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I have always wondered who buys new cars anyway. I am fortunate to be a high earner in the UK relatively speaking (top 2 or 3%) yet the idea of spending £15-20

I have always wondered who buys new cars anyway. I am fortunate to be a high earner in the UK relatively speaking (top 2 or 3%) yet the idea of spending £15-20k on what is essentially a "starter car" (e.g. Toyota Yaris) let alone £30-35k on a normal petrol family car (e.g. ford focus) is just crazy to me. What a waste of cash. EVs start at more like £40-50k for bottom-of-thr-barrel brands like Kia or Hyundai, let alone a premium marque. Prices seem very high. Who are buying these new?! Someone must be as they end up on the used market. I presume they are leased as company cars or something first.

omginternets 3y ago
European cities are outstanding in terms of public transportation. A significant portion of the developed world has to deal with long, frequent commutes, or less-dense, less-reliable public transportation. In the aggregate, Americans, Aussies, Russians, Chinese, South Africans, Brazilians, etc need cars in a way that English, French, German and Italian generally don't.
- tonyedgecombe 3y ago
  >European cities are outstanding in terms of public transportation. The UK isn't. I mean it's better than the US but way behind the rest of Western Europe.
  - omginternets 3y ago
    You're missing my point. On a world scale, the UK has outstanding public transportation. Corollary: much of the world needs a car in a way that you don't.
    - tonyedgecombe 3y ago
      Well you lumped the UK in with France, Germany and Italy. I'm not sure about Italy but the UK is way behind France and Germany. >Corollary: much of the world needs a car in a way that you don't. I live without a car in the UK and can tell you it isn't easy. I manage because I'm prepared to ride a bike on reasonably busy roads and I'm time rich. The public transport is irregular, indirect and unreliable. The only exception is London.
      - deleted 3y ago
        [deleted]
      - omginternets 3y ago
        Yes, I’m speaking in generalities. Your specific case isn’t terribly relevant.
bittercynic 3y ago
I don't know about UK, but among people I know in CA it seems like the poorest are the ones buying fancy new cars with huge, long-term, high interest loans. The people in my circle who seem to have their feet under them financially are driving cheap used cars.
kube-system 3y ago
I have historically bought used, but I bought a new car during the pandemic. Trade in values were good, financing rates were still good (at that point), I got to skip the mental load of evaluating the condition of the vehicle, it was a treat to have new features, and the fuel economy was superior. I would consider both new and used vehicles for my next purchase. There are tradeoffs either way.
reducesuffering 3y ago
In my experience, a majority of new car "purchases" are people barely able to afford them, financing them at an extra $300 - $800 / month. Housing purchases have ended up so unreachable in the west coast that a new car is the next big item for a status boost.
- pc86 3y ago
  Nobody is paying $800 extra every month on their car.
  - reducesuffering 3y ago
    Yes, there are many people who have leases or financing at $800/mth for just a car, instead of a paid off $5k econo-box. Extra, meaning it's additional on top of their fixed survival expenses.
    - pc86 3y ago
      Is this the fringe r/personalfinance opinion that you should buy some 15 year old car in cash and never ever have any sort of car payment? Having an $800/mo car payment and "paying $800 extra every for a car" are objectively very different things. And implying that you can get any sort of reliable used vehicle for $5k just shows that you haven't done this in 15-20 years or so. I'm not even sure you can get one for $10k now and if I was in the market I'd be budgeting $20-25k at an absolute minimum.
      - reducesuffering 3y ago
        > reliable used vehicle for $5k just shows that you haven't done this in 15-20 years or so I purchased an '07 Prius for $5k just a few years ago. They go for ~$7k now. These cars are low registration cost, very low insurance cost, fuel efficient (45mpg), very low maintenance, and high longevity (I've personally witnessed them hit 550k miles). That is the baseline in which, yes, an $800/mth payment is mostly financially excessive; a luxury. Especially at 6 - 15% car loan interest these days.
peferron 3y ago
We bought a new Honda Fit for $18.5k in 2014. It was a full redesign with nice improvements compared to previous model years (reverse camera, bluetooth audio, etc). Since then we've averaged 33 mpg with zero garage visits outside of routine maintenance. We probably could have saved some money by buying used instead, but over a decade of ownership I doubt that it would amount to more than a few hundred dollars per year.
deleted 3y ago
[deleted]
helij 3y ago
We don't buy. We lease and change for a new car every 3-4 years. I consider vehicle the same type of expense as Netflix. More expensive of course but it just goes to the same 'expense' category as other subscriptions.
- mattlondon 3y ago
  At least in the UK leasing seems like a real waste of money? So that ford focus is £300/month for 4 years of use, plus an initial fee of £2k. So after 4 years you've spent £16k and then have no car. Why not spend that 16k on a used car? My last car I bought used was £7k and 3 years old and I've had it for 11 years now - it still has about £1k of value left in it, so it so far has cost me about £500-600 a year with only basic maintenance costs. I figure the most leases are taken out by businesses.

omginternets 3y ago

European cities are outstanding in terms of public transportation. A significant portion of the developed world has to deal with long, frequent commutes, or less-dense, less-reliable public transportation. In the aggregate, Americans, Aussies, Russians, Chinese, South Africans, Brazilians, etc need cars in a way that English, French, German and Italian generally don't.

tonyedgecombe 3y ago
>European cities are outstanding in terms of public transportation. The UK isn't. I mean it's better than the US but way behind the rest of Western Europe.
- omginternets 3y ago
  You're missing my point. On a world scale, the UK has outstanding public transportation. Corollary: much of the world needs a car in a way that you don't.
  - tonyedgecombe 3y ago
    Well you lumped the UK in with France, Germany and Italy. I'm not sure about Italy but the UK is way behind France and Germany. >Corollary: much of the world needs a car in a way that you don't. I live without a car in the UK and can tell you it isn't easy. I manage because I'm prepared to ride a bike on reasonably busy roads and I'm time rich. The public transport is irregular, indirect and unreliable. The only exception is London.
    - deleted 3y ago
      [deleted]
    - omginternets 3y ago
      Yes, I’m speaking in generalities. Your specific case isn’t terribly relevant.

bittercynic 3y ago

I don't know about UK, but among people I know in CA it seems like the poorest are the ones buying fancy new cars with huge, long-term, high interest loans. The people in my circle who seem to have their feet under them financially are driving cheap used cars.

kube-system 3y ago

I have historically bought used, but I bought a new car during the pandemic. Trade in values were good, financing rates were still good (at that point), I got to skip the mental load of evaluating the condition of the vehicle, it was a treat to have new features, and the fuel economy was superior. I would consider both new and used vehicles for my next purchase. There are tradeoffs either way.

reducesuffering 3y ago

In my experience, a majority of new car "purchases" are people barely able to afford them, financing them at an extra $300 - $800 / month. Housing purchases have ended up so unreachable in the west coast that a new car is the next big item for a status boost.

pc86 3y ago
Nobody is paying $800 extra every month on their car.
- reducesuffering 3y ago
  Yes, there are many people who have leases or financing at $800/mth for just a car, instead of a paid off $5k econo-box. Extra, meaning it's additional on top of their fixed survival expenses.
  - pc86 3y ago
    Is this the fringe r/personalfinance opinion that you should buy some 15 year old car in cash and never ever have any sort of car payment? Having an $800/mo car payment and "paying $800 extra every for a car" are objectively very different things. And implying that you can get any sort of reliable used vehicle for $5k just shows that you haven't done this in 15-20 years or so. I'm not even sure you can get one for $10k now and if I was in the market I'd be budgeting $20-25k at an absolute minimum.
    - reducesuffering 3y ago
      > reliable used vehicle for $5k just shows that you haven't done this in 15-20 years or so I purchased an '07 Prius for $5k just a few years ago. They go for ~$7k now. These cars are low registration cost, very low insurance cost, fuel efficient (45mpg), very low maintenance, and high longevity (I've personally witnessed them hit 550k miles). That is the baseline in which, yes, an $800/mth payment is mostly financially excessive; a luxury. Especially at 6 - 15% car loan interest these days.

peferron 3y ago

We bought a new Honda Fit for $18.5k in 2014. It was a full redesign with nice improvements compared to previous model years (reverse camera, bluetooth audio, etc). Since then we've averaged 33 mpg with zero garage visits outside of routine maintenance. We probably could have saved some money by buying used instead, but over a decade of ownership I doubt that it would amount to more than a few hundred dollars per year.

deleted 3y ago

[deleted]

helij 3y ago

We don't buy. We lease and change for a new car every 3-4 years. I consider vehicle the same type of expense as Netflix. More expensive of course but it just goes to the same 'expense' category as other subscriptions.

mattlondon 3y ago
At least in the UK leasing seems like a real waste of money? So that ford focus is £300/month for 4 years of use, plus an initial fee of £2k. So after 4 years you've spent £16k and then have no car. Why not spend that 16k on a used car? My last car I bought used was £7k and 3 years old and I've had it for 11 years now - it still has about £1k of value left in it, so it so far has cost me about £500-600 a year with only basic maintenance costs. I figure the most leases are taken out by businesses.