How do people afford a car?

[Bletchleyite]

It’s a figure that’s utterly meaningless without more context.

If you buy a brand new luxury model and allow yourself to be fleeced on a PCP deal, perhaps. Anyone spending a few hundred to a few grand on a modest used car and running it cheaply will spend way less than this.

My point was more that it isn't a sensible model because the fixed-ish costs don't substantially change if your mileage changes. The sensible model is "membership fee" plus per-mile - the lower HMRC rate (25p?) gives a better idea for the latter.

 

[43066]

My point was more that it isn't a sensible model because the fixed-ish costs don't substantially change if your mileage changes. The sensible model is "membership fee" plus per-mile - the lower HMRC rate (25p?) gives a better idea for the latter.

That’s true, but 50p per mile also seems to assume much higher fixed and variable costs than need to be the case. I can only think it’s based on buying brand new where depreciation is by far the biggest cost.

To do annually 10,000 miles at 50p per mile equals £5k *per year*. Fairly clearly if you’ve bought a modest efficient car for half that amount and run it cheaply for a few years before selling/scrapping, you won’t have spent anything approaching 50p per mile when you dispose of it.

 

[A0wen]

Are most of the people in the UK so rich that they can afford private cars?

Before we can put a car on the road, we already need to pay insurance which, for the lowest-risk groups, already costs £700+ upwards per year. And we need to spare a few hundred pounds for general maintenance as well, that's already £1000 p.a. before any depreciation.

You're joking - I'm probably one of the "lowest risk" groups - middle aged man, don't live in the inner cities, long, clean driving record. And I'm paying less than half that for a 2 year old, petrol engined Vauxhall Insignia SRi.

Then we come the car price. Of course you can buy very old cars having more than 10 years and 100k miles which have already been fully depreciated at just £1000, but how reliable are they? Anything less than that we have to include depreciation as well, and also the cost of capital. If we buy a 5-year car, the price will be commonly around £4000 - £5000, which if we run it until it becomes 10 years old, the depreciation itself will cost another £1000 p.a.

There are two schools of thought - one is that you don't buy, you effectively "lease" - hence the plentiful number of PCP offers around. Now I think PCPs are the spawn of the devil and have caused more problems than they'll ever solve, but when you can pick up a VW Golf on a PCP with a deposit of less than £ 3k and monthly payments of circa £ 250 on a brand new car, you stop worrying about the maintenance costs at least, because apart from an annual service, you're unlikely to see any other such costs unless you're doing moonship mileage which means new tyres.

The alternative is a bank loan - and there are some of those with ~3% interest which makes them a very cheap way to borrow.

You're wide of the mark if you think you can buy "a 5-year car, the price will be commonly around £4000 - £5000" - a quick look on Autotrader at a 2017-2018 Ford Focus (so an "average" family car) there are a couple at the £ 6k mark but either with mileage of over 100k (so been averaging 20k / year) or a Cat N/ Cat S write off. Similar story with a Vauxhall Astra - a few hundred less than a Focus but the sub £ 6k stuff is either moonship mileage or insurance repair.

And finally we need fuel to run the car. Given how expensive petrol price is, at £1.7 per L, even for a very economic car at 8 L / 100 miles, that's £13.6 to run 100 miles. If we commute 30 miles per day for 232 days per year (52 weeks of 5 days work - 28 days of holidays), that's £946.56, nearly another £1000 p.a. even with minimal holiday travel.

But people don't look at petrol costs as an annual cost - mainly because they aren't paid annually. Most will focus on a weekly or monthly cost.

If you're doing ~150 miles a week, in a modern hatch like a Focus or Astra, depending on the version you will see 50mpg - so that's 3 gallons for a week. 3 gallons is ~ 14 litres - so about £ 24 a week. That's the way most people will think of it and frankly unless you can walk or cycle to work, you're going to be paying to travel to / from work. So the measure will be how does that £ 24 stack up against the bus or train and in turn what's the time / convenience penalty of using the bus / train.

And, don't forget, the biggest car expense apart from depreciation is the PARKING!!! A search at Stashbee reveals that the market price of a monthly parking is around £200 - £300 pcm, which is approximately £3000 p.a. So the total cost of car ownership is as high as £6000 p.a. - approximately £9000 of pre-tax salary at 20% income tax rate + 13.5% National Insurance rate. This is absolutely a luxury to most people.

But it depends on where you're parking and what the situation is at your workplace - many workplaces have free parking, particularly public sector ones (see schools).

The "market price" of parking may be £ 200 - 300 pcm, but that's absolutely *not* what most people are paying. And employee parking permit in Milton Keynes is £ 630 for a year (£ 52.50 / month). Even Central Manchester you can park for ~ £100 a month next to the inner ring road. It's only Central London which has lunatic parking prices.

Sorry, but I don't see how a car is affordable for those earning below £50000 p.a. Even if earning that much, the money is better put into buying a home instead, which nowadays costs £400k upwards. Of course it's possible buy a home at just £150k in somewhere in rural Kent, very far away from any decent economic activity, but then you will need to commute by high-speed train as using a car to the City will take you more than 2 hours in peak hours.

BIB - The average UK house price is £ 277k - so about 1/3rd less than your estimate. And that's the average.

If you look at Northampton you can find "traditional" 3 bed terraces near the town centre for ~ £ 200k, you can find 70s 3 bed semis in nice areas for £ 230k - £ 240k.

Anyone travelling into London will do it by train. But by car you have, within 1 hour, Milton Keynes, Leicester, Coventry, the east end of Birmingham (around the airport) and Oxford.

 

[The exile]

Are most of the people in the UK so rich that they can afford private cars?

Before we can put a car on the road, we already need to pay insurance which, for the lowest-risk groups, already costs £700+ upwards per year. And we need to spare a few hundred pounds for general maintenance as well, that's already £1000 p.a. before any depreciation.

Then we come the car price. Of course you can buy very old cars having more than 10 years and 100k miles which have already been fully depreciated at just £1000, but how reliable are they? Anything less than that we have to include depreciation as well, and also the cost of capital. If we buy a 5-year car, the price will be commonly around £4000 - £5000, which if we run it until it becomes 10 years old, the depreciation itself will cost another £1000 p.a.

And finally we need fuel to run the car. Given how expensive petrol price is, at £1.7 per L, even for a very economic car at 8 L / 100 miles, that's £13.6 to run 100 miles. If we commute 30 miles per day for 232 days per year (52 weeks of 5 days work - 28 days of holidays), that's £946.56, nearly another £1000 p.a. even with minimal holiday travel.

The above already totals £3000 p.a., which can already get you nearly 4 annual train tickets between Hendon and Stratford, about 14 miles by car.

And, don't forget, the biggest car expense apart from depreciation is the PARKING!!! A search at Stashbee reveals that the market price of a monthly parking is around £200 - £300 pcm, which is approximately £3000 p.a. So the total cost of car ownership is as high as £6000 p.a. - approximately £9000 of pre-tax salary at 20% income tax rate + 13.5% National Insurance rate. This is absolutely a luxury to most people.

The rent has already eaten most of the annual income for most workers in the UK. For a family requiring a 2-bedroom flat, which usually costs £1200 pcm (which isn't even in the City centre and requiring travel to work), then another £150 for food each adult, and £100 for household bills, a salary of £30000 p.a. - a typical figure of full-time employment - can just get a family of 2 adults and a child the most basic needs of living.

Sorry, but I don't see how a car is affordable for those earning below £50000 p.a. Even if earning that much, the money is better put into buying a home instead, which nowadays costs £400k upwards. Of course it's possible buy a home at just £150k in somewhere in rural Kent, very far away from any decent economic activity, but then you will need to commute by high-speed train as using a car to the City will take you more than 2 hours in peak hours.

So far - yes, they are.

 

[TUC]

The reliance of railways is so great in the UK that it is usually the only form of public transport in many rural places, where rural buses have largely become non-existent after deregulation. Unlike in Hong Kong where buses are always a backup option when the railway fails, if the railway fails here we are basically doomed that we can go nowhere.

I can't see the railway being irrelevant unless there are minibuses serving every village.

Really? Can you name which places in the UK have a rail station but not a bus service?

 

[miklcct]

Really? Can you name which places in the UK have a rail station but not a bus service?

I don't mean this, but the rural bus services are so fragmented that if the railway fails, using buses alone can seldom get you across towns and cities.

 

[43066]

Really? Can you name which places in the UK have a rail station but not a bus service?

To be fair there will be many places which have a rail station but no *useable* bus service. Parts of Kent again being a good example: there are regular hourly trains along the Marshlink line, but bus services from somewhere like Appledore or Headcorn are effectively useless.

EDIT: but clearly far more places will have neither railway nor useable bus services!

 

[AlterEgo]

I don't mean this, but the rural bus services are so fragmented that if the railway fails, using buses alone can seldom get you across towns and cities.

The vast, vast, majority of rural places have no railway service whatsoever anyway.

 

[miklcct]

I don't know how you have calculated your figures but they seem way out to me! My wife and I have each run a car for the last 30 years; neither of us have ever come close to earing £50k ! !

Insurance is around £300, not the £700+ you quote.
A car with 100k miles on the clock would be well under £1000.
Our depreciation rate is more like £400pa than the £1000 you quote.
How much do we spend on parking per month? Maybe £20. I don't know where you get your figure of close to £10 per day! (Are you assuming parking for a daily commute/work?)
And who eats £150 of food per week? Hulk Hogan?

How do people here have their car insurance so cheap? If I can find £300 p.a. insurance I would have already bought a car when I lived in Bournemouth? I'm trying to get quotes of the lowest risk cars, 28 years old, living in town centre with off-road parking, 3 years of licence and no NCB. Nothing below £600.

 

[Bletchleyite]

How do people here have their car insurance so cheap? If I can find £300 p.a. insurance I would have already bought a car when I lived in Bournemouth? I'm trying to get quotes of the lowest risk cars, 28 years old, living in town centre with off-road parking, 3 years of licence and no NCB. Nothing below £600.

Those three will be your problem. You will find it goes down significantly when you pass 30 and 5/10 years of experience (25 and 30 will be big jumps). And living in a town centre is considered high risk.

You also talk a lot about originating from an Asian megacity (I forget which one) - being an immigrant can in itself cause an increased premium with some insurers. Though I don't know if you originate outside the UK or just spent some time living in Asia.

Edit: Also you say no NCD. NCD typically gives you 70% discount at 5 years, when quoting an annual figure it's normally quoted with NCD as most drivers have it, though you may be being offered introductory discount.

 

[Watershed]

How do people here have their car insurance so cheap? If I can find £300 p.a. insurance I would have already bought a car when I lived in Bournemouth? I'm trying to get quotes of the lowest risk cars, 28 years old, living in town centre with off-road parking, 3 years of licence and no NCB. Nothing below £600.

I concur; you're not going to get into the realms of £300 a year for insurance until you reach your 30s, have held your licence for at least 5 years and have several years' NCB. Plus being in a safe area helps!

But I do think you've overestimated some of the other costs.

I have a car, not because I strictly speaking need one, but because it gives me a lot more flexibility than relying on the railway, buses or taxis all the time.

It costs me on the order of £1000 a year to run, plus depreciation. But ultimately the convenience of just being able to turn the key and drive somewhere cannot be underestimated. To me, that is worth every penny.

 

[trainmania100]

I spend around £70 a month on petrol, this was around £50 but due to petrol prices this has gone up.
My car tax is £20 a year and insurance around £700, probably going down as I am now 25. Another £100 for breakdown cover. £350 for Mot and service.

So for a year running my car costs me around £1600 which isn't far off a months wages.

I can see how owning a car when youre under 25 can be very pricey as obviously the living wage is a bit lowe especially apprentice etc, but I guess it all depends on your income and expenses and how much you use it

 

[miklcct]

BIB - The average UK house price is £ 277k - so about 1/3rd less than your estimate. And that's the average.

If you look at Northampton you can find "traditional" 3 bed terraces near the town centre for ~ £ 200k, you can find 70s 3 bed semis in nice areas for £ 230k - £ 240k.

Anyone travelling into London will do it by train. But by car you have, within 1 hour, Milton Keynes, Leicester, Coventry, the east end of Birmingham (around the airport) and Oxford.

A simple search on Rightmove suggests I have to go as far as Ashford - the end of the HS1 - to have a 3-bed property at this price if I search in the direction of Kent. The price in Ebsfleet is already £300k+. Stratford is even more expensive, at £500k+.

As others have pointed out you don’t need to be rich to own a car. You ever wondered why there are so many cars here or ever looked at some of the people who drive them?

No it doesn’t. My insurance is about £340 a year and that is given that I have one speeding offence on my licence too.

Yeah, an average second hand car will cost a few hundred pounds a year at the MoT (or getting new tyres etc).


Most people buy second hand cars (and many lease new ones). If you get a car for about £4000 it’ll last you three years and probably halve in resale value, so £1000 is a little on the high side, but yes depreciation is certainly a thing. It’s much lower of course the older a car you buy.

Yes of course if I'm finding the cheapest car to run I'll get one which has already been fully depreciated (such as those 10+ years old with more than 100k miles), so I will budget £0 for depreciation.

How much are you spending on train fares without a car?

About £220 in the last month - but I had abnormally high mileage as well, 3000 miles travelled on the railway in a single month. At 8 L / 100 miles that will be £400 in fuel alone.

My mileage will return normal after I move away from Bournemouth next month.

It’s really not a luxury to have a car. Open your eyes and see how many people have them.

Where you plucking these figures from? Bournemouth?

Kent and Sussex

Maybe in the small, relatively affluent part of the country you have chosen to experience so far, it does.

£150K for the same house in rural Kent? Kent in the south east of England? You want to be going up north for those prices!

£150K is the figure for a starter home in rural Kent, not for a 3-bed which will be about £250K.

The railway’s biggest competitor is the private car and it spent a whole year telling people to make journeys in their cars. It was very damaging.

Oh hell.

 

[A0wen]

How do people here have their car insurance so cheap? If I can find £300 p.a. insurance I would have already bought a car when I lived in Bournemouth? I'm trying to get quotes of the lowest risk cars, 28 years old, living in town centre with off-road parking, 3 years of licence and no NCB. Nothing below £600.

Out of interest, what specific cars have you been looking at ? Just because a car is Group 1 or 2 insurance, doesn't always mean it's going to be cheaper than a car in Group 4 for example.

 

[miklcct]

Out of interest, what specific cars have you been looking at ? Just because a car is Group 1 or 2 insurance, doesn't always mean it's going to be cheaper than a car in Group 4 for example.

Citroen C1

 

[RichJF]

Mod Note: Posts #1 - #39 originally in this thread.


Are most of the people in the UK so rich that they can afford private cars?

Before we can put a car on the road, we already need to pay insurance which, for the lowest-risk groups, already costs £700+ upwards per year. And we need to spare a few hundred pounds for general maintenance as well, that's already £1000 p.a. before any depreciation.

Then we come the car price. Of course you can buy very old cars having more than 10 years and 100k miles which have already been fully depreciated at just £1000, but how reliable are they? Anything less than that we have to include depreciation as well, and also the cost of capital. If we buy a 5-year car, the price will be commonly around £4000 - £5000, which if we run it until it becomes 10 years old, the depreciation itself will cost another £1000 p.a.

And finally we need fuel to run the car. Given how expensive petrol price is, at £1.7 per L, even for a very economic car at 8 L / 100 miles, that's £13.6 to run 100 miles. If we commute 30 miles per day for 232 days per year (52 weeks of 5 days work - 28 days of holidays), that's £946.56, nearly another £1000 p.a. even with minimal holiday travel.

The above already totals £3000 p.a., which can already get you nearly 4 annual train tickets between Hendon and Stratford, about 14 miles by car.

And, don't forget, the biggest car expense apart from depreciation is the PARKING!!! A search at Stashbee reveals that the market price of a monthly parking is around £200 - £300 pcm, which is approximately £3000 p.a. So the total cost of car ownership is as high as £6000 p.a. - approximately £9000 of pre-tax salary at 20% income tax rate + 13.5% National Insurance rate. This is absolutely a luxury to most people.

The rent has already eaten most of the annual income for most workers in the UK. For a family requiring a 2-bedroom flat, which usually costs £1200 pcm (which isn't even in the City centre and requiring travel to work), then another £150 for food each adult, and £100 for household bills, a salary of £30000 p.a. - a typical figure of full-time employment - can just get a family of 2 adults and a child the most basic needs of living.

Sorry, but I don't see how a car is affordable for those earning below £50000 p.a. Even if earning that much, the money is better put into buying a home instead, which nowadays costs £400k upwards. Of course it's possible buy a home at just £150k in somewhere in rural Kent, very far away from any decent economic activity, but then you will need to commute by high-speed train as using a car to the City will take you more than 2 hours in peak hours.

I can't tell if this is a deliberate anti-car rant or not with theoretical figures. I'm 31, I own both a car & a motorcycle, have a mortgage & it's all on single income under £40k pa. I'm not wealthy but I know how to stay happy & not to get into major debt while living in a nice area of Sussex.

You don't need to be wealthy to have a reliable, economical car. My car is 16yrs old & is only 1.2litres, but it's perfectly fine for commuting & motorway driving. If you don't care about new tech or looking fancy then a cheap, decent car is 100% available to you. Sure my car probably only worth £1k tops but who cares if it still works? You get into another wormhole of buying used: Buy an older car with service/repair history & it's likely been looked after better than a 3yr old leased car.

Even with the cost of fuel today, it works out MUCH CHEAPER than commuting on the train to my workplace. Still costs under £40 for a full tank in my car & it will last 350 miles. It's near £5000 for a season ticket for same journey that costs me £40 fuel for 2-3 weeks. That's under half the price annually of the train. Unless you drive something completely inappropriate for your age (ie 17/18 yr olds leasing Audis/Mercs/BMWs) then the insurance isn't going to set you back much. A Yaris, Aygo or small hatchback isn't going to cost the earth.

Same story goes for my motorbike. Big sportbike but it's 17 yrs old & exactly the same story as my car. Still worth nearly £3k if I ever want to sell it for some short-term money as it's been looked after. It actually works out cheaper owning both & splitting the journeys between the two than reguarly using the train!

 

[JohnMcL7]

Insurance can be strange and not as tied to the insurance group as it should, I changed from a Skoda estate to a Mazda estate and both cars were the sporty version with exactly the same horsepower with similar insurance groups but I was surprised to find the Mazda was far cheaper to insure, under £200 even with a named driver who has points on their license.

Like others my costs are much lower than stated with around £400-500 for the yearly service, MOT and repairs/tyres/brakes etc., £320 VED and £175 insurance. I don't do many miles so it is a bit of a luxury but when I've been pricing up train tickets when I want specific times fairly near to travel the costs can be huge compared to the fuel and the car's standing costs are quickly paid for. In addition it's a very plush car which is much more comfortable to travel in and crucially I can easily take the bike which is next to impossible these days on the train.

 

[Watershed]

Even with the cost of fuel today, it works out MUCH CHEAPER than commuting on the train to my workplace. Still costs under £40 for a full tank in my car & it will last 350 miles. It's near £5000 for a season ticket for same journey that costs me £40 fuel for 2-3 weeks. That's under half the price annually of the train. Unless you drive something completely inappropriate for your age (ie 17/18 yr olds leasing Audis/Mercs/BMWs) then the insurance isn't going to set you back much. A Yaris, Aygo or small hatchback isn't going to cost the earth.

Obviously there are plenty of places that aren't feasible to take the train to, but you'd have to have a pretty long commute for the season ticket to cost more than £5000 from East Grinstead. A season to London Terminals is ~£3000 a year, another £1000 if you want a Travelcard. It's certainly amongst the more affordable commutes out there.

 

[Ken H]

Out of interest, what specific cars have you been looking at ? Just because a car is Group 1 or 2 insurance, doesn't always mean it's going to be cheaper than a car in Group 4 for example.

The attractiveness of a car for stealing is a big factor in premiums. So whether its a kid wanting to drive a hot hatch or a car stolen to order for export, that can bump up your premiums. Find a boring unfashionable car. Skoda?
Before you buy, play on one of the comparing websites and put in various cars and see the difference in premiums. But also play with addresses. You would be surprised what a few streets move can do.
And carefully see how much mileage you put down. Putting a lower mileage can reduce premiums. But DONT LIE or you may not be covered if you have an accident.
And do you really need to have you mum/girlfriend,uncle albert on your policy? That can bump it up too.

Lastly, for a banger, consider a comprehensive policy with a whopping excess (more than cars value) rather than third party fire and theft. Often comes out cheaper.

 

[miklcct]

I can't tell if this is a deliberate anti-car rant or not with theoretical figures. I'm 31, I own both a car & a motorcycle, have a mortgage & it's all on single income under £40k pa. I'm not wealthy but I know how to stay happy & not to get into major debt while living in a nice area of Sussex.

You don't need to be wealthy to have a reliable, economical car. My car is 16yrs old & is only 1.2litres, but it's perfectly fine for commuting & motorway driving. If you don't care about new tech or looking fancy then a cheap, decent car is 100% available to you. Sure my car probably only worth £1k tops but who cares if it still works? You get into another wormhole of buying used: Buy an older car with service/repair history & it's likely been looked after better than a 3yr old leased car.

Even with the cost of fuel today, it works out MUCH CHEAPER than commuting on the train to my workplace. Still costs under £40 for a full tank in my car & it will last 350 miles. It's near £5000 for a season ticket for same journey that costs me £40 fuel for 2-3 weeks. That's under half the price annually of the train. Unless you drive something completely inappropriate for your age (ie 17/18 yr olds leasing Audis/Mercs/BMWs) then the insurance isn't going to set you back much. A Yaris, Aygo or small hatchback isn't going to cost the earth.

Same story goes for my motorbike. Big sportbike but it's 17 yrs old & exactly the same story as my car. Still worth nearly £3k if I ever want to sell it for some short-term money as it's been looked after. It actually works out cheaper owning both & splitting the journeys between the two than reguarly using the train!

What are your house price, mortgage payment and annual car insurance cost?

I'm looking for a home in my desired area (somewhere within zone 3 on the Thameslink line) but even a starter home costs £200k to buy, and it's just a studio flat.

 

[Starmill]

Yes more than 80% of people have car access i.e. a car in their household, and of course many households have multiple cars (even if they only have two adults). The rationale isn't difficult to understand, it's that if you use your car for a whole year for basically everything you need, which is an option for almost everyone countrywide except for travel to Central London, it's going to add up cheaper than public transport fares plus taxi fares for a year, even if you use taxis very sparingly.

This has been explained politely several times now. The situation is a very disappointing one but that's just the way it is. Public expenditure on transport, and also to an extent the tax system has for decades worked to encourage driving and discourage using public transport. Fuel duty is today 6p per litre lower than it was in January 2011, but railway fares have risen by significantly more than CPI inflation during that time. It will be even worse next year. The price of rail services will continue rising at a much higher rate than general inflation and an even higher rate compared to wage growth, but the service will keep getting worse as a consequence of the cost cutting that's being imposed. This is before we've considered how poor nearly all bus services in England are outside of London.

I can't tell if this is a deliberate anti-car rant or not with theoretical figures.

I think it's more likely that the OP, although they have received a quite the number of polite explanations, just doesn't have any experience of living in the UK outside of the very small slice of England approximately between Bournemouth and London, which is much wealthier and often much more expensive than most of the rest of the country.

 

[Ken H]

My car is 2010. I paid £5k for it and it had 70k miles. I thrashed it when i was working away so now it has done over 150k miles. But since 2018 i have been 100 WFH so I do little mileage.
As the car has done loads of miles and its old, as am I, and I live in a village the insurance is under £200/year. Even tho its a 2 litre turbo diesel.
I have it serviced regularly (one per year!) and it passes MOT each year easily.
So it owes me nothing so cheap motoring.
So many people like me with old cars are not forking out anywhere near the costs quoted above.

 

[A0wen]

You don't need to be wealthy to have a reliable, economical car. My car is 16yrs old & is only 1.2litres, but it's perfectly fine for commuting & motorway driving. If you don't care about new tech or looking fancy then a cheap, decent car is 100% available to you. Sure my car probably only worth £1k tops but who cares if it still works? You get into another wormhole of buying used: Buy an older car with service/repair history & it's likely been looked after better than a 3yr old leased car.

Bit in bold - I'm not sure that's quite right.

The bigger issue on any car is around mileage - as cars accumulate more mileage, more things get worn out. Even a top-notch service history doesn't stop that.

Most 3 year old ex-lease / PCP cars are actually in good condition, not least because the penalties for the return of the car in anything less than perfect condition soon mount up. The terms on my last company car when I returned (bearing in mind this was a 4 year old car) a limit to the number of stone chips on the nose, no scuff or scratch on the paintwork more than something like 15mm and nothing down to the bare metal, no scuffs on the alloy wheels - I had to point out to them that on my car (which had wheel trims) that the paint was flaking off the trims not due to misuse but clearly because the paint hadn't been properly prepared (you can't kerb a 16" wheel near the middle).

The bigger issue actually are the mid-age privately sold cars with an ambiguous service history, particularly if said car has a cambelt. An acquaintance of mine bought a car from an auction, looked in good condition, sensible mileage, good price - broke down a couple of weeks later with a snapped cambelt, cue a big bill to repair the engine. A far bigger bill than if he'd spent a little more with a local dealer.

On your £ 1k car, the biggest risk is it is only 1 bump or 1 MOT failure away from being uneconomic to repair. If you can afford to write off £ 1k, that's fine, the question then though is whether you buy another £ 1k car and chance your arm (i.e. bangernomics) or end up spending alot more to buy something which may last 10 + years again.

 

[AlterEgo]

I think it's more likely that the OP, although they have received a quite the number of polite explanations, just doesn't have any experience of living in the UK outside of the very small slice of England approximately between Bournemouth and London, which is much wealthier and often much more expensive than most of the rest of the country.

The OP absolutely refuses to acknowledge the rest of the country is either not like Hong Kong or Bournemouth and London. It permeates practically every post and no amount of patient explanation ever works.

 

[Starmill]

Lots of people quite enjoy buying something at less than £1,000 and doing their own maintenance on it too. Until the pandemic there was an almost unlimited choice of 'bangers' to go for. Some people got great deals paying just a bit more than scrap value for a car and making it last. Obviously it's a bit of a niche pursuit and it takes a lot of confidence in your own ability to be comfortable with the safety of such a vehicle, but even if you applied your day job rate to the cost of your time you could make it pay. In other words, a flourishing second hand market is what has kept this country's supply of cars high enough to keep their costs down such that nearly all households have one. Of course, the effects of the pandemic on the used car market have somewhat changed matters.

 

[skyhigh]

The rent has already eaten most of the annual income for most workers in the UK. For a family requiring a 2-bedroom flat, which usually costs £1200 pcm

Usually £1200 per month for a 2 bed flat? Seriously? The last house I rented was around £800 a month for a 3 bed terraced house in a reasonable location. My current mortgage is £450 per month again for a modest 3 bed terrace house in a decent location.

Sorry, but I don't see how a car is affordable for those earning below £50000 p.a.

I've never earned more than around £30,000 and yet I have a car, own a house and am not bankrupt.

I tried to get some quotes for me to decide if I would buy a car and very few were in the £600 range, most commonly £700 or more.

So because you, with your specific risk factors, get a quote of £700 you expect that is the average price? I pay £350 per year for an annual 15k miles and two adults.

And, don't forget, the biggest car expense apart from depreciation is the PARKING!!! A search at Stashbee reveals that the market price of a monthly parking is around £200 - £300 pcm, which is approximately £3000 p.a.

That is insane. I spend roughly £50 a year on parking.

You clearly have next to no idea what you're talking about.

 

[DelayRepay]

Mod Note: Posts #1 - #39 originally in this thread.


Are most of the people in the UK so rich that they can afford private cars?

Before we can put a car on the road, we already need to pay insurance which, for the lowest-risk groups, already costs £700+ upwards per year. And we need to spare a few hundred pounds for general maintenance as well, that's already £1000 p.a. before any depreciation.

Then we come the car price. Of course you can buy very old cars having more than 10 years and 100k miles which have already been fully depreciated at just £1000, but how reliable are they? Anything less than that we have to include depreciation as well, and also the cost of capital. If we buy a 5-year car, the price will be commonly around £4000 - £5000, which if we run it until it becomes 10 years old, the depreciation itself will cost another £1000 p.a.

And finally we need fuel to run the car. Given how expensive petrol price is, at £1.7 per L, even for a very economic car at 8 L / 100 miles, that's £13.6 to run 100 miles. If we commute 30 miles per day for 232 days per year (52 weeks of 5 days work - 28 days of holidays), that's £946.56, nearly another £1000 p.a. even with minimal holiday travel.

The above already totals £3000 p.a., which can already get you nearly 4 annual train tickets between Hendon and Stratford, about 14 miles by car.

And, don't forget, the biggest car expense apart from depreciation is the PARKING!!! A search at Stashbee reveals that the market price of a monthly parking is around £200 - £300 pcm, which is approximately £3000 p.a. So the total cost of car ownership is as high as £6000 p.a. - approximately £9000 of pre-tax salary at 20% income tax rate + 13.5% National Insurance rate. This is absolutely a luxury to most people.

The rent has already eaten most of the annual income for most workers in the UK. For a family requiring a 2-bedroom flat, which usually costs £1200 pcm (which isn't even in the City centre and requiring travel to work), then another £150 for food each adult, and £100 for household bills, a salary of £30000 p.a. - a typical figure of full-time employment - can just get a family of 2 adults and a child the most basic needs of living.

Sorry, but I don't see how a car is affordable for those earning below £50000 p.a. Even if earning that much, the money is better put into buying a home instead, which nowadays costs £400k upwards. Of course it's possible buy a home at just £150k in somewhere in rural Kent, very far away from any decent economic activity, but then you will need to commute by high-speed train as using a car to the City will take you more than 2 hours in peak hours.

Others have already disputed your figures, but in my case I took a bank loan to buy the car. That's paid off now so no ongoing costs. Insurance and breakdown cover are about £300 a year and I probably spend about £200 - £300 on maintenance.

I worked out that when I go to work, the fuel/parking cost about £4.50 a day combined. The bus costs £4.80 for a return journey. So the question shouldn't be how can people afford cars, it should probably be how do people afford to use the bus?!

 

[A0wen]

What are your house price, mortgage payment and annual car insurance cost?

I'm looking for a home in my desired area (somewhere within zone 3 on the Thameslink line) but even a starter home costs £200k to buy, and it's just a studio flat.

My mortgage is probably unrepresentative given I've been paying it for 10 years and owned a house for 20, so my last re-mortgage was for a small amount in the scheme of things.

Car insurance is sub £ 400 on a family sized car - but again, I'm late 40s with NCB and clean driving record.

Yes - you will be paying £ 200k for a studio flat in Zone 3 Thameslink - if you want more for your money you'd be better off looking just outside London at Luton, Hatfield or Stevenage where £ 200k will easily get you a 1 or 2 bed flat. You'll be looking at ~20-30 mins to St Pancras.

 

[miklcct]

Usually £1200 per month for a 2 bed flat? Seriously? The last house I rented was around £800 a month for a 3 bed terraced house in a reasonable location. My current mortgage is £450 per month again for a modest 3 bed terrace house in a decent location.

£800 a month for a 3 bed terrace house?! That's insanely cheap! Is it in somewhere which will take hours of high-speed train to reach London? Even in Bournemouth this price can only get me at most 1 bed, and in London, probably at most a studio. I'm already looking at a very large part of the South East, approximately the triangle formed by London, Poole and Dover, and Bournemouth is already in the lower end of the prices.

You say it's in a decent location? Where's that?

I've never earned more than around £30,000 and yet I have a car, own a house and am not bankrupt.

So because you, with your specific risk factors, get a quote of £700 you expect that is the average price? I pay £350 per year for an annual 15k miles and two adults.

I don't think a 28-year old male wanting his first car is out of ordinary. And I'm already looking for cars in the low-risk group.

Given how high the rent is, my impression is that £30000 is not much beyond poverty. If the rent is £1000 pcm this already takes away half of your post-tax income.

That is insane. I spend roughly £50 a year on parking.

This is unimaginable as well. Even if I have free parking at home (a rarity if I live in a flat / a terraced house) £50 may only last me for 2-3 months, as most of the places I go in urban areas charge for parking.

 

[A0wen]

Usually £1200 per month for a 2 bed flat? Seriously? The last house I rented was around £800 a month for a 3 bed terraced house in a reasonable location. My current mortgage is £450 per month again for a modest 3 bed terrace house in a decent location.

For where the OP is looking (Zone 3 Thameslink, so Hendon or Cricklewood) that's pretty much the going rate. https://www.rightmove.co.uk/propert...ype=&letType=&letFurnishType=&houseFlatShare=

However if the OP could bear to stray outside the M25 you can easily take 1/3 off that https://www.rightmove.co.uk/propert...re,retirement,student&furnishTypes=&keywords=