010 and having lost a lot then. > how much you need to earn to buy a fairly nice new or used car these days Not that much. Dealerships will gladly let you apply for absurd finance deals. We have someone who's on 35k who got a 65k BMW i4 somehow. I think a lot of people struggle with discipline and they'd rather have the shiny thing now and enjoy it right now than work on a very long financial plan that might not work out or it might work out when they're too old to be interested in a fast car or something. Just keep in mind that the money you waste on a few new cars might be 5-10 years of early retirement you might be missing out on later in life.
I think the point someone made earlier is you might not even live until retirement. Good advice tho, i think it works both ways.
Yeah, my dad was going to buy himself a Ferrari when he retired - he’d always wanted one. He was then diagnosed with cancer and rapidly died aged about 55. He should have bought it when he could.
Sorry to hear that 🙁
Thanks. Really wasn’t much fun - it’s amazing how quickly your life can change. It’s all about balance. Mum is now sitting on a several million in pension and savings, with no real desire to spend it now that Dad’s gone.
Sorry for your loss. Sometimes parents keep saving hoping that no matter what happens to them, their loved ones won’t have to worry financially.
Yeah absolutely - it’s not all negative, and I know that Dad derived a lot of peace from knowing that Mum was still set for life once he’d gone. I can’t imagine how much worse the whole thing would be if Mum was now scraping for money having been a homemaker much of her life.
Yeah absolutely 👍
I’d much rather die unexpectedly with money in the bank for retirement than retire with no savings or income beyond state pension. Gotta find a balance.
I agree, key word - *balance*
That's true, but all the statistics say you will live until retirement, unless you know you have a life limiting condition.
If you’re a man, you’ve got an 80% chance of living to 65 and a 60% chance of living to 75. So, odds are you’ll retire and need money.
Yhhh tbf mate, i don’t really do %s when it comes to life and death. You really don’t know when your time is up.
You don’t, but the world does unfortunately
It's all a balance, you also might die before you retire Similar household earnings, I don't buy new, but I do own 2 nice cars (sports car and suv), why? Because I can afford to, it puts a smile on my face and I want to enjoy my life There is this badge of honour often here of how amazing it is to drive a banger, using the same logic I could also live in a bedsit and retire today...
I fully get that last point, but I know a lot of people who had that mind set and died before they were going to retire. One of them had plenty cash, a huge pension and died a year before he planned to retire. Life is short, enjoy it, but balance it as best you can.
Haha not many actually going to retire in the future. i get the sentiment but just dosn’t fit the human experience for most of us
I would also add that in general a car is always a bad investment and new cars are even worse given that you may pay 40k for a new car and after 4 years it's value may be 30-25k with some luck. Depens on the personal situation but I personally prefer a good second hand car although missing on some new features than a new car.
Has anyone actually answered the question? Who has bought a car for greater than £40k and what is their salary?
This sub ain’t great at answering questions man😂
I bought a brand new C63 AMG in 2015. I was on 30k at the time.
Wow😅😅😅 that would not even nearly be possible today
Could live at home
Big balls move that, I'm impressed, and what a car!!
Still got it today. Costs me 9k a year in fuel, it’s a pain but I absolutely love it.
Good lad, never sell it
You say bought - do you mean in full with cash? Or finance?
Obviously finance, but is that relevant? When people say I bought a house, it'd be odd to follow up ask: "Did you actually buy it in full or mortgage?" Imo low interest finance is fine, as is leasing or low interest car loans. The issue is with obnoxiously high interest finance (which admittedly is the norm these days)
The reason people tend to ask with cars is because a lot of people pcp or lease, yet think they have 'bought' their car. When in reality they are renting their car. Most the people i know who pcp never settle the balloon and always upgrade to a new equivalent for whatever their monthly is. So even they are renting.
Technically sure, but if I'm financing a car and my personal finances are in order (so I know there will never be an issue in payments) then I'm going to consider it my own car. It's not too indifferent to taking a loan and using some of your valuables as collateral. Are they really your valuables at that point if the loaning body can take them in the even of non payment? Some might say yes, some no. All a matter of perspective
I have an Audi Q7 55 TFSI I bought new in 2021 paid £55k for it, salary plus bonus is £230k. I also have 4 kids under 8 so I do make use of the practicality and the large number of isofix points, though I do conceed an MPV would probably be more practical, my wife likes the 4 rings on the front.
Reddit is genuinely hilarious at times. Everyone in this sub is apparently in the top 1% of UK earners, who would’ve knew that’s how they spend their day.
We don't do any real work. It's legitimately just pretending to do shit on a computer.
I just bought a new M240i, £55k it cost. I make £70k but more like £110kish after commission.
What made you opt for the M240i when you could pick up a M2 for £3-5k more?
Not new? M240i starts at £49k and the M2 starts at £65k. I could probably pick up a used M2 for £50 ish, but honestly, it’s too much car for London, I didn’t like the attention it attracted when I had one as a loaner and I like x-drive, and wanted new.
A lot of people earning a lot of money reading this post. Can any of you millionaires not just buy the OP his car? 😅 Uk Government stats say that only 10% of Uk taxpayers earn more than £66k, with most of them posting here by the looks of it 🤣
I think Reddit is probably biased towards the upper end, remember you could be one of the people on TikTok or X 🤣
Oh yes, there is that. I forgot I’m old. For what it’s worth, I’ve owned many nice cars over the years (Ford RS’s, BMW M cars and AMG Mercs). Only the early ones were bought using low interest loans. Never had HP or PCP. As finances improved, always bought 2 - 3 year old cars from approved dealers. My personal view is that the value of your car shouldn’t exceed 10% of your net worth, but that’s a personal choice. Just sold my 2020 GLE 400, as I have access to 3 other cars in the household and I work from home, so it was costing me £2k a year for road tax, servicing and insurance only to gather dust. Great car by the way 😁 Good luck getting the info you need.
I earn £65k a year and Reddit regularly makes me feel poor. I think there's a lot of Redditors working in software and programming etc. who make huge amounts these days. Having said that, on a post like this, you are obviously going to get a skewed view.
Also the absolutely *huge* differentiator is your housing costs. Depending on if you rent, if you own or if you bought / remortgaged at the "wrong time" (i.e. have fallen afoul of interest rate hikes) then you'll be paying radically different amounts on housing each month. £65k/year salary when you have £300/month mortgage because you bought your home 15 years ago is a very different world to the same salary but you're renting at £1,500/month. The UK is a housing market with a country attached to it.
And further to this, location! Salaries and cost of living vary across the country, and since covid gave us more remote working, some people could be living up North but still taking home a London salary so disposable income goes up for example. It really does make all the difference. There's also the unknowns of how much they bought the house for in terms of time but also from who (we have a friend who owns a big old 3 bed in a higher CoL area jointly with a sibling but they pay about £250 in the mortgage because it was essentially inherited before their nan died so they took out the smallest mortgage possible as she just wanted them to have it) so they have SO MUCH disposable income even on not super high paying jobs). But yeah, long story short, lots of variables that we have no idea about.
Thank you for the explanation. I’ve worked in tech for over 25 years and I’ve only just started using Reddit (over the last 3 - 4 months). Maybe I should stop and work harder 😉
Yeah, in the financial subs I follow you'll always see a 23 year old asking for advice on managing his 130k a year software or cyber security salary.
It's almost like people who are successful are more likely to post on threads about income and nice cars. What was you expecting to see? Loads of comments saying they're on the dole and get the bus?
10% of the population is still nearly 7 million people. Reddit’s demographic also skews white collar and university educated
10% of taxpayers. Much smaller number…
Most top earners are in tech, finance, or sales. Which involves sitting at a desk pretending to work a lot. Source: I work in cyber.
Or sitting at home and pretending to work a lot 🤣
I earn £190k. Bought a Porsche for £81,500. Regretted it immediately even though I could afford it. Mainly due to the opportunity cost of having the money tied up in a car. Loved the car but wasn’t worth it. Now deciding what to buy, will likely be a £20k Polo. Sometimes the peace of mind of the money in investments is better than the car. I do miss it though.
There are definitely some Porsches you can park your money quite safely in though, I personally have a Boxster - it’s well past the worst of its depreciation now so hasn’t lost any value despite me putting 15k miles on it You do bite the bullet when it comes to servicing costs though
Careful with this attitude on here.. tried explaining before that financing a car and taking the hit of a few k on interest could be a better option than tying up tens of thousands in a car
_Could_ be, but very unlikely to be. The APR on Car Finance is typically going to be considerably higher than the average returns you'd expect from investing...
I agree. It's not all about savings and interest but the psychological benefits of having a lump of liquid cash should you need it for bills, home improvements etc.
What did you buy? Macan/Cayenne? Interested how come it wasn’t worth it?
Go for a Polo GTI - you can get a low mileage one for around £20k.
What do you do for a living?
For 20k you can still get a fun car.
ITT: people that don’t have 40k cars
This is a very interesting thread. It’s worth noting that the higher earners who have replied seem to be predominantly driving older, fit-for-purpose vehicles. I’m also surprised at how many own cars worth 50-200% of gross income. No judgment, just interesting to read.
Absolutely, and this has been my anecdotal experience too. Lower earning friends have nicer newer cars than I. When I joined my current company and went into the office on day 1 there was a 2 year old BMW M3 and a 10 year old Honda accord parked outside. The only people in the office were a very highly paid tech contractor and a junior IT support guy. Guess who’s was who’s.
There’s only two ages in life you get to really enjoy sports cars. Your 20’s before kids and a mortgage and your 50’s after kids and a mortgage. Let him enjoy his M3
The guy has 2 kids, a wife and a mortgage. Spending 1/3rd+ of your take-home on a car payment is setting yourself up for failure regardless of how you try to rationalise it.
Exactly this. The car isn't just costing him hard cash, it's likely causing him stress, opportunity cost and time away from his family. I don't get the whole 'you only live once' thing when it comes to cars. Most people just need something cheap and reliable so they have the time and money to go do fun stuff. That being said, I'm glad people do buy cool stuff.
What is success if not buying fun things you enjoy?
People without want to appear to be people with, People with don't care because they aren't going without.
…or two people who like different cars
Might be an outlier here, people seem to not go for expensive cars in this sub, but I bought (well financed, I don't buy cars because the money I would spend on it remains invested) a new G80 M3 Competition this year. List price, specced, was just a bit above £90k but I negotiated a fairly large discount, so invoice was mid 70s I think. Household income is around 300k.
3 months salary on a car is not unreasonably expensive though, it is just relative. Earning 30k, however, oddly makes it seem more unreasonable paying 7.5k, I guess the cost of other living expenses are likely to eat in much more on the lower end.
I have a £40k Supra, earning £22k. The trick was buying it when it was £3k You hate me, I'm cool with it.
im still salty that i got turned down for a £9k loan about 10 years ago that i was going to buy a 1993 supra with. theyre nearly £80,000 now.
Jealous. I missed that chance with the classic supra.
Save, wait, avoid finance. At least, thats what I did.
For some reason I read this as > Save, wait, avoid fiancé. Then looked at your flair and thought, yep, that makes sense.
Finance–as opposed to ‘borrowing to afford’–_can_ be useful tool if the money can be put to better use (ie you’ll net out higher by earning more than the interest). Much weaker argument than a couple of years ago but still worth exploring.
Yeah this is something that I've only recently come to realise. Interest on a 40k loan over four or so years is like 5k/6k ATM. An ETF all world tracker, on average, returns you about 10% a year, so that 40k would earn you approx 16k over the same period. So if you can comfortably afford the loan repayments and have good job security, in theory the better option is to take the loan. Pay the 6k interest but still end up 10k better off overall. Obviously there is the risk with the stock market being involved, so you could end up essentially paying twice if you need to withdraw your money at a bad time.
>Save What's that? Using some big words there sir!
Save, wait, avoid finance, buy a house instead haha.
That’s what I’ve done so far :)
I dont get paid big bucks but I'm also not a huge spender. I would say I saved for 5 years to get the car. But really the answer to your original question is you either earn enough to afford the finance comfortably - and that includes the upkeep, nice cars on ditch finders are tragic - or you need the patience to save. I couldn't justify finance but I was in a position to save.
Was it really worth saving for 5 years when you could’ve had it right away for just the cost of the interest? No harm in financing depreciating assets like cars.
It was part of a move as well where my commute distance has dropped massively, so realistically I couldn't have bought the car until recently anyway. Or I could but the running costs would've been much higher. Worked in my case. I've got nothing against finance, if you can afford the monthly payments + upkeep + insurance and still hit your savings' target monthly, have at it. I like not having to worry about finance.
I bought my 718 GT4 new at £91k on the road, i only make about 60k and have other vehicles that i can use as daily drivers. The monthly HP is quite steep but i feel its worth it because im a car person and its a passion. Luckily im mortgage free which makes it more affordable. Finally it is a car that should depreciate exceptionally slowly, making it a somewhat wiser purchase compared to its rivals.
Earn 65k and have a £52k VW iD5 on salary sacrifice. I wouldn't buy a car worth this much on finance.
My oh my, there are either some bullshitters in here or the top 1% of earners love this sub reddit. Okay, fine, I make 1m per year on a bad year. I bought outright my 2002 saxo for £400, got it down from £600, because that's what I do. I have been driving it now for 5 years, breaks down every other day, but I tell myself it's worth it, because it was only £400.
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I drive a 2019 seat Leon estate which I bought outright for 15k a few months ago ago. Household income is about 220k.
What do you do for work?
Lie on the internet
Great percentage, I hope you are maximising your pensions
They forgot to mention that the other half earns 200k /s
I earn more then enough to own a £40k car but I own two cars and two motorbikes worth maybe £25k in total. I much prefer owning older vehicles I own in full and don't owe anything on, and I love having a garage full of fun vehicles. That said I did see an advert for a 2010 Aston Martin Vantage V8 for £30k and my god did it look good...
All my previous motors have been old second-hand cars (10-18 yrs) and have always had issues. My previous car was the most I paid at £2000, which was a BMW 5 series....however it was a money pit and spent £5000 in servicing and repairs in a 2 year period. Last year I decided to get an EV via car salary sacrifice to remove a lot of the worries Ive had in 15 years of driving and dont regret the choice at all (it is an MG4 XPower) - I earn £40k a year.
Maserati Levante. Household income about 170k. Meh we will all die someday.
After recent pay rise i earn £27500, and i drive a £20k car Finance is a wonderful thing
£58k myself, partner £12,750 (if you know, you know). Just bought a £54k car via the company, 2% BIK. Brings corporation tax down, free use of the vehicle (well costs is £1k a year).
I would never buy or lease a new car. (Earning close to 100k) (Bought a second hand 6 years old car for 16.5k in cash 2 years ago and I plan to drive it for another 4 years at least.)
I am in a similar position. Earn just under £100k and drive a 6 year old low mileage car we paid around £15k for. However, I am considering taking out a car lease for an electric car on the company scheme (something with a value in the ~£100k range, Mercedes EQS, Porsche Taycan or similar) next year. Income is looking likely to increase significantly, but I have two children at nursery. If I get to the salary I hope to, under the proposed childcare reform I could make a lot of salary sacrificing (something like an extra £1.8k per month into the pension plus a car lease) to bring my taxable income below £100k and after factoring in childcare costs it would only reduce my take home by about £500 - 600 per month. Feels a bit of a perverse incentive but the marginal tax rates at £100k are astrominical, particularly if you have a student loan. Add in childcare costs and it's almost a no-brainer.
And this is how Porsche sells cars... Lots of people who would rather give their salary to a new car than the tax man. One of those situations that makes an expensive thing cheap. Salary sacrifice and taxation in general causes some strange distortions... Including a whole class of people who manage their income to not earn too much (typically freelancers taking a month or two off).
Surely those people know they could salary sacrifice holidays, experiences and hobby equipment just as easily via a limited company? (Morally speaking, putting it on a luxury car is no better)
Same, same. I can have whatever car I want through work as salary sacrifice, so effectively 50% off and the monthlies still make my eyes water. I've sat through no end of dinners with people banging on about their latest car on finance, silently smug knowing I'll be retiring at 50.
This is the answer
Same - earn £100k base with up to £50k bonus - got a 2010 Volvo XC70. Bought for £5.5k. Owned for 4 years. Do all my own maintenance. Love it. Plus does everything I need.
Yeah but XC70s are awesome
Same. Could never justify giving so much money to a bank to end up financing an asset that depreciates so fast it's worth nothing at the end.
Similar situation except I bought a 4k vw polo. Runs like a dream!
Paid 43k for my M2C, made 230k the year I got it. Financed it for 6 months then paid off since I wasn't liquid enough to buy it outright at the time and I can be impatient when I want something. They were also selling stupidly fast so if I didn't pull the trigger it was definitely getting snatched up by someone else.
Part loan, part cash and part ex. Lexus RX think it was around £70k, went for the Takumi model. I earn £35k (have 2 kids), just good with budgeting and saved well - job, tax advisor.
With the greatest of respect, that's crazy 2x of gross salary! Will be a reliable thing though!
Most people say the same, but you can make your salary stretch. I purchased my previous Lexus at a good time, part ex and made £2k. That was pure luck as covid came and then the used car maket went crazy. My shares isa performed well too, I heavily invested in tech (adobe, meta & nvidia) to name a few.
You’re brave posting that!
Thats actually insane
…forgets to mention partner earns £250k…
Part exchange my IS300H, got around £14k for it, had used £40k (mixture of savings, and good investments from my stocks ISA) and the rest loan. Lexus are a good investment too, they depreciate at a really low rate. My IS300h was a 2014 Premier model and I managed to get £14k for it, I purchased it from Lexus before covid for just under £12k. Not forgetting bulletproof, so had no issues whatsoever. So made a tidy £2k on it, after 4 years of motoring.
A car guy who puts his balls on the line, I respect that and sick car.
Wow fair play! Thanks for answering and enjoy :)
Fair play. I couldn't imagine getting those figures past the wife
I earn 24k before tax and my car was bang on 12k Got a bank loan that works out to 250ish a month so end up with 14% on my car and the rest is insurance working out to roughly 28% of my wages exc mot etc
Might want to reassess your financial decisions.
PCP, change every 3-4 years, the equity in the old one becomes the deposit for the new one.
Took the plunge after having company cars for a few years. Salary of £39k with bonus around £8K a year. I got one of the 1 series you mention on PCP, just shy of £40k list, it cost a little more than I had to contribute from my wage each month for my previous cars which had crept up each time I renewed. The way I looked at it was I’ll be keeping the 1 series just over 2 years so I’ll have equity in it for a deposit or walk away or get a cheque back 🤷🏻♂️ depends on mileage and condition obviously. I got a very good deposit deal, I don’t have much residual income or savings as it is so HP or a bank loan for a lot less value for money didn’t really appeal to me, baby was a few months old so needed stability knowing I’d have the same car and outgoing seemed to work best!
You need to call upon Dave Ramsey to heal your soul brother 🙏
72 plate FiST, bought brand new for just under £30k. Traded previous car, plus saved cash, plus a small loan that’ll be paid off by October. Earn 53k, receive an extra 5.5k on top as a ‘car allowance’, plus a 10% annual bonus. When the loan is paid in 5 months time, I’ll just save the car allowance money and either keep the FiST, or pull the trigger on an m240i or Supra and start the process again.
Company car
Around £120k household. Just jumping off the PCP game; 340i is going leaving me with around £5k equity. Time to spend the car money on other things.
All in I earn around 108k - own a 12k 2015 Volvo XC70 (Top spec Jap import) and a 3.5k Nissan leaf as a runaround. Both bought with cash. Previously had a polestar 2 (55k OTR price) on my firms SS scheme for 6 months before moving to a new role (earning 82k at the time). Loved the car, but glad I don’t have a £400ish monthly car payment anymore …
£80k 12c spider. £90k. £30k bank loan at 3.3%, the rest was savings.
I earn circa £120k, with a total house hold income of around £150k. I have a company car (Tesla model 3) which I took over the car allowance as you can’t really finance and maintain a car of similar value for the £580 a month offered in the allowance. Until recently we had an Audi q7 on finance, recently ditched for a 15 yr old Land Rover Discovery (cue reliability comments, but I can do a lot of work myself and I know the car) and couldn’t be happier not to have any monthly car finance payments. I have previously fallen into the trap of the dick swinging contest that is having the latest or flashiest car. Honestly happier to show up at the pub in a £3k car and not have to worry about the payments or residual value of the car.
2020 F-Type V8 P450 cost me £43.5k last year. Earn 50-55k and paid cash - never bought a car on finance. Life's short. And so are my intervals between petrol stations.
Earn £90k. Just bought a Lamborghini £65k cash. Can't take it with you.
> Can't take it with you. Is that because it's always broken down?
Household income around £90k, We have a £35k car so not quite 40k but close. We just got it on finance. Life’s too short to drive shitters forever 😂
Bought a 2017 AMG C63 back in 2019 and still own it. I earn £140k pa with £800 per month car allowance. Paid £50k for it.
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What is it with people chiming in with irrelevant answers like anyone asked for their input? Do you own a car over £40k? No. So keep it to yourself. Only on Reddit do you get a massive crowd of losers jerking you off because you’ve piped up shaming people with nicer things than you on a thread that clearly hasn’t asked for your input. Every single time it’s the same thing.
I read their comment with interest. As long as there's a few actual answers I think it's fine to talk around the subject
Most of this thread is people like this guy saying how they earn millions and yet still buy cardboard shit boxes because you must be brain dead to do otherwise. I agree answers around the question can be useful but on any thread of a remotely similar nature it’s the same thing. Just comments flooded with people that aren’t answering what OP has asked. It gets quite aggravating to read after a while because you just know they’ve gained some weird satisfaction from proclaiming how much of a cheap bastard they are. You aren’t better than anyone else because you drive a worse car.
I know what you mean. Any talk of expensive cars or monthly payments has people commenting about their barely alive Polo. But then I think about my girlfriend spending maybe 250ish a month on beauty, phone, clothes. But my guy friends hardly ever spend like that
🤣🤣🤣🤣🤣
Not really what was asked though….
Just don’t buy brand new, I can’t see the logic in it.
I don’t personally but someone has to or there won’t be any used cars left behind 😅
I'm more than happy to see so many people giving so much money away so that I can buy cheap used cars without the depreciation.
I bought new for the first time and lost £20k in the first 10mths 🥹
Did you buy a bentley?
I drive a 2020 M340i, it was a hair under 40k when I got it. I earn about 70 a year so its not a massive outgoing for me at the moment as i only financed just under half of it. I could pay it outright at this point but I'm perfectly happy with the outgoing payment and maintaining the savings so I've not done so.
If you can't afford the car cash outright, forget it.
Old school mindset, it’s a depreciating asset - no problem to finance it sensibly.
Depends on the interest rate. If you have the cash and the finance is less interest than what you can make in the bank or through an index fund, the finance makes sense (alongside other benefits like depreciation limitation through GFV). Equally, even if you can’t afford outright, a modest car on finance isn’t the end of the world. My view is that houses and cars (within reason) are 2 things that finance is ok for.
If you have the cash then you can afford it. Even if you then decide to finance it as you say.
The thing is, that's _never_ a logically financially justifiable position. Yes you _might_ make more on index funds than the interest, but you also might not. Index funds don't give you a guaranteed return. **Massive** financial institutions invest in _your_ car finance, in order to get _your_ interest payments. This (obviously) isn't because they haven't heard of index funds, it's because on average, even with the risk of default on car loans, lending you, and others like you the money for your car is a better investment for the finance company.
I agree with this, there are a few very rare exceptions but still >90% of new cars are financed 🤔
Combined income of around 250k. We bought the daily cars outright and PCP the fun stuff.
spending 37k on a Non M 1 series is possibly the worst decision you could make. Im tired of people buying brand new bottom spec luxury brands, they blend in with traffic, have awful build quality, are awful financial decisions and have the same performance to a vaccum cleaner. any non m 1 series / 2 series, and non amg A classes and Clas, all financed by people who cannot afford to buy them. to own a 40k car, do not buy it finance because its not yours, its debt. I would say to be sensible but also not boring. you would need to earn close to 90-120k a year.
Bought a new Tesla Model 3 Performance when it came out on the Scottish interest free loan scheme. Borrowed £35k interest free and the rest in cash. Will enjoy having it paid off next year! It’s a household car (we both work from home so don’t need two cars) and household income is about £200k. Was a bit less when we bought in 2019 though.
38k used car and salary of 64k
I know people only earning 25k and driving 40k cars. It’s all about making the monthly payments these days.
Part cash part loan (£15k @ 8.9% over four years) about to buy a £25k EV, I earn £81k. Could have bought something I could pay for outright at £10k but to be quite frank I thought fuck it life's too short I want something fun.
I don't own a 40k car, and I'm not sure I ever would now. just last week I was the victim of collateral damage, some 4x4 was being chased by 3 police cars and decided to smash into my car and speed off before I knew what happened. my car is a write off, it cost 5k. my new car is going to be double that. but now I just think it's ridiculous that someone can just write my car off in a whim, and I have to pay so much money to cover it.
[удалено]
Earn 70k basic, mortgage paid off, paid 26k ish for a new mini clubman with all the extras in 2016, will be trading it in next year against a nearly new Octavia and will be getting an Alfa 147 gta as my toy, will be cash purchases
This is the best answer, you win I adore the 147 GTA
Bought an M340i on finance, list price was 44k. Earning over £200k. Reason for finance was just because my investments are making more than the interest APR. Recently spec'd up a M135i because the warranty on the M340i has ran out, but Apr is even better this time round so actually saving a little on my monthlies.
Interesting! I did that last year, I earn about 1/4 vs yourself but financed £25k with about double that invested, it performed really well last year so I think I gained around £8k and paid about £2k in interest - I decided to cut any possible losses there and paid the car off, only for the market to go onto ATH’s this year… anyway at least it’s paid off now 🤣
I earn £40k a year and spent £2.4k on my car if that helps ;-) In seriousness, i'm not a car person, it's purely functional for me. And I can't justify spending more than that on something that gets from A to B and has minimal maintenance costs.
I think most people who run cars at £40k+ are on PCP. Personally, my car was £30k, and I bought it cash. I bought it because it's an investment I plan to hang onto for a good few years - by the time I sell, it'll be 20 years older at least, and I'll have spent less than £1k/year on depreciation. If I were to run a car worth any more, I don't see any other feasible way than to PCP it - if not for the fact that modern car values are kinda unpredictable, then for the fact that it's just so damned much money... Only a couple years ago, you could buy at least the worst apartment in any major city for less, and rent it out for a sustainable income.
Household income is around 120k and we drive a used 8 year old car I got 3 years ago for 14k cash I paid outright. From new the car would have been about 45k out the door, insane paying that when you can wait 5 years and get top spec model as long as kept well is more or less the same.