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If your car brakes and you have kids, i'd class that as more of a need than a want, and i'd say finance is a good thing there - if you can afford it.
A girl who used to work where i work was on basic admin salary, but got a sales trainee position which a salary increase, nothing huge, but with the potential if she did well to move up a coupe of salary bands. Soon as she started trainee she went and got a brand new Astra on finance with all the latest features, top of the range etc costing her i think just over £400 a month. This basically crippled her. She didn't do well as sales either, so the other pay rise didn't come.
She couldn't afford it.
That's what i don't get.
Another girl i worked with a long time ago - We were on probably around £1000ish take home p/m, was constantly buying stuff on finance, new TV, new laptop, latest phone, even got a wedding loan.. She was also renting at £500p/m, hew partner wasn't much above minimum wage at the time..
I had none of this and was struggling at the time!
I get that it can get you out of a bind.. i think it's the financial awareness bit that gets me.
Seriously: If you value it, take/fetch it yourself
That renting culture - whether for the TV, the fridge or the house - seemed to become viewed as a bit "council estate" sometime over the years, maybe around the same time as all the council estates were being sold off to private buyers.
Today's finance culture is really just a return to the 50s/60s renting culture.
It worries me for two reasons.
Firstly because it's all based on low interest rates and (for cars) projected resale values. So, you can get a nice new shiny BMAudiBenz today, and it'll cost you £299/mth for 3 years. No brainer, go for it. At the end of the 3 years, you get hit with some extra charges (for excess mileage or "damage" or whatever), which is a bit painful.
Then, in 3 year's time, interest rates have also gone up, and residuals have slumped because of the glut of 3 yo "prestige" cars now available s/h from all the expired PCP deals. To replace that same car, the price is now £499/mth. What are you going to do? Find the dosh, or hunt around for a 5yo Focus like the one you used to have?
(Actually, I can see similar finance deals being developed for the 3yo cars, if only to keep the stock moving).
The second reason is that, whilst £299/mth is a no brainer today, interest rates are only going to go one way over the next 5-10 years. As your mortgage increases, and increases, and increases, (and house values fall) we're likely to see another of those negative equity situations arising, and another massive squeeze on household budgets.
But everyone has a different attitude to risk, debt, and having "things" ...
I was talking with my cousin recently and she said she'd got about £8-9K of PPI compensation. When she was younger and not getting paid much she'd take out loans for anything she wanted - car, holidays etc. and was suckered into buying PPI for all of them.
I'm quite debt-averse by nature, and being made redundant twice in 5 years only made me more so. Many people would go under if they weren't paid for 2 or 3 months.
It's as if (ie it's a massive simplification for an internet-argument) we've had one full generation of everything getting better, then those guys hit 50 and realised they could squeeze the middle and the bottom far harder but as long as only a very few are really, truly desperate then they'll escape penalty for causing it.
Obviously not literally an entire generation, just the ones in charge...
As for me, I had what felt like a chunky bit of debt when I was 22, then escaped and sorted myself out and now won't touch debt except a mortgage and a credit card that I pay in full every month and use to get free flights.
Seriously: If you value it, take/fetch it yourself
If I want something and can't afford it, I'll wait. It's what people used to do.
It's just not how I work I guess.
I wouldn't even take that sort of debt.
I paid off my mortgage a few years ago and have been putting money into savings ever since. There isn't anything I could realistically want to purchase now that I would need to borrow money for unless I wanted to buy a second home.
There's no problem with providing the option of debt for people as long as the lender is honest about what it costs. If I wanted to become long-term homeless so I can have a couple of good months at the casino I like to think I would be able to do so.
I've never had a loan (other than a mortgage) or overdraft either.
Whenever I've had credit card I always pay the monthly balance off in full. I just use it as cashflow aid for my benefit. I would never dream of using a credit card on the basis of incurring interest charges.
If I want something, I save for it first. If you don't have the money to buy, you can't afford it - end of.
I always make sure I have money put aside for a rainy day in case an emergency replacement or repair is necessary.
I used to be terrible with credit cards though. Had about 16 at one point.
Of course you could buy a three year old car and take your chances. Its about personal choice really.
I can see the point in PCP on cars because interest rates are so incredibly low, but it still isn't something I would bother with. For a lot of people (like @snap) it makes a lot of sense though.
Credit is good, as long as it is under control.