I’m in my early 30s, have an average wage and I’m not exactly reckless with my money, yet since passing my driving test 15 years ago, when I was still at school, I’ve never felt an increase in purchase power when it comes to the car I drive, if anything it’s probably gone the other way as I got a lot of help from my grandparents with my first car.
Nevertheless I have sat and watched as my mates who are in similar financial positions to me are driving around in brand new Volkswagens, Jags and Audis. One of my close friends got a Mercedes Benz GLE Class business car leasing deal with his new job which I could stomach, fair play to him. He admitted he couldn’t afford a personal car lease Mercedes Benz GLE.
But my other friend is driving around in a brand new BMW X1, that she has got on a personal lease. Now when she mentioned this in the past I always just thought she was a materialistic fool who was throwing money away and putting herself in an awful position just so she could show off and post pictures on Instagram. Sound jealous? Well I was. Anyway I was chatting to her the other day about it and she maintains that she hasn’t had to change her lifestyle at all to accommodate the monthly payments, and to be fair to her it sounded like it was adding up. She said he was originally looking to get finance on a used Kia Sportage from 2015 worth £17,791, that would have ended up costing her 48 monthly payments of £424.26. That means she will have spent £20,364 on the car by the end of the contract, to own a car that will be worth about 12/13 grand by the end of the 4 year contract. That means she would probably have spent somewhere between £7000 and £8000 over the course of the 4 year period. Alternatively she could drive a brand new BMW X1 for £253 per month (after an initial payment of £2,644.11) via a BMW X1 contract hire deal meaning she would have to spend £14,535 for the luxury of driving a brand new £28,000 car for 4 years. So the decision comes to this, £7K (give or take) to drive a 3 year old Kia for 4 years or £14,535 to drive a brand spanking new BMW for 4 years.
Obviously it depends on what you need your car for, but in my mates case, she just wanted the best car she could have for the money she could afford, and he would rather drive a brand new BMW X1 than a 3 year old Kia Sportage despite the £6000 saving (over the course of 4 years). Furthermore the saving isn’t guaranteed, you are dependent on it holding on to its residual value and if something went wrong with the Sportage it could end up costing her more than its worth. I was sold on the idea and now we both have a personal contract hire BMW X1 in the garage!