Saving money & Buying or leasing first car

[Madmaxx]

So Ive finally got to point I can save some good money for things in the future, two things would be a car and a house of my own. £200 per month on both to save for.

So for the house I thought help to buy ISA, but the bonus from that can't be used against deposit or solicitor fees.
Which catches people out, and kind of invalidates that option for me.
But either way saving monthly will probably be the way to go on that, Im thinking investing in a stocks and shares ISA.

So then my first car, I'll be 29 and getting my licence soon.
Thought of getting a 2nd hand 1.2 car from a dealership on autotrader, but someone at work mentioned leasing if I can get alot included in the monthly payments.
I dont need a great car as its my first and its for getting around and visiting family.

I don't need either straight away so I could try for a car first for example, this is just getting things in place.

Any thoughts?

 

[Bodhi]

Leasing is a fairly hassle free way of getting into a new car, which will be under warranty so you won't need to worry if anything goes wrong, many lease deals include tax and servicing too so there is often little to worry about other than maybe tyres.

Bear in mind there will be an upfront payment of 3 to 6 months installments, and when the lease is over there is no retained value, so you have to stump up again or extend the lease.

Looking around a Mini Cooper should be doable for your budget, and will be a nicer place to be than your average 2nd hand supermini .

Any idea what sort of car you're after?

 

[Moriath]

What ya have to watch for with leasing is when you return the car at the end they will go over it with a fine toothed comb to see if there is anything they can sting you with for repairs that they dont deem fair wear and tear

 

[Job]

It wasnt that bad ..they charged me 45 for a knackered tyre..80 quid to respray a deeply scratched bumper and 90 because we lost the original wireless key.
Id have had to take a resale hit for those three on a ordinary sale probably more than that.

 

[Gumbo]

If you've reached a point in your life when you have some spare capital to allocate then please read :-

The Richest Man in Babylon.
Rich Dad Poor Dad.

Then start making decisions.

I wish I had read them in my twenties, instead I waited until I was forty. So much lost time and opportunity.

 

[Job]

I worked with a guy who had possesions way beyond his income...we both earned tge same but he had a 400K house, which in the posh Liverpool suburbs in the 2000's was a frikin nice house.
Everyone else had 250K houses.
He made his money work..but fuck me what a tiresome twat he was..his wife hated him, he was entirely motivated by envy and would take stuff back for the tinniest details and have 30 min long arguments on the phone because his Matalan shirt had a loose thread.
No one would work for him, he eas constantly ringing around for tradesmen , they had all blacklisted him.

 

[Billargh]

If you've reached a point in your life when you have some spare capital to allocate then please read :-

The Richest Man in Babylon.
Rich Dad Poor Dad.

Then start making decisions.

I wish I had read them in my twenties, instead I waited until I was forty. So much lost time and opportunity.

Care to elaborate on why?

 

[Moriath]

Care to elaborate on why?

I watched some youtube bits of the rich dad guy and you really have to be of the risk taker mind set to get anything out of what he says tbh.

 

[Cadelin]

If you are trying to make your money go further, it doesn't make sense to get a new car (regardless of if you buy or lease). Cars lose a lot of their value as soon as you buy them. Getting yourself a 3 year old (30k miles) car will probably cost half the price of the same car new. It doesn't matter how fancy the finance deal is, it will still cost you more on a new car.

Also while plenty of people are happy with leasing, it isn't your car.

I don't understand why you don't want to go for a help to buy ISA. The BONUS can't be used for the exchange deposit or solicitors fees etc but the amount you save can and you will need to save this anyway. Think of it as £3k to put towards your house warming party...

 

[Moriath]

I bought a ten month old car and got like 8k or so off the list price new and then paid off the loan once my trade in value gottaken i to account.

Now have a debt free car and no payments just the running costs. And its 4 years old only done 27k miles. Will see me a long time without buying a new one i reackon.

Leasing is just a cost on going forever

 

[Bodhi]

If you don't want to go for a new car than good old Hire Purchase still makes a lot of sense - you can still spread the payments, but there is no balloon payment at the end, and when the agreement is over the car is yours. My last payment on the 1 Series goes out this month, then the Beast is mine. I got a fairly awful APR due to some financial issues I had in the past, but if you've been sensible it shouldn't cost you too much.

 

[Gumbo]

I watched some youtube bits of the rich dad guy and you really have to be of the risk taker mind set to get anything out of what he says tbh.

Read the book, you'll realise that you really don't. It's just about recognising what are assets and what are liabilities. The person that buys assets will end up rich, those that buy liabilities will end up poor. It's a mindset thing which doesn't come naturally in these days of easy credit.

Start with the Richest Man though. It'll take you about an hour and a half to read cover to cover and will open your eyes to compounding and the ease with which you can start to build something from nothing.

Trouble is that none of this shit is instant gratification or will impress your neighbours (Newsflash, they aren't impressed by shiny shit anyway). So you'll only thank me in 20 years, but you will thank me.

 

[Job]

The problem is modern cars are so expensive to fix..once it drops out of warranty you have a financial time bomb.

 

[Job]

Yeah like my mates Rangy that he paid 15K for and cost him 6500 in repairs in one year.

 

[Moriath]

The problem is modern cars are so expensive to fix..once it drops out of warranty you have a financial time bomb.

But its a useful if depreciating asset. You have to have some form of mobility. So why not have something thats yours that may break down in 5 years and cost you 2k to fix. Or pay 300 quid a month for 5 years. Which is cheaper?

 

[Bodhi]

Yeah like my mates Rangy that he paid 15K for and cost him 6500 in repairs in one year.

Wow, a massive bill on a 2nd hand Range Rover? Say it ain't so. 30 seconds on the internet will tell you all you need to know about what Range Rovers are like out of warranty.

Whereas my 10.5K BMW has cost me 600 quid in 4 years outside of usual maintenance.

 

[Moriath]

Not had anything on my vw either.

 

[Job]

I pay 130 a month for the wifes C1...delivered to the door with 8 miles on the speedo and 15K annual mileage on it..had the last one for three years, not a hiccup..basically you are paying for peace of mind, it just works...never lets her down and we actually use it for Cornwall trips cos it flies down the country roads and does 60mpg everywhere.

 

[Moriath]

Its yr choice. To pay forever and own nothing. But drive a new car. Or buy a second hand one and dont have cntinuous outgoings.

 

[Scouse]

But its a useful if depreciating asset. You have to have some form of mobility. So why not have something thats yours that may break down in 5 years and cost you 2k to fix. Or pay 300 quid a month for 5 years. Which is cheaper?

£300/month, 12 months, 5 years: £18,000 pounds. Eighteen thousand.

Get something for a few grand. Get it checked out properly. Even if it costs you 2k in a few years time then it'll still be cheaper.

My 13k Civic Type-R is still going at 200,000+ miles, barely serviced, had it since 2003, worked it out the other day - it's cost me about £70/month to buy.


The British are dumb when it comes to cars.

 

[dysfunction]

I bought my Vauxhall second hand for 9k. It had like 5000 miles or so and it's still going strong 10 years later.
It's probably worthless now but only need to spend on MOT, Tyre's and other general maintenance.

If you buy a new car make sure it's not been "made on a Monday" otherwise you will have endless problems with it.

 

[Bodhi]

£300/month, 12 months, 5 years: £18,000 pounds. Eighteen thousand.

Get something for a few grand. Get it checked out properly. Even if it costs you 2k in a few years time then it'll still be cheaper.

My 13k Civic Type-R is still going at 200,000+ miles, barely serviced, had it since 2003, worked it out the other day - it's cost me about £70/month to buy.


The British are dumb when it comes to cars.

5 Year leases are pretty rare in the real world - 3 years is more typical, and the example quoted can actually make sense, providing you are after a new car and not second hand.

For eg, £300 a month will get you into a BMW 320d (not the most inspiring car BMW offer, but good for this example).

£300 a month over 36 months is £10,800. Add in 3 months up front deposit, say £11,700.

A brand new BMW 320d M Sport is listed at around 32k, although brokers will get one closer to 26k.

Given a 3 Series will normally lose 50% of its value over 3 years, the maths suggests leasing will work out cheaper than buying new and taking the hit on depreciation.

If you want a new car, then leasing can be an incredibly cheap way of doing it. However it will never be cheaper than buying second hand. That works very well for some people, others like to have a new car, covered by a manufacturers warranty, in the spec they want, safe in the knowledge it's been maintained properly. Just remember if it wasn't for people like that, there would be no second hand cars for the rest of us to buy.

(Although I am thinking about buying new next time round, as finding a manual BMW with a decent spec and colour is proving to be aright ballache).

 

[Scouse]

So, what you're saying there @Bodhi is that driving around in a new car is fucking expensive.

@Madmaxx is after his first car, second hand and has a couple of hundred quid a month to save for it. Leasing would just be throwing money away IMO. £200/month for 36 months is still £7200 - which is more than half of what I paid for my car, fifteen years ago. If I paid £200/month for 15 years I'd have spent £36,000 on cars, instead of £13,000. Even if you add ten grand for servicing (lol, maybe 4?) then I'd still be an entire 13 grand better off - which, guess what, is what my car cost me in the first place

Even if I'd have bought a pup that broke down all the time and had to sell it and buy another car I'd still be better off...

 

[Madmaxx]

If you've reached a point in your life when you have some spare capital to allocate then please read :-

The Richest Man in Babylon.
Rich Dad Poor Dad.

Then start making decisions.

I wish I had read them in my twenties, instead I waited until I was forty. So much lost time and opportunity.

Thanks for the Babylon recommendation, I got it over the weekend and its an interesting book.

 

[Madmaxx]

Thanks for the replies I asked some people at work as I conveniently work at a financial management company, I will go with the help to buy ISA first as its capped at £200 a month so I can do that and something on the side.

And put the other £200 into a stocks and shares ISA, to go towards a car/ house/ emergency fund as and when needed.

I won't be getting a new car, as it'll be my first and as you all say it will depreciate anyway.

I'll have weigh up the pro's and cons of buying a used car outright, or leasing one.
But I do prefer the idea of buying a used car since leasing you usually need a initial lump sum anyway, and I quite like the idea of actually owning something to show for my work.

 

[Ormorof]

No one has asked this but do you need a car? Or is it more of a time saving thing? (Spending money on things that save you time or reduces stress is best way to spend )

 

[Job]

I only lease the wifes car because Ive had years of her moaning about the endless niggles in 2nd hand cars shes had, there was always something wrong and I was always fixing the fucking thing.
I put up with every clunk, rattle and non working component in my Jeep because I kbow I can fix it whenever.
The 2nd time she broke down with the daughter in the car on the motorway was the end of it...I had to go for a new car and my life is now Zen.

 

[Bodhi]

So, what you're saying there @Bodhi is that driving around in a new car is fucking expensive.

@Madmaxx is after his first car, second hand and has a couple of hundred quid a month to save for it. Leasing would just be throwing money away IMO. £200/month for 36 months is still £7200 - which is more than half of what I paid for my car, fifteen years ago. If I paid £200/month for 15 years I'd have spent £36,000 on cars, instead of £13,000. Even if you add ten grand for servicing (lol, maybe 4?) then I'd still be an entire 13 grand better off - which, guess what, is what my car cost me in the first place

Even if I'd have bought a pup that broke down all the time and had to sell it and buy another car I'd still be better off...

It is, however some people are happy to spend the extra. Plus you have to bear in mind, over that 15 years, your 36k would have got you 5 different cars. Or a very tasty secondhand one (think BMW M3 rather than 320d )

 

[Gumbo]

Thanks for the Babylon recommendation, I got it over the weekend and its an interesting book.

Should be as mandatory as maths and english at highs school in my opinion. It would have changed my life entirely if I'd read and took in on board in my twenties.

 

[Scouse]

It is, however some people are happy to spend the extra. Plus you have to bear in mind, over that 15 years, your 36k would have got you 5 different cars. Or a very tasty secondhand one (think BMW M3 rather than 320d )

Considering this is a thread about doing things cheaply...

I do get why the brits in particular are obsessive about cars but I'm on the side of the fence that says buy wisely, but save your cash.

The £23,000 I didn't spend on pouncing around in a succession of cars, which are after all boxes you sit in to get to the place where the actual fun is, has alternatively been pissed up the wall having experiences and obtaining assets that mean I won't have to work as long, freeing myself for even more fun.

I think the alternative is madness, frankly. A bit like some women obsessing over shoes and clothes and fashion in order to make themselves look good, rather than working on having fun and making themselves fun to be around. Victims...