Can you imagine it? It’s sunrise, a lovely clear day and as you lookout of your window, you see a Lamborghini. Not just any Lamborghini, /your/ Lamborghini.
Now owning these cars are mostly for the super rich, but just how much do you need to be earning to afford this dream car?
Nearly all cars go down in value over time, they get little scratches, engines start to get funny quirks and components start to fail. Depreciation is the amount that the car will go down. As you can see, we’re using the Huracan LP-610 2015 model for this example. From the graph below, the Brego tool has predicted that the standard Huracan will lose a little north of £18,000 in one year.
For a Huracan costing £139,000 the one-year residual value target would be just over £120,000.
The bad news is that no matter what purchasing method you chose, you will lose this value - there will be things to minimise this depreciation, but generally speaking - you should account to lose this amount of money.
In our example today, let’s say that you keep the car for 6 months; enough time to really have a great time in the car and use it to its’ full potential - so that’s £9,000 so far for a Lamborghini.
Now that we’ve covered depreciation costs, it’s time to move onto ownership costs. Within our ownership costs we cover petrol, servicing, warranty and insurance.
So with everything? That’s an extra £5,000 for the 6 months. But for the sake of argument, let’s assume that you can get away with not having a service or warranty (though we’d actually recommend against this, warranty can be the difference between fun and not-so-fun car ownership, trust us). Without those things though, we come to £1,250 for the 6 months.
Total so far: £10,250 for 6 months of Lamborghini.
Ways to buy a Lamborghini
We’ll go into this in more detail as this series continues, but there are several ways to go about buying a supercar:
1. PCP Finance A PCP basically means that you pay a small(ish) deposit, finance some of the car and then have a final balloon payment. This final balloon payment is the interesting part, it’s basically the finance company or manufacturer saying “we think your car will be worth this much after this amount of time”. This figure is also called Residual Value. Now the better the residual value, the higher your balloon payment could potentially be, the higher the balloon payment, the lower your monthly costs. Typically for a car like this is a couple of thousand pound a month, depending on your deposit - but if you had a service that could more accurately predict residual value (like brego.io) then that could be reduced.
2. Outright Payment If you’re lucky enough, then you can buy outright and sell after the 6 months. Doing this skips out any interest you may have to pay on a PCP or other method and means that the true cost of ownership is what we’ve discussed today (depreciation and other ownership costs) . This is why, typically, it’s better to buy outright, but not always - we’ll cover more on this topic in another post!
So what income do you have to be on? That honestly depends. If you want to live the luxury life as well as owning a supercar, you need to have quite a bit coming in every month. But if you lived rent/mortgage free, didn’t have an appetite for anything other than baked beans and water and typically spent your evenings alone looking at the one item of luxury you’d own.. You could afford this car with roughly £40,000 of yearly income on a PCP. Don’t take this for fact, and we’d seriously advise against this (that’s quite literally the reason we started Brego) - but /in theory/, that would be doable..
How can we help? We started the company to help those wanting to achieve the goal of owning their dream car. We love cars. We love finance and that’s where our software helps you. Brego uses artificial intelligence to accurately predict the residual value and ownership costs. We have over 80 million data points for our algorithm to run through and a team of experts on hand willing to help out. Register now at https://www.brego.io for free info like this and more offers to come.