jawillwill Posted 25 November, 2014 Share Posted 25 November, 2014 What percentage of your annual income should go towards the cost of a new car? I earn a fairly decent wage (well, average) but I can't help but think the vast majority of cars I see on the road are better than my KA. Do that many people use finance deals to fund cars they can't really afford? Link to comment Share on other sites More sharing options...
norwaysaint Posted 25 November, 2014 Share Posted 25 November, 2014 I earn comfortably above the average wage and my wife earns twice what I earn, but both of us currently drive fairly old toyotas, a Yaris and and a Corolla estate. There are few purchases that will depreciate in value as quickly as a car, so unless you need a car that looks good for your work, in which case you probably get a company car, I don't see the point. Pretty much everyone else who lives in my road drives a BMW or an Audi, but ours are as big as we need and rate highly for safety, economy and reliability. We own some forest and a couple of holiday homes off the beaten track, so maybe one day we'll get a four wheel drive, but at the moment I'd prefer our money went on paying off the mortgage, which is a far smarter investment. We bought both our cars without borrowing, it's always best to avoid debt, especially for something like a car which loses value so fast. Everyone has different priorities though. Link to comment Share on other sites More sharing options...
Unbelievable Jeff Posted 25 November, 2014 Share Posted 25 November, 2014 What percentage of your annual income should go towards the cost of a new car? I earn a fairly decent wage (well, average) but I can't help but think the vast majority of cars I see on the road are better than my KA. Do that many people use finance deals to fund cars they can't really afford? It depends, some people see having a new car as a status symbol, and with all the cheap lease deals around you can get some cracking deals. Link to comment Share on other sites More sharing options...
Bearsy Posted 25 November, 2014 Share Posted 25 November, 2014 Link to comment Share on other sites More sharing options...
buctootim Posted 25 November, 2014 Share Posted 25 November, 2014 Theres a separate thread about this Link to comment Share on other sites More sharing options...
buctootim Posted 25 November, 2014 Share Posted 25 November, 2014 What percentage of your annual income should go towards the cost of a new car? I earn a fairly decent wage (well, average) but I can't help but think the vast majority of cars I see on the road are better than my KA. Do that many people use finance deals to fund cars they can't really afford? Often its cheaper to lease new than own old. If you really do the sums for your Ka - including repairs, depreciation, road tax and the fact a new car gets better mileage I bet this lease for a comparable new car is cheaper. http://www.tilsungroup.com/vauxhall-corsa-1.3+cdti+ecoflex+limited+edition+5dr-car-5435#.VHT4T4usU9Y Link to comment Share on other sites More sharing options...
Bucks Saint Posted 25 November, 2014 Share Posted 25 November, 2014 Zero. I have a company car and very nice it is too. But pay no tax on it as I am self employed. Could never afford it otherwise. Sadly this beneficial arrangement is coming to an end as I am being cut, due to cost reductions. Good while it lasted Link to comment Share on other sites More sharing options...
colehillsaint Posted 26 November, 2014 Share Posted 26 November, 2014 Zero. I have a company car and very nice it is too. But pay no tax on it as I am self employed. Could never afford it otherwise. Sadly this beneficial arrangement is coming to an end as I am being cut, due to cost reductions. Good while it lasted If you have a "company car" for business and personal use, that is to say a car that is paid for with a company's money, before deduction of any corporation or other taxation, you have to pay tax on it. I would suggest you should be paying tax on it if you aren't, or it's not really a company car! Link to comment Share on other sites More sharing options...
Bucks Saint Posted 26 November, 2014 Share Posted 26 November, 2014 If you have a "company car" for business and personal use, that is to say a car that is paid for with a company's money, before deduction of any corporation or other taxation, you have to pay tax on it. I would suggest you should be paying tax on it if you aren't, or it's not really a company car! Usually yes of course if you are an employee. But I am self employed, and so there is no taxable benefit arising through my employment. The company is not allowed to claim the whole cost of the car against profits, only the business use element but that does not effect me Link to comment Share on other sites More sharing options...
colehillsaint Posted 26 November, 2014 Share Posted 26 November, 2014 Usually yes of course if you are an employee. But I am self employed, and so there is no taxable benefit arising through my employment. The company is not allowed to claim the whole cost of the car against profits, only the business use element but that does not effect me Ummm. I bet your not brave enough to phone the revenue and ask about who if anyone has a benefit in kind from the personal use of your car? ? Link to comment Share on other sites More sharing options...
Bucks Saint Posted 26 November, 2014 Share Posted 26 November, 2014 (edited) Ummm. I bet your not brave enough to phone the revenue and ask about who if anyone has a benefit in kind from the personal use of your car? I am sorry you are struggling with this, granted it is unusual. I will try to make it clear. Per HMRC: "An employee may benefit from their employment by receiving a benefit that does not take the form of money. Such profits are often called benefits in kind". I am not an employee and I am not in employment. I have my status as a non employee confirmed in writing by HMRC and its been that way for several years. Like I said its ending for me soon (along with my income source) but not for the other 60 odd people with similar arrangements Edited 26 November, 2014 by Bucks Saint Link to comment Share on other sites More sharing options...
ecuk268 Posted 26 November, 2014 Share Posted 26 November, 2014 Don't buy a new car. Unless it's an expensive prestige model the value will drop considerably as soon as it leaves the dealer. Go for something 6 to 9 months old. Any initial problems will have been sorted and it''ll be a lot cheaper than a brand new one. Link to comment Share on other sites More sharing options...
Pancake Posted 26 November, 2014 Share Posted 26 November, 2014 The worth of my car is about 60% of a good months takehome. It's a car, it gets me from place to place safely. Dont see the need to spend more than that on it. Link to comment Share on other sites More sharing options...
badgerx16 Posted 26 November, 2014 Share Posted 26 November, 2014 I bought my car new, for about 1/3 of my annual income - still got it 10 years later, so probably a worthwhile investment. Link to comment Share on other sites More sharing options...
CHAPEL END CHARLIE Posted 26 November, 2014 Share Posted 26 November, 2014 I've had my fair share of big powerful cars in the past and I've had a few modest little runarounds at times too - like my current Honda. Thinking back on it I loved the big cars because they made me feel good to both drive them and be seen in them. They were proper men's cars if you know what I mean - and yes I know that is a shallow attitude. But the little cars I've owned offered 95% of the fun of driving for a mere fraction of the running costs a big Volvo V70R, Audi 100, or a old 3.0 Vauxhall Senator would give you. Small cars make sense. I don't really like my boring little Honda but to be frank it (and other brilliantly efficient little cars like it) are all the car most drivers could ever really need. Link to comment Share on other sites More sharing options...
Patrick Bateman Posted 26 November, 2014 Share Posted 26 November, 2014 (edited) eee Edited 26 November, 2014 by Patrick Bateman Link to comment Share on other sites More sharing options...
St Chalet Posted 27 November, 2014 Share Posted 27 November, 2014 Ummm. I bet your not brave enough to phone the revenue and ask about who if anyone has a benefit in kind from the personal use of your car? I am in exactly the same boat. All perfectly legal and above board. Link to comment Share on other sites More sharing options...
pap Posted 27 November, 2014 Share Posted 27 November, 2014 Not a fan of small cars. I've seen too many roadside write-offs to put my family in a small motor. 10 year old big cars is what I go for. Link to comment Share on other sites More sharing options...
Manuel Posted 27 November, 2014 Share Posted 27 November, 2014 It really depends what you're doing with it. I have always enjoyed older, cheap cars, and some of these can still be pretty good. Currently I have an old BMW 318 which cost me a grand, looks shiny enough and hasn't once let me down in two years. But then my mileage is pretty low, if I was commuting distances I would probably have to stump up for something more modern and economical. Personally I would buy what you can afford, it can be just as enjoyable having older motors and if something catastrophic happens engine-wise you can get rid and start again. Economically it nearly always makes sense. Don't be tempted by finance unless you NEED to have something ultra reliable. That's what I'd say. Link to comment Share on other sites More sharing options...
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