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You can clearly afford to buy a £20 k car. Whether you should or not is basically a question only you can answer.

Imo £20k is not a lot to spend on a car. I bought a £20k 4 year old used car 2 years ago. I think it was a good purchase, I like it and I really like the fact I own it and don't have a £500 pm car payment like basically everyone I live near or work with seems to have!

You’re not being dumb. On your numbers this is pretty reasonable.

20000 is about 25 percent of your gross income and you’re paying cash while still keeping a full year emergency fund. You’re also investing consistently and still have surplus each month. That’s basically textbook responsible.

Yes it’s a depreciating asset, but that doesn’t automatically make it a bad decision. The question is utility and enjoyment. If you’re going to be commuting more, travelling, and actually using it, then it’s not wasted money, it’s buying convenience and time.

If it helps mentally, you could sanity check it by asking yourself two things. Would I still be fine if the car lost 5000 in value over the next few years and would I regret buying cheaper every time I got in it. If the answer is no to both, then you’re good.

As long as it’s a sensible model, not stretching running costs, and you’re not touching your investing plan, this is well within your means.

( check my profile )

What car is it? And what year/mileage?

You can expect that 20k car to depreciate pretty significantly over a couple years of ownership but if it's a car you like and will enjoy then it's worth spending the money.

Tbh your budget is fine and with the income you have you'll have enough funds for maintenance work and repairs should anything go wrong (which, let's face it, any car will need some work sooner or later).

I think if you work remotely and hardly drive, it makes sense to have a cheap car for occasional journeys.

If you drive often, or if you do longer journeys, then having a nicer car makes sense because you’re spending more time in it.

Where people go wrong isn't buying the car, it's buying it for the wrong reason. If this is about convenience, reliability, and quality of life as your routine changes, it's a rational choice. If it's about easing a feeling of "I should reward myself" or keeping up with an image, that's where regret creeps in.

You already understand depreciation, Money isn't just for optimizing spreadsheets - it's also for reducing friction in your life

You earn good money, you have good savings after you’ve bought the car. Do it.

Life is for living! You could buy a £500 car, which lots of people in this sub love to advise.

But what car? Don’t buy something shit and slow.

I'm on £90K and found that I could find some good cars around the £10-£12k range for what I was after. I previously had a £18K Focus ST and to me it always felt like having too much cash tied up.

My partner now drives that car as we used to share it before she got an office based job and now I'm in the market for a £4K MX5 which I'm finding very exciting and that's a much easier pill to swallow.

IDK when I was a kid it was common for a new car to cost about a whole year's pay and be an unreliable rusty ruin after less than 10 years.

You can clearly afford it.

You could spend less. You could waste a lot more. Most people in Britain outside of London consider a car to be worth the cost.

Buy Japanese-but-not-Nissan, 2-4 years old, keep up with the servicing, 10 years of transport sorted. Seems reasonable.

If it was me I would (and I bought a 20k car a few years back with less savings than you). Got to live a little and I plan on keeping it for 8 years minimum so it’s justified in my books.

If the car is not too old, is well maintained, and you plan to keep up with ongoing maintenance, then I think it's fine.

I was in a similar position six years ago and spent £18k on a nearly new second hand car. I've kept it since, paid it off, and now I just spend around £400 per year on maintenance. Other people are spending more than that monthly on leases.

How far away is the office? How frequently will you be going away?

£76k salary. I bought a £24k car. Go for it

It's a personal & emotional choice, rather than a financial one. If you look at this through a financial lense the answer is always a hard no.

I earn very similar to you, but my household income is about £110k, albeit we also have two kids. We put £3k into various savings per month and still have sufficient fun money.

So I got a decent car, £20.5k so extremely similar ballpark to you. It's not just an A to B machine for me though, I love my car.

I have a stressful job and the car is "my thing" that reminds me why I get up and go to work every day. The fruit of my labour if you will.

I think it's highly subjective. If you can afford it and are really into cars then sure, treat yourself.

I wouldn't personally spend this much on a car because it would piss me off when it got scratched in a car park, or treated as a mobile skip by the rest of the family 😂 

Can I ask what line of work ur in to earn 77k?

I am on £60k-ish and bought a 5 year old car for 15k 4 years ago. I love it and have no plans on changing, don't regret my decision one bit. I like having a fast, fun car with no monthly payments even though I WFH too.

20k is perfectly fine for a car considering you can buy it outright. other than that, depending on the miles you do, the money you have left at the end of the month might drop by quite a bit

Can you afford it and does it bring you joy?

A good rule is can you afford to buy 2 if you can then 1 is ok.

For everything Other than your home

You could afford this. So could I. I would never but you might want to. I'm happy for both of us and I hope you are too.

I was in an extremely similar position to you - earn very slightly more and was moving from a job with no driving to one where I drive about 12-15k miles a year. I chose to sell off my trusty 15 year old banger and buy a 20k car. I sometimes think about what else I could have done with that money but honestly, it hasn't put me in financial distress and driving it makes me happy.

Cars lose about 50% of their value in the first 3 years, and then the depreciation flattens off after that. And older cars, that were originally expensive, are usually expensive to service/maintain. You can afford it but it all comes down to your priorities. I usually go for a car that’s - year or two old and don’t stretch myself too much.

You can afford it... But it depends what your future plans are.

If you are looking at brand new id advise to get something atleast 3 years old as that is when the depreciation starts to slow a bit.

Always consider a car as lost money not an investment. If you can afford to lose £13k (as you can get an ok car for 7k) without impacting future plans, then go for it.

Easy short way to bypass if you can afford something or not. If you have to ask if you can afford it, then you cant.

This is the type of person to buy a Toyota Corolla 😂

20K on a nice car isn't a waste if you have the money to pay for it. You can get some lovely 1 or 2 year old cars that are far better for that money than a new one, as long as the mileage is reasonably low.

You spend a lot of time in your car and it's always best to get a good one you can afford. I've had cheap clunkers in the past as that was all I could afford, and now have a small Seat Arona with most of the bells and whistles because why not? Having a few quality of life things like bluetooth, automatic lights and windscreen wipers and rear parking assist aren't necessary, but they make driving better and more fun.

Pick a car you love. If something on the forecourt jumps out and shouts "buy me" and it's within your budget then go for it.

I bought it quite expensive car and its the worst thing I've ever done financially. Wont be spending that amount ever again.

I try to think of a car that's just a tool to get from a to b. A 5k car will do the same job as a 20k car

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You use a car almost every day and can get a chunk of value back when you sell it, if you keep it in good condition. I was in a similar situation last year. My old car was starting to become expensive to maintain and was a bit too small for my needs. I hunted around for 3 months and found the cheapest car that met all my requirements (£20k), got £3k back for my 8 year old Skoda fabia and plan to run this car for another 8 years. I now have a much comfier commute (1hr each way), space for newborn, better safety...it's a no brainer. Even without the benefits, you sound like you can easily afford it so I would say go for it!

You can afford it. Boils down to personal priorities/preferences - I’d prefer to max isa first and work backwards on the amount spent on a car. If you are going to be using the car extensively; and you want it - go for it. Good luck!

I did something similar. Bought a Hyundai Tucson cash. It’s a really good car, has loads of comfort features, can be nippy, is quite good in all weather and is fairly cheap to run.

It was a nice feeling to be able to buy cash and negotiate on the cash rate without having to worry about/calculate APR etc.

Price for you is irrelevant as you can afford it with or without finance. What's important is the all-in cost per year

This includes purchase, financing, tax, repairs, MOT, servicing. Fuel and insurance may be a factor to consider as well if it varies much across vehicles for you

I bought a 20k brand new car with 0% finance and lifetime warranty. I kept it 11 years and all in it cost maybe 3k year

If I'd bought a cheaper car it might've needed more work, had higher tax, lasted less years and cost the same amount per year for something shitter

Your budget is fine but my recommendation is not to. Get something cheap on pcp as you get all sorts of protection if things go wrong with the car vs paying outright. With the money you have saved up, there’s a good chance you can afford the balloon as sell privately to make a little money back at the end too or if it has depreciated further then the loss is on the finance company, not you

The general rule of thumb I use/hear is never to spend more than half your yearly income in a car. 20k is very well below that. You are in a great financial position and investing wisely so I would defiantly go for it.

However, no matter how much money I make, I always buy used. I find the sweet spot for cars I’ve bought is 2-3 years old with less than 10k miles. It’s new enough that it wouldn’t have any problems (if it’s a reliable car) but old enough that you can get basically 40% off retail price in most cases.

In all honesty, if you want the car and you’re looking to get something reliable (as opposed to a “prestige” money put), £20k makes sense. Get something with good safety rating, and enjoy it.

As a frugal, my rule of thumb is 5% of net worth (10% if car person). you could likely get a perfectly fine car for half that price, so the question is really how much you want to spend

As a bit of a petrol head and a penny pincher. I'd go for something around 10k at your fund level. You can still get something really nice and reliable at that price point.

You can clearly afford it.

I suggest hiring a few different cars first. See how they fit into your lifestyle. A couple of thousand spent over a few months may save you spending 20k on the wrong thing.

Airports always have the best rates. If you pick your times, it's not unusual to hire cars worth easily more than 20k for less the than 20 per day.

Research older cars that can be classed as classic and can potentially go up in value. There's no CG tax on profits on cars.

Don't buy new. Don't overpay.

If it's for work, pick the most appropriate car for the job. e.g. when the Toyota Prius came out, it was perfect for many client facing consultants. If you turn up with a very expensive car the clients think they may be paying too much. If you turn up in a cheap car they think you're no good. The Prius was being bought by Hollywood celebs, greens, tech people, people who wanted to save money. It was difficult to be pigeon holed.

If it's for fun and performance, consider a decent motorbike. Cars will just be a practical tool compared to a bike, unless you're spending over 6 figures on a car.

I've owned the cheapest cars and some status ones (Rolls Royce etc).

I now choose not to own one but I am in a car club, use Taxis a lot and rent what I want when I want. It makes for a simple life. Transport takes less of my time.

There are a lot of changes coming in the motoring industry. Buying and running a car is getting less and less worth it.

Slightly off topic - “take home” usually means after tax!

This sub isn't the place for asking about nice cars, they're more than likely to say get a banger.

It looks like you can comfortably afford a 20k car, and if you want it, just do it. Life's for living sometimes!

Enjoy the car!

You can afford it and want it then get it. Yiu can definitely buy a decent small car for much less, but life is for living

I’m in a very similar situation too, and I want to pull the trigger on buying the car so bad but haven’t ever spent this much amount of money on something, so feel so scared.

I take home 5600 per month, and 3700 of that goes into savings (cash/SNS ISA). Living super frugally currently, but I really miss having a car. I have about 35k in cash and 5k in the ISA right now.

The car that I’m looking at is around 27k (C43 coupe, W205, facelift). I don’t have a commute (fully remote) so this car is basically only for fun drives.

But I’m not sure if it makes any sense to get that honestly. It feels crazy to deplete most of my savings to get a car. I know that I could always sell it and recoup some of the money, but it just feels super risky for some reason.

Am I being overly cautious? Or is this fine?

I take home 77K (before tax) yearly … investments (1000 into S&S ISA/month)

Not to address your question, but pension is crazy more tax efficient than S&S ISA on your income.

If you're putting £12,000 a year into your S&S ISA then you're declining the opportunity to put £20,000 into your pension instead - that's a lot more money in your pocket. This is true until you've got your adjusted net income down to £50,271.

I think someone on your salary should be able to afford a £20,000 car - plenty of people being far more irresponsible with their money - but the ISA just leapt out at me.

Go for it mate. Theres a lot to be said for having a nice car that you enjoy and can rely on

Can I ask how old you are and what you do for work?

And do you have savings in your ISA beyond the cash ready at hand?

You can absolutely afford that on your pay. I make almost a third of your pay and got mine for £24k. No regrets

(Dad had recently died, left some money. £8k payment straight away, 5k trade in for my old car, and the last £11k on a 6yr 0% interest loan)

You can definitely afford this. Do you need it? No, there are plenty of good cars for less than 20k, but if you can afford it and that’s what you want to do then why not? Get the car you like. Enjoy life a little. No point saving if you can’t buy the things you want

Literally just depends if you care emotionally enough about having a nice car. You can easily afford it with absolutely 0 issues. Buying a car cash and saving the 500 odd a month is sweet.

I saw you’re looking at a C Class coupe. They look nice but they’re pretty impractical and expensive to repair if stuff goes wrong. Don’t know if you’re a fan but that price would get you a low ish mileage 2021 Octavia VRS with a very good spec on it. They’re faster, more reliable and more versatile. Might also be worth more in 5 years than a 10 year old Mercedes with almost 100k on it.

I would recommend borrowing the money and investing that in something. It’s a depreciating asset so use someone else’s money to buy it.

Buy a Mazda mX5, be a kid again!

Don’t do it, buy a cheaper reliable car.

Worth considering 1. Cars either used/new keep getting pricier so might not loose too much in depreciation, depending how long you intend to keep it, so keep in mind what you want of a car in 3,5 years time (or even more if you plan on keeping it) 2. Financing part of it with a loan and investing the money in the meantime. With compounding the profits you might even offset the cost of the interest and you’ll have a sum of money to fall back on and a finance company to back you up should anything happens

You can afford it, it comes down really on will you enjoy it? Particularly will you enjoy it more more then a 10-12k car and putting the other 8-10k into hobbies you enjoy.

You might enjoy the feeling of driving your new car and maybe it's a part of the persona you show to the world it makes you feel good about yourself and you might get a lot if use out of it. Or, you may become pedantic over such an expensive purchase like someone who bought a new sofa but will never take the throw off or lie down on it incase it gets marred in any way, always anxious and alert if kids go near it.

Are cars an interest to you or just a means of transport? Would you have more enjoyment blowing 8k on a 3d printer, gaming pc, sports club or even a dog. Or, is driving through the Welsh countryside or through the Lake District more your thing?

If you can get a 10k+ interest free CC slap half or more on that. Put the rest in a savings acc / bonds etc for the extent of the interest free period then pay it all off. May as well maximise your interest and hike your credit rating while you’re at it.

We bought a £20k car a few years ago, but it's an EV so it's very cheap to run (1.5 p/mile, £400 insurance, servicing is approx £200 every two years).

It’s nice buying something you like, crack on.

I bought a 15k car on a 36k salary at the time, took a loan and paid it in a year. I don’t regret it and the cost/income ratio was far worse for me.

If you truly want and love the car beyond appearances and can afford all its costs, go for it

Depends whether you live with your parents or not 👀

Your wage doesn’t matter, what does matter is your current outgoings and what you plan for.

If your a live with parents with no bills and no prospects then get a Ferrari……

That's a decision for you alone.

Plenty more with a lower salary than you drive cars I'd describe as stupid and beyond their means. German prestige cars have exploded in recent years as the masses think they've made it when they've got a BMW or Audi with a new numberplate.

I earn similar money to OP but the most I've ever spent on a car is £4.5k on an older automatic Honda Civic which was a few weeks ago. I've got some mechanical knowledge so I can maintain it myself mostly however.

It's dumb if it's a brand new car or a lease.

But if you are buying a used few years old car for cash, thats the best way to do it. It will not go down in value that much and you hold an asset that if needed could resell without major money loss like with brand new.

For comparison, I bought a car for around £20k and I'm on £200-£230k. Do with that what you wish