Should I Buy Dream Car or Save?

Posted by Obvious-Camera152@reddit | AskUK | View on Reddit | 46 comments

Hey guys. I’m 25 in a few months and a huge car enthusiast. I currently work as a Senior Account Executive with a salary of £33,000. I have a LISA with my partner to save for a house and we’d be looking to buy somewhere around 5 years from now. I’ve been driving since I was 18 but only hatchbacks as insurance in the UK meant I couldn’t afford anything else. I would consider myself to be quite a logical person hence why I’m having a consistent battle with my heart and head. Growing up I always wanted an E92 M3 but when the F82 M4 came onto the market, I knew I had to have it one day. I’m now in a position where I could do that if I wanted. I would have to finance it, putting around 10-20% down (the M4 costing me around £25k with a mileage around 40k miles on the clock). That would leave me with a monthly finance of around £400 over 5 years and insurance around £200. After all my expenses minus my current Corsa also on finance, I would have around £1,600. I would sell my current car to pay off the remaining finance and I might have some money left from that. If I kept my current car I would be paying £300 a month for the insurance and finance. I also know that it wouldn’t just be an extra £400 a month on the car finance and insurance for the M4 as the car would need the overall maintenance and servicing and drink more petrol (as well as use premium petrol), and that would add up. I know I’m still young but I do worry that once me and my partner get a house and start a family, I wouldn’t have that chance to own the car I dream of and am proud of, especially being the primary earner out of us. I’m not too sure what to do and would love some insight.

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46 Comments

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Andi-anna@reddit

I'm not a car person, for me it's just a functional thing I own so I would never choose to pay more than I had to for a car. I can understand spending a bit more money for safety/reliability/fuel economy (or even comfort if you have to drive a lot) but if your current car does what you need it to do then no I would absolutely not buy a new car that is going to cost loads more. Even if you don't put this extra money towards saving for a house, work out how much extra a new car will cost versus keeping your old one per annum. Aside from saving it, this is all money you could be spending on taking holidays, day trips, evenings out, hobbies or even just buying other things on your wish list. Otoh if none of that sounds as appealing as buying your dream car then maybe revisit the idea after a couple of promotions (and salary increases) time and see if it's more affordable then. At this stage in your life it just doesn't seem worth it.

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eionmac@reddit

Long term advice; always overspend on housing, always underspend on depreciating assets such as car, transport etc. Most multi millionaires around me drive very old beat up Land Rovers, usually12 or 15 years old... which they bought second hand!

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Beanruz@reddit

In approx 2 years you'll be posting "houses are too expensive and how am I supposed to save?!"

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Obvious-Camera152@reddit (OP)

I didn’t mention that I would still be saving on the side by continuing to utilise my LISA. Naturally, my salary would increase over the next 4-5 years. I’m not trying to justify my original post. Just wanted to provide a bit more context. With that said, based on other people’s more helpful replies and personal experiences I would wait till after I got a house.

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Ceejayncl@reddit

Honestly, no. Having a family etc doesn’t mean you can’t have an M4 later on. If I could go back, I’d tell myself to save more for a house, even if I was only putting £20 or so more away. You say that you’ll want a house in 5 years, but what happens if your partner gets pregnant? Lots of things can happen between now and 5 years down the line. Honestly the M4 will be there for you when you buy a house, probably an even better one as well. Do you know what else? It will look great parked on your drive, instead of being parked on someone else’s drive.

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Obvious-Camera152@reddit (OP)

That’s really great advice honestly. Deep down I knew the correct answer. I’ve always been someone who works hard as I know the future pays off. Minus my current car finance (inexpensive and aiming to pay off in full soon) I don’t have any debts. I did an apprenticeship so I don’t have any student loans to pay off too. In the next 3-5 years I would be on a great salary. I guess I was trying to justify myself into getting that dream car. Thank you for your advice once again mate!

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Ceejayncl@reddit

You’re welcome. What is also worth considering, if you are on £33k now, in a few years that wage will go up. The sooner you get on the property ladder the easier it will become. Have you ever wondered why boomers and the generation below them have nice houses and cars? It’s because they bought their houses years ago when it was selling for about £60k, but is worth well over £250k now. Their wage went up, but all the time they were only mortgaged for £60k (less as they paid it off). Their wages increased, the value of their home increased, but their mortgage never did. Now they have that good wage which in theory would be enough for the same house they have at today’s prices (providing they could save the deposit) but they don’t pay today’s prices. As such they have all that spare money, and they have the nice cars, the nice holidays etc. The sooner you get on the property ladder, the more of your wage you’ll free up in future.

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knight-under-stars@reddit

£400 a month for the car and another £200 on top for insurance? *Six hundred pounds a month* for a freaking car? If you were half as logical as you claim you would have known the answer before finishing making your post.

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Barty_Crease@reddit

Don't buy the car, I'm going to be brutally honest here becuase it sounds like you need it: You don't have enough saved up for a house in the current market and your household income doesn't leave room for large errors. You've written a few paragraphs trying to justify getting into hefty debt to buy pride instead of stability for a future family. This isn't even about the car anymore, this is a choice about what kind of man you want to be

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Obvious-Camera152@reddit (OP)

I could finance a F32 430i/435i which could be seen as 70-80% of the F82 car but more economical as well as cheaper to finance. I think what would really would add up would be the petrol, servicing and maintenance as well any unquantifiable factors/problems a car might face as the mileage and age increases. With that said I still would be chucking money at a depreciation asset. There’s nothing wrong with my current car. I know if I can look after it then it will look after me within the next 4-5 years to come. The money saved would be at least 20k plus the 25% government bonus from the LISA for a house - naturally I would be seen an increase in salary as I get promoted every 12-18 months so what I save could be more I guess.

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Teh_yak@reddit

Forget the finance. As soon as you need tyres or brakes, you're gonna be fucked with the cost. I've driven BMWs for decades now. Current is a g21 330i and I paid for it in cash. Being blunt, as well, I could afford more. I just had the rear discs and pads swapped and, although it may be cheaper in the UK, I reckon you're not gonna get much change from £700 just for that. Your promotion rate will probably slow, and is not to be relied on.

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Willing_Ad_375@reddit

While you’re young, buy a house, be independent, f the car. I had a Fiat Punto at 25. Now got something very decent I own outright. Fast cars / badge snobbery wears off quickly and it only matters to you. The only person who values the car is you, not your friends, partner etc etc. at a young age we all think that other people care about what we have - they don’t. Go on holiday, explore, buy the house, have adventures. Forget the car

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Behold_SV@reddit

With salary of 33k you can dream about fiesta. Second hand. I have way more but drive company car and still investing in myself and in house. Be wise with your finances. When I was 20-21 I’ve got some thirsty American car and was living pay check to pay check. All experience was sad.

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Christopher_UK@reddit

A car loses value over time, something to consider. I would invest your savings. But speak to a financial adviser first.

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kb_hors@reddit

Save it. You're going to work and the shops in the bloody thing, and all the while the money you spent on it will never come back.

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Ok_Help516@reddit

I would advice to keep saving for the house as in a long run the house could potentially increase in its value while a car in a long run will only cost double is not more of its original price, also you are 25 so you have a lot of time to save up and get that dream car but for now I would say it would be better to save for the house to secure yours and your partners future. Also have you spoke to your partner about this and if so what is your partners opinion?

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Obvious-Camera152@reddit (OP)

Hey mate, thanks for the reply. My partner continues to be my rock as cliche as that might sound. She’s been extremely supportive and understanding. She understands that if I was to go down the option of getting a car like that it would mean waiting a tad longer to get the house. My 17 plate Corsa is only on 54k miles (I’ve put about 17k on it), it well spec’d with a full service history that I plan to keep on top of. I only have a bit left on the finance which is inexpensive. The car is quite economical so logically it makes sense to keep it as long as possible while we save for a house or in general. I also work remotely so I wouldn’t have to worry about putting the miles on it. Ignoring everything for now, the different between the M4’s finance and insurance against my Corsa is about £450 which over 4 years will add up. That figure only increases once I include tax, petrol, maintenance, service and tires. Deep down I guess I knew the answer but I wanted to see the general consensus of what people that took that leap had to say - most of which regret not saving. Thanks again for your advice mate!

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boldstrategy@reddit

Best advice I was given, buy what appreciates, loan what depreciates. You don't need the car.

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BritishBlitz87@reddit

Buy the car mate, driving in the UK is getting worse by the year... Who knows if you'll even be able to afford petrol by the time you can buy an M4. Let alone ULEZ zone, congestion charges, speed and noise cameras. Houses aren't going anywhere. Petrol cars are. You don't want to be riding around in your autonomous transport pod in a carbon-free zone wishing you could have at least put your foot down just once to hear that in-line 6 roar...

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TopSale7706@reddit

If you make enough to cover housing, life in general, saving, kids, travel, family commitments etc etc etc and you still have £500 a week leftover..........then buy an M3. If you make £500ish per week don't buy an M3. You'd be a skintosaurus-rex. Buy a Japanese shit box with a zero advisory MOT and a new set of tyres on it.

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Obvious-Camera152@reddit (OP)

I’ve always said to myself I wanted a 350z. I’ve seen I could pick up a decent one for around £10k. Any car would be an upgrade for what I’ve currently got lol. Thanks for the advice mate! :)

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TopSale7706@reddit

I buy cheap Saabs with the biggest turbos and a new MOT. Then drive them like they are stolen😂 My latest one was £1495 and it's a genuinely fast car. I need an estate so these suit me. I understand the want for something nice, I would love a 996 Carrera 2, but genuinely, unless I had £500 a week spare I wouldn't do it from a financial point of view. Maybe you can do the sums and lease something for a year? Have enough time to really get to enjoy a special car and who cares about the cost as it's only a year. My mate rented a G63 for a week recently and went for a holiday in the lake district with it. It was about £800 I think. I like the 350z, that's a nice car, they look great in black with the orange/gold calipers. They seem to have went up a fair bit in recent times, I can remember seeing some really cheap ones a few years ago, it's a classic now though, it really is. One thing I will say though, and it goes against my initial statement of "buy a cheap car" is to be careful not to miss out on your heroes. If I think about all the £3k cars from a decade ago that I was going to buy one day....now they are all £10k cars🤦 Maybe a 350z isn't the wisest thing to buy right now but you might regret not getting one if they go mad in money. Imagine you stretch yourself a bit now and get a mint one then in 5 years it's worth £20k and you have had some payrises, it will have been great then! E39 M5, Impreza P1, Integra Type R, E30 M3, Pagoda Sl.........at some point in my adult life I could have had any of these for reasonable money, I remember really nice E39 M5s for £8000😂😂😂 I remember my mate decided not to buy a P1 for £14000 and instead bought a 2 year old BMW 320d😂 I remember my mates big brother buying a slightly ropey Integra Type R for £1500!!! So be careful with the expenses related to cars but be mindful of what might all of a sudden become crazy expensive so you don't miss out. Guys older than me tell the same story about Capris and MK1 Escorts....."I scrapped a Mexico for £8 in 1987" Makes me wonder, what's the car to buy now for everyman money that will be worth a fortune in ten years?

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Subrosa1952@reddit

A car, particularly a fancy new one, is probably the dumbest decision one could ever make. Particularly if they are just starting out in life.

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flaninacupboard2@reddit

If you need to finance a second-hand car across five years then you can’t afford it, plain and simple.

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95jo@reddit

So I recently bought an F82 M4 Comp and in the 6 months/6k miles I’ve owned it it has cost just shy of £5k. That’s not including depreciation and my insurance is less than half the price of yours. Admittedly £1.5k of that was on modifications. £550 on two rear tyres, £1.7k on fuel (22.8mpg average), the rest is tax/insurance and some minor repairs (replacement tyre valve, post purchase inspection etc). It’s due a major service, brake fluid and front pads later this year. Even at a reputable independent that will be roughly £750-£850, near double if you want to maintain a full BMW service history. Oh, I also had to get the valvetronic motor replaced, fortunately it was within the warranty period otherwise that would’ve been £700. Turbos are known to go on these, as is the crankhub of course. Could you afford to fix/replace these types of things? It could ruin you financially. Personally, I wouldn’t feel comfortable running it on your salary, especially if you have desires to buy a house in the near future. Why not go for something in between like an M235i/M240i? Not to mention the step up from a Corsa (even if it is a VXR) to an M4 is quite substantial even if you disregard the running costs, they can be quite dangerous in inexperienced hands (no RWD experience, very torquey low down etc).

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litetaker@reddit

Absolutely no. It's a used car. It's an old car. It will have lots of hidden costs due to maintenance, MOT, insurance etc. And given your salary it's simply not affordable. It's a terrible idea. Don't do it as you will only regret it. Only make such a decision when it's financially reasonable.

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GrazzieRegazzi5@reddit

> It's an old car. It will have lots of hidden costs due to maintenance, MOT, insurance etc. Just to be clear, age =/= reliability and the car he wants is roughly 8 years old. It's far more about the servicing and ownership quality rather than age. You are right about affordability though. Doesn't seem like OP has considered the bills when things need replacing. A new set of pads and discs on an m4 can cost 1k+ alone and that's normal wear and tear items.

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litetaker@reddit

Yes that's true. But as a used car it won't have all the free servicing dealership perks for the first few years either right? So all those things add up. Indeed I myself will hesitate to buy a car or even replace one. I'm fortunate enough to live in London and not need a car, but if I ever do I'll avoid used cars. In the past, many years ago and in a different country, I bought a used Nissan Altima as a student, with the income I was earning. I bought it out right without needing financing but sadly the fact that it was Japanese didn't mean it was well maintained and still required a few fairly expensive repairs even with relatively low mileage. 😅 But it was not too bad to maintain but it could've been worse for sure.

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GrazzieRegazzi5@reddit

> But as a used car it won't have all the free servicing dealership perks for the first few years either right Those are very rarely free. Seems like buying a bad used car has impacted your view here greatly. If you're buying a car, perform the necessary due diligence and research and the odds of being bitten are extremely low, but even when buying new those odds are not zero. Plus buying a lightly used car makes much more more sense financially than buying new, buying a brand new car is one of the worst decisions people make financially.

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litetaker@reddit

Yeah you are right there for sure, as cars depreciate very quickly from the moment they are sold. I dunno if I'll go new or used if I ever buy one. But aren't there benefits in buying new that are worth it even if you factor in that initial depreciation? Like with new I feel you can have more confidence and consumer protection perhaps, like a guarantee period etc.? As you can see, I'm not very knowledgeable haha

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GrazzieRegazzi5@reddit

New v Used regarding legal safety periods are the same. You can also still buy used cars well within their warranty periods and some brands will even let you extend their warranties when buying used cars. You might get more responsiveness/willingness to work with you if there's an issue from a main brand dealer but that's far from a guarantee, some of the worst dealers I've ever seen have been main brand ones. New cars are often much more to insure (they cost way more to replace so naturally this would be the case) Depending on the car, the price will be 40% of what it was new after 3 years.

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litetaker@reddit

Oh damn. This is worth keeping in mind. Do you have insight into used electric cars?

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GrazzieRegazzi5@reddit

I'm very high on EV's but you need to be careful with them when buying. You need to be very selective with brands/models you're considering due to battery packs and reliability etc If a battery pack needs changing on a used electric car, it will likely completely write off the car. Batteries will also degrade over time so the usable mileage will never be the manufacturers claimed WLTP milage. If you don't want to leave London then this is the least of your concerns though. To me, electric cars seem like the perfect example of when to lease a new car. The depreciation on used EV's are way more aggressive than on combustion powered vehicles.

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Creative_Crayon@reddit

The M4 is a lovely car, the old convertable model was my dream car for a long time. But if your car is not inline with you other life goals you look siily. Having a lovely car but not being able to have a house, or afford nursery for the kids, will be an life regret. There is no need to have everthing now, wait, be paitent and get the dream car when it fits with the rest of lifes goals.

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Obvious-Camera152@reddit (OP)

I really do appreciate your reply. Deep down logically I know you’re right - you could probably tell in my post. I understand that the M4 would be a depreciating asset that could/would milk my monthly wage. I just question that once I have the house and children, would I ever have the chance to own a car like that? - I know the answer is either probably to a yes. I’m on a good path, no debts (excluding my current car finance) and a great career ahead of me. I’m quite an over-thinker as I always plan for the future. Thanks again for your reply mate!

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Alarmed_Crazy_6620@reddit

Seems expensive given your income, sorry

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Willing_Ad_375@reddit

Very

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sakmentoloki@reddit

You cannot afford a car of the price on that salary. It's idiotic to put yourself in such debt for something that loses money the second you drive it off the lot.

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RainbowPenguin1000@reddit

I would suggest not spending over 75% of your annual salary (before tax too) on something that does the same as something you already has but just looks and feels a bit nicer. Following head over heart is part of being a grown up. Maybe one day you’ll get it but now doesn’t make sense.

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Obvious-Camera152@reddit (OP)

You’re right. I was very curious to see what people would say and possibly share any experiences they’ve seen/heard. The car and finance alone would be about 30% of my monthly salary. Of course the biggest money factors would be servicing and maintenance on a M Car like the M4. Especially considering it’s a depreciating asset that would have more possible problems as the car and mileage increase. I guess I just worry that once I’m 30 with a house and children, I wouldn’t have the chance to get the fast performance car my inner child once dreamed of as I would have other priorities in life.

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_DeanRiding@reddit

All the people who know who got expensive cars on finance later came to regret it(or they live/d with parents so it didn't matter so much). Meanwhile, I spent £8k on a 2016 Vauxhall GTC, have had it for 5 years, and it still runs like the day I bought it. It's got decent performance, particularly for the price point, and aesthetically, I think it looks good. £200 a month over about 3 years and £60 on insurance. Very manageable. Mind you, I'm on a slightly lower salary. It all comes down to priorities at the end of the day though. I wanted a minimal commitment after uni (both in length and cost), and I wasn't in a circle of people that was massively into cars. A few years ago when you could get cheap credit and rent was about half the cost, I'd have probably said go for it and enjoy yourself in all honesty. If the last couple of years has taught me anything though, it's that being sensible with finances really does pay off in the future. You don't want to be riddled with debt when trying to buy a house. They will look at whether you can afford a mortgage based on your current outgoings. So you need to ask yourself, can you afford your energy bill to suddenly double overnight like we've had over the last couple years? Can you afford 12% inflation again?

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BoringIndependence53@reddit

Don't buy. The novelty will wear off quicker than the debts paid off. Leasing a depreciating asset isn't always a bad idea

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ByronLebanon@reddit

At the end of the day a car is a car. Sure you can love driving cars, but they lose their value real fast. Houses tend not to, a house your money stays with you.

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GrazzieRegazzi5@reddit

Nowhere near enough info to make any guess. Use the charts on https://www.reddit.com/r/UKPersonalFinance/ You take home roughly 2.2k a month and 600 of that is going on your car every month minimum. If you still live with your parents and have dirt cheap living costs then it's feasible to do it.

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Btd030914@reddit

What’s gonna improve your life the most and make you happier in the long term?

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