Salary sacrifice 4s vs Turbo

[Mattyh]

I definitely recommend you don't look at crypto today either.

Today was a good time to buy

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[BigBob]

Today was a good time to buy

The only thing i've bought this year that has gone up in value is my Taycan!

 

[Mattyh]

The only thing i've bought this year that has gone up in value is my Taycan!

Just hold, it’s a long term investment for me. I won’t touch it for 10 or so years

 

[Archimedes]

Wtf is salary sacrifice?

 

[BigBob]

Wtf is salary sacrifice?

Tax break by leasing car out of pre-tax income. i.e. swapping some of your salary for a non-taxable benefit.

 

[TaycanHero]

So that 1600 would be after the car and all my bills and mortgage has come out, i only spend like 150 a week on food, going out for a meal etc. My old job 6 months ago I only had 600 left after everything so I’m still 1k better off and would have a new Tcyan

Your money but if you have £2600 disposable income each month, and £1200 of that is leasing a car, it seems a bit reckless, especially if your last job saw significantly lower income.

I would guess you don't have a particularly big rainy day fund for that reason, and now you are more flush with cash the expensive car is now top of your priorities.

Heart ruling the head.

You have a property. I would look at renovation or extension to improve your living space while adding value.

An S&S ISA should see a large portion of funds too.

Build your wealth, not your liabilities.

 

[Mattyh]

Your money but if you have £2600 disposable income each month, and £1200 of that is leasing a car, it seems a bit reckless, especially if your last job saw significantly lower income.

I would guess you don't have a particularly big rainy day fund for that reason, and now you are more flush with cash the expensive car is now top of your priorities.

Heart ruling the head.

You have a property. I would look at renovation or extension to improve your living space while adding value.

An S&S ISA should see a large portion of funds too.

Build your wealth, not your liabilities.

I get what you are saying. I have been feeling more flush as my new job gave me a 30k rise which has made a big difference to my life. Ive still been saving and investing and will continue to. Money is also for enjoying and cars have always been a big part of my life, I’ve always spent a lot on them as it’s my passion so don’t mind it. This is why now I’m like fcuk it you only love once and a new Porsche is a dream come true and SS has given me the opportunity to own one. I have a nice house that I own, I don’t have kids and I can still live pretty comfortably.

 

[npx]

not to be that American but can someone explain what a salary sacrifice is? as far as I can tell we have no equivalent here.

did some googling and I'm clearly not grasping what this is. pension thing? pre tax money skim? apologies if I'm just not getting it.

 

[285kph]

So that 1600 would be after the car and all my bills and mortgage has come out, i only spend like 150 a week on food, going out for a meal etc. My old job 6 months ago I only had 600 left after everything so I’m still 1k better off and would have a new Tcyan

Oh, to be in my twenties again! I still remember some of the dumb stuff I did at that age.

 

[Archimedes]

This is why now I’m like fcuk it you only love once…

Every time I’ve said this it’s preceded a really irresponsible decision that I regretted later.

 

[TaycanHero]

I get what you are saying. I have been feeling more flush as my new job gave me a 30k rise which has made a big difference to my life. Ive still been saving and investing and will continue to. Money is also for enjoying and cars have always been a big part of my life, I’ve always spent a lot on them as it’s my passion so don’t mind it. This is why now I’m like fcuk it you only love once and a new Porsche is a dream come true and SS has given me the opportunity to own one. I have a nice house that I own, I don’t have kids and I can still live pretty comfortably.

Fair enough - life should be enjoyed today.

However, being smart with what is a small sum of money vs. the cost of what you are procuring could mean many, many more cars in the near future.

If I was prepared to burn £30k of my personal money and all I have to show for it is a contract and a Taycan I had to hand back after 3 years, I would instead look at launching a business venture or higher risk investments knowing if they come good, I could have far more than just a leased Porsche.

Money gives you options in life.

Financing emotive splurges can quickly diminish them if things go wrong - and reduce them even more as time goes on.

Sensible would be 25% of your disposable income goes on a car. I presume you are young. We all want that better/more fun tomorrow today, but acting on that with limited resources can hurt not just your today, but your tomorrow as well.

I am only buying a Taycan as I have a lot of surplus cash in my business; there are various tax savings buying a company car; I can't use that cash easily on investments; salary would see vast taxation; inflation also makes it a financially sound decision.

If I had that same money sat in my personal bank account - enough to buy the Porsche outright - there is no way I would be buying one and I am someone who enjoys a good life.

There are so many more sensible things to do with that money that would make me even more money. More money = more choices in life. Make good choices, become very happy. The reverse is true.

I certainly wouldn't be considering a £100k+ Porsche just because of a £30k raise, and with inflation factored in, it sounds like I went through something similar (with a similar salary) back in 2015 when I still worked perm.

I did not feel "rich" despite having a good salary. Leasing a £100k sports car I would have seen as reckless. A heart overruling the head scenario that would likely have reduced my future opportunities, rather than enriched them.

Think carefully about this decision.

 

[OPLA1925]

I genuinely cannot believe you would consider spending such a large proportion of your income on car payments. It’s genuinely astonishing.

I would have thought people would hesitate before spending anymore than 10 percent of net income on a car.

 

[BigBob]

There is lots of good financial advice there, if a little parochial. I can't argue with any of it.

However, there is an awful lot to be said for buying yourself a bonkers sports car while you can still get in and out of it without going on your hands and knees. I similarly recommend a very silly colour too!

As an aside, from what i understood, purchases through pcp/leases/salary-sacrifice puts you right at the back of the waiting list. So it may not arrive until you are grey/bald/crypto-unicorn.

 

[Dimebag]

Wow, you guys are brutal (with good reason though).

Points I’d make:

- spending half your disposable income on a car is quite reckless.

- totally understand that you’re young, had a great pay rise and want to treat yourself but what about the optics? Do you really want to be driving a better car than your boss / managers six months into a new job?

- we’ve got an uncertain economic outlook (putting it optimistically), do you want to put yourself in a position where you may have to hand the car back with your tail between your legs?

- I’m certainly not swinging the old pole here as more than a few of these guys make millions per year but a £30k pay increase isn’t enough to justify the car imo. I was making roughly this amount per month last year and was still nervous about committing to a turbo s and that was actually saving me money monthly compared to my previous car due to fuel / BIK.

Maybe get a slightly cheaper EV, save some money and reassess in a year?

All sent with the best of intentions, congratulations on the new job and £££.

 

[BigBob]

not to be that American but can someone explain what a salary sacrifice is? as far as I can tell we have no equivalent here.

did some googling and I'm clearly not grasping what this is. pension thing? pre tax money skim? apologies if I'm just not getting it.

Tax break by leasing car out of pre-tax income. i.e. swapping some of your salary for a non-taxable benefit.

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