[Lewis Mc]

I hear what people are saying, I love the car and I have only just got it about a month and a half ago, the finance settlement is 24k and it's probably worth 30 - 32 ish I'd say, so I can stomach a 1k or 2 k loss in the short run, I've looked into a 116 ,and 3k down gets me to 100pcm over 2 years on a 11 plate I think it was, (shame I can't do 1 year pcp) ,

I'm happy at home and I don't have a reason to move out so to speak, apparently am not allowed to move out till am 25 says mum haha, but as most have said I would like to get on the ladder sooner than later due to interest rates and I've seen a lovely 2 bed semi not far from work and still local which is 110k, payments are 500 on a 10k deposit for 25 years,

I take home 1850 a month and 302 goes on the car, 200 petrol, 100 on gym, lottery, mobile, so am still left with about 1200 a month to do what I want with, I could technically afford both but I believe I'd be scraping it by my teeth after bills and food etc

I fact working out the finance last night in work if I got a house with the 116,id have a total of 1092 a month spenditur on bills etc and 700-800 for whatever else I want to do, not exactly bad I suppose

[JD6]

Lewis - since you have posted your salary, I hope you don't mind me commenting on it.

It does seem quite unusual to be driving a car which costs close to double your annual salary, even if it is on finance. What you do now perhaps should depend on your career path. How much of an increase in salary do you expect in the next 2 years? If it will double, then I would probably be tempted to hang on to your current car, but not to buy one costing double next time around!

It sounds like housing costs are pretty low in your area, but I would still be tempted to buy a property and set about paying off the mortgage, before doing anything else extravagant.

[Lewis Mc]

Originally Posted by JD6

Lewis - since you have posted your salary, I hope you don't mind me commenting on it.

It does seem quite unusual to be driving a car which costs close to double your annual salary, even if it is on finance. What you do now perhaps should depend on your career path. How much of an increase in salary do you expect in the next 2 years? If it will double, then I would probably be tempted to hang on to your current car, but not to buy one costing double next time around!

It sounds like housing costs are pretty low in your area, but I would still be tempted to buy a property and set about paying off the mortgage, before doing anything else extravagant.

I don't mind mate, its only a salary I don't get why people get so secretive about it when talking about finances. Although the car isnt double my salary , as im on about 22k a year after tax and the cars 33k I don't really see my salary increasing that much any time soon unless a management position opens up and i got it, but then there's a lot more experienced people in the factory than me to be a manager !

The area am looking in is pretty nice but its only a small 2 bed semi so its nothing big, a decent detached 3 or 4 bed goes up to 200+ but i wouldn't need a house that big yet so helps keep house costs down

[JD6]

33k sounds very reasonable for a 435i, although still a lot compared with your income. Perhaps I am just old-fashioned, but I have never considered buying a car that cost more than a small proportion of my income. It just seems like too much to tie up on a depreciating asset.

When I got my first job, I spent £4k on a second hand Golf GTI, and didn't buy my first new car, a 540i, until I was earning about 10 times my starting salary. Clearly PCP and other financing makes car ownership more accessible, but you are still giving up a lot of income to depreciation.

Perhaps the key difference is that I was in London, so buying a house meant a lot of saving was required. Anyway good luck with your decision. I actually enjoyed driving a 116i on the occasions I have had one as a loan car.

[SEW247]

Lewis - one thing to take a note of is that a lot of lenders will nowadays go through your income and expenditure quite closely and ask quite a few questions.

We remortgaged recently and they were quite nosey. Your current car repayments are quite a significant portion of your take home pay (in their eyes!) and will likely raise some questions from them. They got their knickers in a twist about a £113 per month interest free loan the Mrs has even though we take home over £9k per month!

The best thing to do is have a good 3 month period spending as little as possible so you can clearly demonstrate that you are responsible and always end the month in the black and put away some money in savings.

The only other thing to think is that one day the base rate will rise and mortgage rates will too. We just got a 10 year fixed rate at 2.94% and you can get decent rates on five year fixes with a small deposit. But in five / ten years time, who knows what rates will be - I remember seeing somewhere the long term BOE rate is something like 5% which will probably mean 6-8% mortgage rates.

Make sure you have a good think through and good luck! Nothing beats having your own home!

[Lewis Mc]

Originally Posted by SEW247

Lewis - one thing to take a note of is that a lot of lenders will nowadays go through your income and expenditure quite closely and ask quite a few questions.

We remortgaged recently and they were quite nosey. Your current car repayments are quite a significant portion of your take home pay (in their eyes!) and will likely raise some questions from them. They got their knickers in a twist about a £113 per month interest free loan the Mrs has even though we take home over £9k per month!

The best thing to do is have a good 3 month period spending as little as possible so you can clearly demonstrate that you are responsible and always end the month in the black and put away some money in savings.

The only other thing to think is that one day the base rate will rise and mortgage rates will too. We just got a 10 year fixed rate at 2.94% and you can get decent rates on five year fixes with a small deposit. But in five / ten years time, who knows what rates will be - I remember seeing somewhere the long term BOE rate is something like 5% which will probably mean 6-8% mortgage rates.

Make sure you have a good think through and good luck! Nothing beats having your own home!

Give me a job where you work I can only dream of that income a month, I hit lucky with my job if I lose it I don't have a chance in hell to earn what I do, any time soon with just gcse's

Hopefully my history should be fine for most mortgage lenders, I did get a mortgage in principle last year but someone beat me to the house I was looking at hence I ended up getting a car, then swapped that car for my current car,

I always have a min of 1k in the bank, and I've never had debt (except this pcp so to speak) no credit cards, admittedly I did spend 5k in savings for 2 weeks staying in universal Orlando in August, can't wait! Probably not the best financial decision but I want to get that trip out the way before I get a house or family.

Hopefully tomorrow I'll pop down to to bmw and see what figures are like for part ex on a 1 series and hopefully lose little as possible, due to the new lci coming out I should get a good deal on existing pre lci on show in the dealers.

[tjlees]

Ok lots of sensible advice here - after all we are BMW drivers.

Personally I hate owning a house, especially when I was young and the rate was at a whopping 15% at one stage. You are always seemingly painting, diy-ing and repairing, replacing and then SWMBO decides we are moving and the cycle begins again. When I was living at home I could easily save with lots of other benefits, when I was renting I could still save and landlord/agency did all the repairs etc and swapping jobs in a different location was doddle.

So .. And to give another view point ... IMHO, I would personally live as long as can at your parents house - I wish I had in my parents moderately big house. It means you have significantly more money to save and spend - I would have bought that lancia delta integrate 16v in red that I was looking at .. Gone on track days ...gone on foreign hols ... Instead of the marina coupe I was stuck with so I could buy a house ...to update ... And not really go out for two years.

if you want an investment talk to an advisor - buy to let if you want to get on the housing market - at mo yields are around 5% plus whatever the house is going up by.

[RichardJ]

I traded down from a Golf GTI I loved to a bmw 120d in order to save money after moving house. Within 18 months I got rid for my now current 330d. In the end it would have been cheaper just to have kept the GTI and gone straight to the 330d. If you love your cars you'll miss the power!

[73henny]

Stay at home, but buy the house and rent it out. Best of both worlds - someone else paying your mortgage and your mum's cooking.
Also, your outgoings you mention above don't include anything to do with a girlfriend. Expensive things they are.

[rich100]

I do agree with previous posters re the the cost of the 435i relative to your salary. This however is mitigated by the fact that in your current situation you do have a fair slug of disposable income, as you've mentioned you're not blowing this on other things so for a while at least you could have the best of both worlds by being able to run and enjoy pretty amazing car and simultaneously put a fair bit away each month.

For what it's worth I wouldn't rush into switching into a 116. I'd give yourself a bit of time to think things through. My concern with making a quick decision to switch is that you may regret it coming from a top end 4 series, and then possibly hankering to change to something different again.

I do think there's a lot to be said for looking at an older used car but something fun to drive if you are set on changing. A golf GTI or something similar would likely tick the fun box but without necessarily breaking the bank.

In terms of the house there is some great advice on the forum and there is certainly a good argument to be made for buying a property now. Personally notwithstanding this I would also give this some time as well though as to whether it's right for you right now. There is a lot to be said for getting on the property ladder but equally You're only 21 and I'd be tempted to say enjoy yourself for a while.

The interest rate debate is an interesting one. If you do end up buying it's a great time to lock in a decent rate and I think fixing for a period would be a sensible thing to do when you first start out.

I read an interesting view point over the weekend in money week making the point that if the Bank of England fail to increase rates this year they might stay at emergency levels indefinitely. The argument for this was that the economy probably couldn't stomach much of a rise and doing so would likely choke off any growth. We're way off our inflation target at present and there is currently not much pressure to increase right now.

Company's and individuals alike have now unfortunately got used to this artificial environment and many see this as the norm which is obviously dangerous. A rate rise, even a small one would probably tip several over the edge.

Comparisons were also drawn with Japan which cut rates to near Zero in 1995 in an attempt to combat deflation and it still hasn't got around to putting them back up again.

As unlikely as this may sound in the UK it's not beyond the realms of possibility then again but you never know what's around the corner(the economists definitely don't ) and the opposite could happen.

With rates this low I would definately recommend fixing and hedging against any possible rise.

Good luck mate, keep us updated

[nicknaz]

Originally Posted by 73henny

Stay at home, but buy the house and rent it out. Best of both worlds

Great advice.

OP, I had a $1200 Honda for several years when starting out so a 116 would have been an amazing upgrade

[Andy30D]

Originally Posted by Lewis Mc

Working on nights you get a lot of time to think.... So I've been thinking that I may have to do the sensible idea of selling my glorious 435i and downgrade to a cheaper more economical 116....all be it for a good reason.... A house deposit

I put 9k deposit down plus I pay 302 a month for 2 years just to hand it back... I owned my last car outright so never had to look in the future car wise but now am thinking In 2 years am fucked unless I have more money for a deposit on a new car

So begs the decision should I just bite the bullet and sell to raise more money for a house deposit or just enjoy my car while am still 21 ah decisions

I needed to vent the frustration of fun / sensible, as the house is the obvious choice... But then comes bills... Insurance.... Which eventually will lead to alot more than my current 300 outgoings..., plus if I lose my job it's easier to sell my car than a house, which eventually puts me off a house completely

It's a vicious circle of doubt!

Why aren't I a millionaire it'd be so much easier haha

Some may have already said this, but i am looking at the first house buy this year. Time to buy to be honest, prices always going up (well tend to) and waiting will cost you more. Other side of the coin, you have to be ready, its a huge outlay, and you are right, bills, insurances, milkman etc etc.

end of the day, we aren't here long, few decades and thats it. Money is made up, yes it makes the world go round, and you cant be ridiculous about it, but it is a means to live. Live the way you want to, spend it on what makes you smile.

End of the day, you cant take money with you!


Also selling up, you've kissed goodbye to your deposit. £9k is alot of money. Keep your car, plan the next couple of years, and when your car has some kind of equity, then maybe sell and go for it


Thats what i would do anyway!


Andy

[Lewis Mc]

Some more good advice off people thanks

Going to pop into bmw tomorrow see what the costs are of changing and have a little look at some cars , roughly it's 15 or 16k for a 1 series with the zf auto which I adore! With the lci coming out, some pre lci haggling should be possible, it won't be any time soon but within a month or two, but finance on the site indicate 3k deposit and less per month than now so that's a bonus I suppose,

Insurance is due in April... 28th I think, which is 2000 alone, so a 1 series before then would be good

Gutted as the house I've seen and liked had had an offer so no longer taking views.. But seen another am viewing tomorrow,

The flip side is.... Keep 435i for a year then change , have my fun in it before I get a house, or sell the 435i for an old Aston Martin and have fun for a bit one can dream....

Edit - little look at the house am going for maybe, seems bit tatty outside and 1 or 2 rooms but has potential
http://m.zoopla.co.uk/for-sale/details/30868433

[Andy30D]

With a car so new, and such a big deposit, keep the car mate. You'll kick yourself at losing so much money.

Keep it a year and enjoy it, or ill use it for you if you don't want it?! haha!

[tjlees]

Originally Posted by Lewis Mc

Edit - little look at the house am going for maybe, seems bit tatty outside and 1 or 2 rooms but has potential
http://m.zoopla.co.uk/for-sale/details/30868433

so ....


...or

[teaston]

Originally Posted by Lewis Mc

Give me a job where you work I can only dream of that income a month, I hit lucky with my job if I lose it I don't have a chance in hell to earn what I do, any time soon with just gcse's

Hopefully my history should be fine for most mortgage lenders, I did get a mortgage in principle last year but someone beat me to the house I was looking at hence I ended up getting a car, then swapped that car for my current car,

I always have a min of 1k in the bank, and I've never had debt (except this pcp so to speak) no credit cards, admittedly I did spend 5k in savings for 2 weeks staying in universal Orlando in August, can't wait! Probably not the best financial decision but I want to get that trip out the way before I get a house or family.

Hopefully tomorrow I'll pop down to to bmw and see what figures are like for part ex on a 1 series and hopefully lose little as possible, due to the new lci coming out I should get a good deal on existing pre lci on show in the dealers.

£5k for 2 weeks in Orlando! is that just for you?

Our honeymoon is £3k for 2 weeks in west coast, flights, hotels & convertible Mustang, & that's the total for both of us! I thought that was expensive!

[Lewis Mc]

Originally Posted by teaston

£5k for 2 weeks in Orlando! is that just for you?

Our honeymoon is £3k for 2 weeks in west coast, flights, hotels & convertible Mustang, & that's the total for both of us! I thought that was expensive!

5k is for staying in the park, 14 day tickets for all parks, flights, transfer and then 2k of that is spends, for me and the girlfriend her surprise present + mine to myself because... Why not

[Tengocity]

Originally Posted by teaston

5k for 2 weeks in Orlando! is that just for you?

Our honeymoon is 3k for 2 weeks in west coast, flights, hotels & convertible Mustang, & that's the total for both of us! I thought that was expensive!

What's your modifying budget for the a mustang going to be?!

[teaston]

Originally Posted by Lewis Mc

5k is for staying in the park, 14 day tickets for all parks, flights, transfer and then 2k of that is spends, for me and the girlfriend her surprise present + mine to myself because... Why not

Ah it's for 2 of you and includes spending money! That sounds about right then!

[Lewis Mc]

Originally Posted by Andy30D

With a car so new, and such a big deposit, keep the car mate. You'll kick yourself at losing so much money.

Keep it a year and enjoy it, or ill use it for you if you don't want it?! haha!

I don't mind losing up to 2.5k, that'd be my own fault and I'd take that on the chin as a learning curve , it's only 2 months savings to get it back so I could live with it in the long run,

24k to pay off finance, with my 9k deposit , I'd need to sell it for 33k to break even, autotrader values it at 32k private or 30k part ex, I could live with that, after some haggling of prices, I bought my 335i for 12.5k and part exd it 7 months later for 9k

[73henny]

Originally Posted by Lewis Mc

2k of that is spends, for me and the girlfriend

Ha!, knew it. You need to factor in the GF in your housing costs. She'll move in bit by bit, drawer by drawer.....

[Lewis Mc]

Originally Posted by teaston

Ah it's for 2 of you and includes spending money! That sounds about right then!

That's all paid for and done now so that's safe and sound for August /September ! Woop