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It still surprises me that America has such a culture of leasing cars they can't afford for hundreds, if not thousands of dollars a month. Here in the UK if yo

It still surprises me that America has such a culture of leasing cars they can't afford for hundreds, if not thousands of dollars a month. Here in the UK if you said you were going to buy a car, most people would instantly assume you mean second hand. There's not much of a culture of buying or leasing new cars here, and even less of leasing cars that you really can't afford (outside of petrolheads anyway)

scottLobster 7y ago
As an American it surprises me. I'm in the top 13% in terms of income/household and I've never bought or leased a new car in my life. It's well known (at least to people I know) that if you want to save money you buy used, ideally with cash, although you can sometimes save a little money with financing if you get lucky. The issue seems to be in previous generations cars were more of a status symbol for many (as well as being generally more affordable), so lots of people were raised with that expectation. So they buy/lease flashy overpriced German maintenance money-pits and scoff at used Toyotas because they're boring. That or they're just trying to put on a veneer of financial success as part of their "hustle".
- q084yn39cptyth 7y ago
  I'll say for a long time I was the same way, until I bought a Prius. A little while after I bought it, prices actually went up over what I purchased it for, and I was getting letters from Toyota dealerships offering to buy it back from me above my cost. It's declined in value since then, but still runs well (knock on wood). This isn't saying used cars aren't worth it -- they definitely are -- but for certain scenarios I think the choice is maybe more complicated than I thought for a long time.
  - r00fus 7y ago
    Well, in 2009 my Dad's also had the same experience with the dealer who wanted to give him $5k more than he paid for his year old Silverado - I think it was due to the overall market undergoing massive inflation (not reported as "core inflation") due to QE and other stimulus efforts. I doubt the same would happen now with an economy halted.
- nv-vn 7y ago
  Or people just enjoy having a car that they like? If you can afford it and you spend a lot of your time in your car, why not get one that you enjoy driving?
  - scottLobster 7y ago
    It's the "if you can afford it" part that's at issue here. Sure if you have the money do whatever you want, but lots of people are leasing/financing cars because they can technically "afford" to spend 1/4 of their take-home salary on a monthly payment when they could never dream of buying the car outright even with years of savings. They're living at their means instead of within their means, let alone beneath their means. So the moment any financial difficulty comes their way they're screwed. It's especially irrational if it's just for extra enjoyment beyond necessary comfort. Someone who takes out a personal loan to buy all the blu-rays he wants would be called financially irresponsible, yet it seems perfectly reasonable to some to pay hundreds of dollars a month extra for that BMW or Range Rover.
- BluePen7 7y ago
  The other aspect is a lot of older luxury cars were also very well built, and older economy cars were some real bare-bones shitboxes. My father enjoyed driving his Mercedes, so I figured I ought to enjoy a German luxury car as well. I expected to pay a certain premium on parts, and obviously for premium fuel and synthetic oil, but that I'd get a much more solid feeling car in return. The problem is, the Mercedes he drove were from the 80s and 90s, so parts markup aside, they were basically Toyota reliable. The German car I bought was from the mid-2000s, and nowhere near as well built or reliable as a 90s Mercedes, even in present day. I'd even owned a 1986 Mercedes that was still reliable in 2010, I'd also owned a 1992 Mercedes that was also reliable, and continued to be so after I sold it to a friend who drove it for all of university (2010-2015). But it was the 7 year old one that basically fell apart despite me buying one with full dealership service history, then sinking endless money in making sure all the repairs were done properly with OEM parts, on top of my religious maintenance as I'd believed German cars were only problematic due to neglectful owners. So, it went about as poorly as you'd expect.
- kyuudou 7y ago
  Similar here and I leased a car once. Never again. Always used. There was a poster higher up the thread who flips cars that knows what they are talking about. You don't have to be at that level but just some common sense and research gets you a solid, clean used vehicle that you can depend on for years if you don't care about any ego shit and you take care of it. This and houses are our biggest impediments to real wealth as North Americans. We dump so much of our earned wealth that could be used to save and invest in our futures instead padding the pockets of car salesmen and banks.
nv-vn 7y ago
I suspect this has to do more with social circles than country. Obviously there are more people buying new cars, or else there wouldn't be any used cars for anyone to buy. I think the same is largely true in the US -- lots of people would never buy a brand new car, but there's also many people who would only buy a car brand new. The break down is probably 30/70 or 40/60.
dimator 7y ago
This is very eye opening, thanks. Yes, in the US, the implication is the opposite: "I bought a car" is taken to mean brand new. I guess part of it is that it's a very car oriented culture, but the other part is that people value owning a new shiny thing over financial cautiousness.
thebruce87m 7y ago
“82% of new cars in Britain are bought using relatively new "PCP" loans, which let drivers pay less than the full value of the car.” - https://www.businessinsider.com/uk-car-finance-pcp-mortgage-market-morgan-stanley-2017-7?r=US&IR=T https://www.businessinsider.com/uk-car-finance-pcp-mortgage-... So while I agree if someone says they are buying a “new car” it just could mean “new to them” I do think a lot of people do lease. I see a lot of young people with new BMWs etc, probably paying with money that they will regret not having put into their pension in years to come. Or maybe I should have lived a little bit more at their age.
- gimmeThaBeet 7y ago
  I don't get how that isn't basically just a lease? Except that the buyer gets something that looks like a call option that sounds like it's nearly guaranteed to be below expected (normal, maybe not in rough times) value? Mainly because I've never seen a lease where the dealer doesn't ask you if you want to buy it.
BluePen7 7y ago
I think there's two confounding factors there, in the US parking is usually plentiful and right out front (or visible), so you're always seen in the vehicle you pull up in. It can be a part of your identity, both for yourself, and socially. Americans also spend a lot of time in their cars, I went from a short commute to a long commute (1 hour each way), and found I got almost exponentially more critical of my car the longer the commute. Suddenly the practical vehicle I didn't mind driving 15 minutes, was an eyesore to look at after an hour, and the NVH (noise, vibration, harshness) wears on you exponentially with time. I started browsing cars to buy that would have been borderline financial suicide for how much I made, just because of how important the comfort and aesthetics became to me. Couple this with their tendency towards financing things, and how cheap automotive related expenses are in the US, and it's the perfect storm. I ended up changing jobs to one 10 minutes from my house, and it's downtown so parking is just done at various pay lots a few blocks from my office so nobody ever sees what I drive, and suddenly what I drive is irrelevant again, I was back to being content with my 15 year old Camry.
- sershe 7y ago
  Heh, when I learned to drive in the USA I got a Honda Fit (I'm 6'4"). The plan was to drive it for a year and switch to a car more appropriate for a high-flying' techie, like a BMW X5. I found out after test driving BMWs and Audis I don't see much difference between those cars and the Fit other than some bogus identity around it. It's just driving. I've taken many 6-12 hour long non-stop trips in the Fit (e.g. SF to Seattle where I only left the car once to pump gas, the 2nd time I had to get gas was in Oregon; many trips to Eastern Sierras from SF, etc.) and I think it's fine.
- ChrisRR 7y ago
  That's an interesting thought, but what part of that requires you to buy a new car? Car technology moves notoriously slowly, and the comfort and features of a new car compared to a 3 year old car at 2/3rd the price is negligible. (outside of the move to electric cars anyway)
pansa2 7y ago
Plenty of people must be buying new cars in the UK - the average age of cars is only 8 years, and if you buy a used car it will be a UK model. That’s quite different to somewhere like New Zealand, where the average age is twice that and almost nobody buys a brand new car - instead most cars are imported second hand from overseas.
LgWoodenBadger 7y ago
Where do all the used cars come from to support such a used-car market?
maxsilver 7y ago
> Here in the UK if you said you were going to buy a car, most people would instantly assume you mean second hand. This is true in America as well. I think wealthy Americans forget that regular Americans often live their whole lives while never owning a "new" car. (This is even true of car loans in the US -- the majority of those are for used vehicles).
rconti 7y ago
Who buys them, then? Obviously someone is buying them new. Frankly, as an American, the UK's car market seems nuts to me. The kinds of cars that folks get as "company cars" is laughable.
- ChrisRR 7y ago
  I couldn't say for certain, but I feel like people in the UK run cars much longer than Americans as they don't do as many miles. It's not uncommon to see cars in the UK around 15-20 years old (often not older as there was a trade-in scheme years back) The rule of thumb in the UK is a car gets about 10k miles per year and "modern" cars tend to last about 150-200k miles before they're not worth the repair costs. For example, my car is a 2005 Focus which I recognise is older than most cars on the road, but costs me a couple hundred quid in maintenance each year and I have no intention in upgrading until it becomes uneconomical

scottLobster 7y ago

As an American it surprises me. I'm in the top 13% in terms of income/household and I've never bought or leased a new car in my life. It's well known (at least to people I know) that if you want to save money you buy used, ideally with cash, although you can sometimes save a little money with financing if you get lucky. The issue seems to be in previous generations cars were more of a status symbol for many (as well as being generally more affordable), so lots of people were raised with that expectation. So they buy/lease flashy overpriced German maintenance money-pits and scoff at used Toyotas because they're boring. That or they're just trying to put on a veneer of financial success as part of their "hustle".

q084yn39cptyth 7y ago
I'll say for a long time I was the same way, until I bought a Prius. A little while after I bought it, prices actually went up over what I purchased it for, and I was getting letters from Toyota dealerships offering to buy it back from me above my cost. It's declined in value since then, but still runs well (knock on wood). This isn't saying used cars aren't worth it -- they definitely are -- but for certain scenarios I think the choice is maybe more complicated than I thought for a long time.
- r00fus 7y ago
  Well, in 2009 my Dad's also had the same experience with the dealer who wanted to give him $5k more than he paid for his year old Silverado - I think it was due to the overall market undergoing massive inflation (not reported as "core inflation") due to QE and other stimulus efforts. I doubt the same would happen now with an economy halted.
nv-vn 7y ago
Or people just enjoy having a car that they like? If you can afford it and you spend a lot of your time in your car, why not get one that you enjoy driving?
- scottLobster 7y ago
  It's the "if you can afford it" part that's at issue here. Sure if you have the money do whatever you want, but lots of people are leasing/financing cars because they can technically "afford" to spend 1/4 of their take-home salary on a monthly payment when they could never dream of buying the car outright even with years of savings. They're living at their means instead of within their means, let alone beneath their means. So the moment any financial difficulty comes their way they're screwed. It's especially irrational if it's just for extra enjoyment beyond necessary comfort. Someone who takes out a personal loan to buy all the blu-rays he wants would be called financially irresponsible, yet it seems perfectly reasonable to some to pay hundreds of dollars a month extra for that BMW or Range Rover.
BluePen7 7y ago
The other aspect is a lot of older luxury cars were also very well built, and older economy cars were some real bare-bones shitboxes. My father enjoyed driving his Mercedes, so I figured I ought to enjoy a German luxury car as well. I expected to pay a certain premium on parts, and obviously for premium fuel and synthetic oil, but that I'd get a much more solid feeling car in return. The problem is, the Mercedes he drove were from the 80s and 90s, so parts markup aside, they were basically Toyota reliable. The German car I bought was from the mid-2000s, and nowhere near as well built or reliable as a 90s Mercedes, even in present day. I'd even owned a 1986 Mercedes that was still reliable in 2010, I'd also owned a 1992 Mercedes that was also reliable, and continued to be so after I sold it to a friend who drove it for all of university (2010-2015). But it was the 7 year old one that basically fell apart despite me buying one with full dealership service history, then sinking endless money in making sure all the repairs were done properly with OEM parts, on top of my religious maintenance as I'd believed German cars were only problematic due to neglectful owners. So, it went about as poorly as you'd expect.
kyuudou 7y ago
Similar here and I leased a car once. Never again. Always used. There was a poster higher up the thread who flips cars that knows what they are talking about. You don't have to be at that level but just some common sense and research gets you a solid, clean used vehicle that you can depend on for years if you don't care about any ego shit and you take care of it. This and houses are our biggest impediments to real wealth as North Americans. We dump so much of our earned wealth that could be used to save and invest in our futures instead padding the pockets of car salesmen and banks.

nv-vn 7y ago

I suspect this has to do more with social circles than country. Obviously there are more people buying new cars, or else there wouldn't be any used cars for anyone to buy. I think the same is largely true in the US -- lots of people would never buy a brand new car, but there's also many people who would only buy a car brand new. The break down is probably 30/70 or 40/60.

dimator 7y ago

This is very eye opening, thanks. Yes, in the US, the implication is the opposite: "I bought a car" is taken to mean brand new. I guess part of it is that it's a very car oriented culture, but the other part is that people value owning a new shiny thing over financial cautiousness.

thebruce87m 7y ago

“82% of new cars in Britain are bought using relatively new "PCP" loans, which let drivers pay less than the full value of the car.” - https://www.businessinsider.com/uk-car-finance-pcp-mortgage-market-morgan-stanley-2017-7?r=US&IR=T https://www.businessinsider.com/uk-car-finance-pcp-mortgage-... So while I agree if someone says they are buying a “new car” it just could mean “new to them” I do think a lot of people do lease. I see a lot of young people with new BMWs etc, probably paying with money that they will regret not having put into their pension in years to come. Or maybe I should have lived a little bit more at their age.

gimmeThaBeet 7y ago
I don't get how that isn't basically just a lease? Except that the buyer gets something that looks like a call option that sounds like it's nearly guaranteed to be below expected (normal, maybe not in rough times) value? Mainly because I've never seen a lease where the dealer doesn't ask you if you want to buy it.

BluePen7 7y ago

I think there's two confounding factors there, in the US parking is usually plentiful and right out front (or visible), so you're always seen in the vehicle you pull up in. It can be a part of your identity, both for yourself, and socially. Americans also spend a lot of time in their cars, I went from a short commute to a long commute (1 hour each way), and found I got almost exponentially more critical of my car the longer the commute. Suddenly the practical vehicle I didn't mind driving 15 minutes, was an eyesore to look at after an hour, and the NVH (noise, vibration, harshness) wears on you exponentially with time. I started browsing cars to buy that would have been borderline financial suicide for how much I made, just because of how important the comfort and aesthetics became to me. Couple this with their tendency towards financing things, and how cheap automotive related expenses are in the US, and it's the perfect storm. I ended up changing jobs to one 10 minutes from my house, and it's downtown so parking is just done at various pay lots a few blocks from my office so nobody ever sees what I drive, and suddenly what I drive is irrelevant again, I was back to being content with my 15 year old Camry.

sershe 7y ago
Heh, when I learned to drive in the USA I got a Honda Fit (I'm 6'4"). The plan was to drive it for a year and switch to a car more appropriate for a high-flying' techie, like a BMW X5. I found out after test driving BMWs and Audis I don't see much difference between those cars and the Fit other than some bogus identity around it. It's just driving. I've taken many 6-12 hour long non-stop trips in the Fit (e.g. SF to Seattle where I only left the car once to pump gas, the 2nd time I had to get gas was in Oregon; many trips to Eastern Sierras from SF, etc.) and I think it's fine.
ChrisRR 7y ago
That's an interesting thought, but what part of that requires you to buy a new car? Car technology moves notoriously slowly, and the comfort and features of a new car compared to a 3 year old car at 2/3rd the price is negligible. (outside of the move to electric cars anyway)

pansa2 7y ago

Plenty of people must be buying new cars in the UK - the average age of cars is only 8 years, and if you buy a used car it will be a UK model. That’s quite different to somewhere like New Zealand, where the average age is twice that and almost nobody buys a brand new car - instead most cars are imported second hand from overseas.

LgWoodenBadger 7y ago

Where do all the used cars come from to support such a used-car market?

maxsilver 7y ago

> Here in the UK if you said you were going to buy a car, most people would instantly assume you mean second hand. This is true in America as well. I think wealthy Americans forget that regular Americans often live their whole lives while never owning a "new" car. (This is even true of car loans in the US -- the majority of those are for used vehicles).

rconti 7y ago

Who buys them, then? Obviously someone is buying them new. Frankly, as an American, the UK's car market seems nuts to me. The kinds of cars that folks get as "company cars" is laughable.

ChrisRR 7y ago
I couldn't say for certain, but I feel like people in the UK run cars much longer than Americans as they don't do as many miles. It's not uncommon to see cars in the UK around 15-20 years old (often not older as there was a trade-in scheme years back) The rule of thumb in the UK is a car gets about 10k miles per year and "modern" cars tend to last about 150-200k miles before they're not worth the repair costs. For example, my car is a 2005 Focus which I recognise is older than most cars on the road, but costs me a couple hundred quid in maintenance each year and I have no intention in upgrading until it becomes uneconomical