A lesson in classic car Fuzzernomics
Listen, no Englishman likes to talk about his financial disposition, and I’m no exception. But give me a six-figure bank balance, without the inclusion of decimal points and I’ll be broadcasting it from the rooftops. Don’t bother looking up just yet.
So, what I’d like to know is, how the blue blazes do folks afford new, or even relatively recent cars? I’d also like to add: Why bother? Alright, I understand that our Western culture’s dirty little secret is permacredit; keeping ourselves in debt, while looking like high rollers, at least on the driveway. And at this point, company car types can zip your rips, as you’re too busy living the dream… for the time being.
I’m no banker, although I’ve been called something similar, but, surely, getting in hock for £10k to £15k over the course of five years must leave a punter with a bill of around 20% APR per annum. That’s a grand a year on your £15k loan, or thereabouts. Add to that the repayment of the actual loan and that comes to something like £333.33 per month. To many, that’s the same monthly amount as a 15-years-old mortgage.
During that time, the £15k car has plummeted to around £5k in value and needs to be replaced, but equivalent £15k cars are now £20k-plus and so the cycle continues. Meanwhile, in a parallel universe, or next door, a canny family has just bought a sub 100,000 miles, 10-yearold Ford Mondeo estate for about £2k. In two-and-a-half years, to match the number of kids, they’ll plough a similar furrow, although by this time, the equivalent car will probably cost £2.5k.
So let’s make that £4.5k on buying the daily driver over the next half decade and it’ll probably hold a residual value of £500 at sale time, so there’s a grand in the bank after five years. Now we’re going to convince ourselves that a loan is normal.
Therefore, taking out a £10k loan right now will buy a decent Triumph Vitesse. Keep the old tub in good order and it’ll probably be worth at least the same, if not more, in five years’ time, which could work out to be the same amount as the loan repayments and you’ve had shed-loads of fun with it in the process. And you own it.
So, although a Mondeo daily driver may not be to everyone’s tastes, it only need be used for anonymous journeys, leaving the ‘Vitesse’ for high days and holidays.
Please feel free to use the above, cod-science and poor mathematics to justify the purchase of a tasty classic car of your choice for use over the next few years. You may end up quids-in.
Fuzz Townshend juggles a career writing for CCW, running a classic car restoration workshop and being on the telly a lot.
‘Taking out a £10k loan right now will buy a decent Triumph Vitesse’