# Can we afford a second car - Are we doing ok?



## Sarah (7 Jul 2008)

Hi All,

Heres the thing, i keep hearing about "those who got a 100% mortgage in the past 5 years are in big trouble with the downturn". Perhaps you could help me to see if we could tighten up a bit or where we could improve.

Mortgage = 100% at €205000 in 2005
Mortgage rate = Tracker
Mortgage monthly payments = €908 (With the ECB increase prob €948??)
Type of house - 4 Bed semi detached

Outgoings
Sky Digital - €68
Bins Monthly - 26
Credit union savings -  40 pm
Car insurance - 750 yearly
Car Tax - 290
Life Insurance - 33
House Insurance - 29 over nine months
ESB Bill x 2Months - €80 - 180 winter months
Gas bill x 2 months - €130 - 200 in winter months
Eircom bill x 2 months with eircom talk time and broadband bundle - € 130
Weekly shopping - €100
Husbands travel expences  - Husband gets monthly train ticket - €241
My travel expences - Annual ticket deducted weekly from wage - €44
Car - Weekly petrol = €30
Combined income - €56000

We are looking at getting a second car.one bigger than what we currently use whichis a fiesta but we will not be doing a trade in. Could we afford that? Eventually we would like to have children and i am wondering if we could afford this also. ANy help is really appriciated.


----------



## BoscoTalking (7 Jul 2008)

your savings look incredibly small?  Credit union savings -  40 pm. please tell me its a typo! as a born worrier I just need to look at money going into savings!!

If you don't plan on moving from here then don't worry a lot about the negative equity just keep paying it off - and you do have 2.5 years of payments (i assume) so its not 100% mortgage anymore.

Personally i think the car would not be a wise move at present, it costs a lot more than your rail ticket and you don't need one really - if you had children i would still stick to having one car and maybe upgrade to a bigger model. Leave it a while until people are offloading a lot of second cars onto the market - its happening already, and then you may get much better value. 

Speaking of value -  4 bed semi for less than 1k per month - wow I am jealous


----------



## ClubMan (7 Jul 2008)

Sarah said:


> Mortgage = 100% at €205000 in 2005


What is outstanding on the mortgage now and what is the house worth roughly?


> Mortgage rate = Tracker


Are you on the most competitive rate for your circumstances?


> Outgoings


Do you have any non mortgage debts?


> Husbands travel expences  - Husband gets monthly train ticket - €241
> My travel expences - Annual ticket deducted weekly from wage - €44


Could you avail of the taxsaver scheme?


> We are looking at getting a second car.one bigger than what we currently use whichis a fiesta but we will not be doing a trade in. Could we afford that?


Do you need a new/replacement car?


> Eventually we would like to have children and i am wondering if we could afford this also. ANy help is really appriciated.


Not meaning to be smart but of course it's affordable - as long as you cut your cloth to meet your measure and live within your means on an appropriate budget. As the old saying goes _"you *can *get anything you want - but probably not *everything *that you want!"_.


----------



## Sarah (7 Jul 2008)

Hi 

Thanks for the replies

Regarding the taxsaver scheme for the travel tickets, my job does this but my husbands soes not which is why he gets a monthly ticket.
The house is roughly worth around the 270 /280 mark - in these times its hard to judge. 
So far the outstanding is around the €195000 mark on the house.
Other debts are a loan for €2300 which we will have paid off by the end of this Oct 2008. No other loans.
Savings wise, its only the €40 pm but we will be upping this once the loan has been paid off to hopefully around €300/400 a month.
A second car would be very useful as my husband will be working later hours and may be doing a training course, the train times for where we live are only suited to regular commuters so either he wouldnt get home on those days (about 3 times a week) or i would have to pick him up every evening which is about 40 mins drive each way.
Clubman, thanks for the help, i understand that i suppose like everyone you make do with what you have but am just enquiring if the car is doable without too much of a pinch. Maybe Children next year when both of our wages will go up by about a €1000 each!


----------



## ClubMan (7 Jul 2008)

Sarah said:


> Regarding the taxsaver scheme for the travel tickets, my job does this but my husbands soes not which is why he gets a monthly ticket.


Can he not persuade them to facilitate this? After all they stand to save up to 10.75% employer _PRSI _on the ticket price too! Note that the scheme covers both annual and monthly tickets.


> Other debts are a loan for €2300 which we will have paid off by the end of this Oct 2008. No other loans.


The fact that repayments on this did not feature in your outline budget would make me question the accuracy of your first post. You probably need to keep a spending diary, log everything and from that identify your real budget and expenditure which might be cut back.


> A second car would be very useful as my husband will be working later hours and may be doing a training course, the train times for where we live are only suited to regular commuters so either he wouldnt get home on those days (about 3 times a week) or i would have to pick him up every evening which is about 40 mins drive each way.


Would a moped/scooter not be a more cost effective solution for secondary transport perhaps?


----------



## Sarah (7 Jul 2008)

I forgot to mention the loan as we only recently applied for it - Sorry. There are no other outgoings from my origional post.
My husband works for a large bank which have told all employees that they do not faciliate the tax saver scheme! No room for persuasion there im afraid! It would be great if they did though. Cant see why they dont but their not budging!
Regarding a scooter /moped/motor bike my husband and i hate these things both because of the look and sound and also safety issues, we both have lost people who used these forms of transport -just to be clear im not saying everyone who drives these are bad/unsafe drivers but we would not take this option. Also, my husband would be using motorways so these scooter/bikes would not be allowed.

So in answer to my first question - are we financially stable enough to afford another car?
Thanks again for all the replies.


----------



## ClubMan (7 Jul 2008)

Sarah said:


> I forgot to mention the loan as we only recently applied for it - Sorry.


What are the repayments so?


> There are no other outgoings from my origional post.


The figures look too round to be accurate in my opinion. If they are rounded *up *then fair enough.


----------



## Sarah (7 Jul 2008)

sorry, the loan repayments per month are €583 (want to get rid of the loan as soon as possible Which is why the repayments on a samll amount like this are high)
Some of the figures are rounded up to possibly be a euro or two higher but all are accurate (Why would i lie about the figures- im looking for advice on my suitation)
As i said we both will go up on increment by about €1000 a year each. Only a tenner a week but every little helps!
I know with a second car we will have car insurance also which will be alot higher than my own as im am the main driver of our current car.

Thnaks again

Sarah


----------



## ClubMan (7 Jul 2008)

Sarah said:


> (Why would i lie about the figures- im looking for advice on my suitation)


I'm not accusing you of lying! Well not deliberately anyway. I'm simply making the point that when people try to enumerate their monthly expenditure in rounded figures they often underestimate the actual expenditure and inaccurate data is no basis on which to make future plans! You would be much better off keeping a spending diary *covering everything *(no matter how small it may seem - sometimes the small discretionary purchases surreptitiously add up to a significant portion of your overall expenditure) for a few weeks/months and then looking at your *actual *expenditure. And averaging any ongoing regular expenses (e.g. household bills) over the year based on previous bills. Then you can start looking at where potential savings can be made and what a reasonable ongoing budget would look like.


----------



## MrMan (7 Jul 2008)

Depends on how much you are thinking of spending on a second car, your husbands monthly ticket would cover a car loan of say 10/12k but add in petrol, tax, repairs and insurance.


----------



## Sarah (7 Jul 2008)

ok will do, although we shall see how long the diary will last from!! In these diaries, do you write EVERYTHING down such as small purchases, cinema, that sort of thing? Club man, based on what you know about my suitation, apart from the diary, are you of the opinion that we should or should not get a second car? Are we that tight that we can not afford it? 
p.s The second car would not be happening until after Oct (after the loan is finished as we may well need to take anothe rloan out for the car but thise over a longer period).

Thanks

Sarah


----------



## anon473 (7 Jul 2008)

For the spending diary - you MUST write down all your small purchases, cinema, etc. It is precisely the small purchases that slip through your mind when working out where all your discretionary spending goes. The cinema is one cost, the popcorn/ice cream/soda can easily double your spending. The small purchases are the ones that can be the easiest to control (buy a bottle of soda from the local shop before you go in, or better still dont drink soda!)
Good luck - when we did a spending diary for 3 months, it was a real eye-opener.

Anon473


----------



## ClubMan (7 Jul 2008)

Sarah said:


> In these diaries, do you write EVERYTHING down such as small purchases, cinema, that sort of thing?


Yes. Or just get/keep receipts for all purchases (no matter how small) and then tally them at your leisure.


> Club man, based on what you know about my suitation, apart from the diary, are you of the opinion that we should or should not get a second car? Are we that tight that we can not afford it?


Sorry - I can't really say to be honest. I don't really know what it costs to buy/run a car.


----------



## Diziet (7 Jul 2008)

there are two things you should do:

1- a budget. Everything that you spend money on under different categories (food, petrol, mortgage, bills, but also presents, entertainment, clothes etc). Divide annual bills by 12. Deduct all this from your monthly income and see what you have left. 

2- chances are (if you are like everybody else!) that you will be left with a nice sum which is a lot more than what you actually have left in your account every month!

This is where the spending diary comes in. Track your spending and then rework your budget to be realistic, or limit the spending.

If the actual surplus every month is more than the monthly cost of another car, hen you can afford it, otherwise you cannot. You are the only one who can answer this, and you don't really have al the numbers yet to make that decision (judging from the information provide here).


----------



## michaelm (10 Jul 2008)

Sarah said:


> We are looking at getting a second car.one bigger than what we currently use whichis a fiesta but we will not be doing a trade in. Could we afford that?


I would avoid getting a 2nd car if I were you, cars are trouble and expense.  That said you could buy a car for cash (save up a couple of grand) and put the €241/month towards running costs, €241 should nearly cover tax, insurance, repairs and petrol.


----------



## simon44 (19 Aug 2008)

Ever consider a 125cc motorbike? Just saying I had one during college and only cost 8 euro to fill the tank and I got about 80 mpg from it. Tax is only 67 euro and insurance is not too bad because its considered a hobbie activity not another regular mode of transport per say.


----------



## Bronte (19 Aug 2008)

Personally I think the Sky bill is shocking, is that amount monthly?  Is ECB rates go up further can you afford it.  Could you use a scooter rather than your husband if you don't have to go on the motorway (but I agree in the sense that there's no way I'd let myself or hubby on a two wheeled vehicle on the road)  It just seems a terrible waste to have two cars if most of your travel is by train.  You would need to say how much you are going to pay for the car/petrol/insurance and work out that monthly to get better advice.  Are you aware that you are paying 68 Euro weekly for heat and light, any possibility of changing this, and I believe the bills are to go up 40% this winter, seems on the high side for two people out at work all day.  You didn't mention a credit card, do you not have one?  Also what did you borrow the loan for, to give an idea of why you had a sudden reason for borrowing for a short period of time, something one really ought to have savings to cover for especially based on your salaries.


----------



## micmclo (24 Aug 2008)

Sarah said:


> Also, my husband would be using motorways so these scooter/bikes would not be allowed.



Since when is a scooter or motorbike not allowed on a motorway?  You've picked up some misinformation somwhere.

A standard scooter is 50cc and not allowed on motorway. But you can buy scooter with way more power, 400cc is quite common.

Not sure why you mentioning motorbikes. Of course they can use the motorway as long as they are over 50cc and most are.
Cheap as chips to run


----------



## Steve D (24 Aug 2008)

You have a large mortgage in relation to the size of your joint income. Rather than spending money on another car you should be thinking about saving for a rainy day. 

As the country is probably heading towards a recession, it is common sense to try to reduce your outgoings, save as much as you can and keep loans to a minimum because in recessions people loose jobs. 

How safe are your jobs? if you have any doubts about them, you should consider how you would manage if one of you lost his/her job.


----------



## steph1 (24 Aug 2008)

Sky bill is going to go up to 71 euro a month for the package with movies and sports.


----------

