How do the British afford to be Car Nuts?

[efoolution]

I checked out some UK prices for cars available in the US and was absolutely astounded at the prices the British cough up to drive.

... you have to take the current weakness of the american Dollar into the equation too at the moment. A "normal" british or european price that has not changed over the last years, will seem a lot higher (to you, not to us) because of the value loss of the Dollar. The Us-Dollar has lost more than 30% of it´s value over the last 5 Years compared to the Euro. Count that into your calculations and you´ll be less surprised ...

[upyourego]

Isn't Jersey a tax haven?

Yeah it is a tax haven but it's still pretty expensive for people working here although tax is a maximum of 20% - there is a standard rate everyone pays regardless of income.

Although if you're on a lower income or have children or are married or own your own home or even use childcare you get allowances.

I pay about 5% income tax and another 6% in social security so it's pretty good.

The tax haven element is really there for companies oh and they prefer the term low tax jurisdiction.

Oh and although there is no VAT we do have GST (Goods and Services Tax) which is set at 3% - this came in about a month ago to much public protest.

Oh and the DVD prices I gave - that's paying full price when they first come out - of course you can get them cheaper if you're prepared to wait but the average cost of a Doctor Who DVD is £16

[teeb]

Because of RHD cars the Brits are being ripped off.
the rest of Europe is still getting ripped off, but not by so much.

If this is the case, why is it that many many Brits used to go to France/Belgium to order their (RHD!) cars and then drive it back through the Chunnel?

It still goes on to some extent but the saving isn't as massive anymore. Plus internet brokers are generally cheaper.

[turboswede]

I think the answer to my original question is that the prices I quoted in the UK include VAT and I think VAT runs about 20% in the UK. So, if you take the US prices one would need t add about 10% for state/local sales taxes (if applicable) for a comparable cost comparison. Given a 20% VAT and the weak dollar the 30% price difference seems reasonable.

I am not an international tax specialist but I would wager that there are additional Duties/Tariffs imposed on products coming into the EU and additional "gas guzzler" and luxury taxes making up the additional 10,000 GBP difference. the economics arguments proposed just don't hold water as the first rule of the free market (before supply and demand) is that if there is a way to make a buck people will find it and the market (absent external forces) will stabilize. So, if taxes/duties/tariffs were not the cause of the price difference someone's local Vuxhaull dealership would start shipping Corvettes (for example) directly from New Jersey and start selling them in the UK for, say, 30,000GBP, even after shipping costs they would realize a handy 5,000 GBP profit by selling the car 15,000 GBP under retail.

If the dealer could do that independently I am sure GM would have thought about it and priced the Corvette in the UK accordingly.

I think VAT is the answer.

[Jmiller]

You cant just convert one countries car prices into another's and use the currency conversion. Like other people said you have to look at the big picture. Cost of Living, Wage Rate, Health Care, Food, etc. You also have to look at what people do with their money. For example, real estate is so expensive in Japan most people do not own a home. This is in contrast to the US where a large percentage of the population own homes. Young people in Japan tend to mod there cars a lot because its expression and making something theres, think of it kind of like painting your house.

Another thing is manufactures price cars differently in different countries to target to different buyers. Its called marketing.

[Cobol74]

In the UK VAT is set at 17.5% for most things and has been for some considerable time. A long time ago there was a special car tax that was done away with in the 1980s I think.

[janstett]

Well yeah the following things become obvious with a little chatting back and forth.

- Cars in the US are cheap.
- Surprisingly, even import cars in the US are cheap. European cars sold in the US are cheaper than they are in their domestic markets.
- Europeans, generally, have less disposable income because everything is so expensive (notably gas/petrol, but we are catching up), higher taxes, lower wages. Also in metro areas tight streets and good public transit drive them towards micro city cars or no car at all. Also look at the smaller properties typical in urban Europe and Asia (e.g. Richard bought a charger and it was too big to fit in the garage).

As a result, the big differential I see between American car culture and the Europeans, is the lack of "middle" range cars. In other words, the plebes have these tiny horrid 1 liter econoboxes made by Peugeot and such. A successful plebe can aspire to something as lofty as a Ford Mondeo. Then you have all the magnificent high end cars (Merc/BMW etc.) that only wealthy people can afford. And there doesn't seem to be anything inbetween. There seems to be a huge gap in Europe between the economy cars and the high end cars, I'm guessing that's where the Japanese fit in.

In American car culture there is a middle ground that does not exist in Europe. Cars like the Mustang -- you can't touch a V8 in Europe for twice the price. If I were a software engineer livng in London, could I afford a car with a 400hp V8? Now granted this middle ground is disappearing in America too.

So in general I'd say in Europe it's harder to be a car nut with a car of the performance level that any employed American can afford. One is more likely to have a small hot hatch. And I'm ignoring quality and fit/finish issues that would also alter buying habits.

On a visit to Tokyo, I discovered one of my hosts (a junior engineer) was a car nut and did Gymkana (autocross) so we got to talking. The car lives outside of Tokyo and if he's lucky he gets to drive it once a month. It's rather akin to how owning a horse would be here if you didn't live on a farm -- keep it away from the city and visit it from time to time. I suspect it can be a lot like that in the population centers of Europe as well.

[janstett]

But I don't think the additional wages us Brits get are enough to even out the price difference.

Maybe it's just my profession but I've always heard the wages were lower in Europe (from Europeans working in the US). Software Engineering.

[turboswede]

As a result, the big differential I see between American car culture and the Europeans, is the lack of "middle" range cars. In other words, the plebes have these tiny horrid 1 liter econoboxes made by Peugeot and such. A successful plebe can aspire to something as lofty as a Ford Mondeo. Then you have all the magnificent high end cars (Merc/BMW etc.) that only wealthy people can afford. And there doesn't seem to be anything inbetween. There seems to be a huge gap in Europe between the economy cars and the high end cars, I'm guessing that's where the Japanese fit in.

This is the answer I have been thinking of, I think that in the UK and Europe the state wants folks to have cars (Ford, FIAT, Pug, Volvo, etc. generate a lot of tax revenue) but only the cars that the state approves of. Once you reach a specified size/performance level (in Italy is it still 2.0 liters?) the state comes in with economic disincentives to discourage the sale of the "mid level" cars.

I guess that would mostly impact the professional "middle" classes who could afford to pay a bit more for a car but are still price sensitive (on the margin so to speak).

[turboswede]

Maybe it's just my profession but I've always heard the wages were lower in Europe (from Europeans working in the US). Software Engineering.

Even with the deflated dollar, for the professional middle class Jobs pay more in the states than they do in the U.K. and Sweden. I know what my firm would offer me to move to Manchester or Göteborg and I am much better off staying put.

I think the same holds true for union employees in the US as well, I think the UK and other countries in the EU pull ahead is at the lower wage levels or what are termed the "working poor" over here. I think the federal minimum wage is around $6.00/hour (3 GBP) but a lot of folks earn less than that due to loopholes with US labor laws. After taking into account lack of healthcare and payroll taxes, even at minimum wage folks are taking home less than $3 (1.5 GBP) per hour.

[teeb]

This is the answer I have been thinking of, I think that in the UK and Europe the state wants folks to have cars (Ford, FIAT, Pug, Volvo, etc. generate a lot of tax revenue) but only the cars that the state approves of. Once you reach a specified size/performance level (in Italy is it still 2.0 liters?) the state comes in with economic disincentives to discourage the sale of the "mid level" cars.

You credit the state with too much intelligence

You are right, though, that the more petrol-thirsty the car the more 'economic disincentives'. Well, I think in the UK they've now arranged car tax by emissions.

It's not designed as a disincentive, more as an incentive to buy a smaller, cheaper, better-for-the-environment car.

I'm not defending the state's choice, here, I'm just trying to explain why they do it.

On the other hand, bigger cars by their nature have their own disincentives. I did some quick mental calculations for petrol costs in a 20mpg car and a 50 mpg car (assuming 10,000 miles a year and £1 a litre) and I reckon the 20mpg car's petrol bill will be £2273 a year and the 50mpg car's bill will be £909. This should speak louder than government tax bandings should - especially as the £1364 difference between the two is bigger than the £950 difference between the most polluting car's tax band and the least polluting.

As a result, the big differential I see between American car culture and the Europeans, is the lack of "middle" range cars. In other words, the plebes have these tiny horrid 1 liter econoboxes made by Peugeot and such. A successful plebe can aspire to something as lofty as a Ford Mondeo. Then you have all the magnificent high end cars (Merc/BMW etc.) that only wealthy people can afford. And there doesn't seem to be anything inbetween. There seems to be a huge gap in Europe between the economy cars and the high end cars, I'm guessing that's where the Japanese fit in.

Possibly...I'm just thinking out loud here.

From £5k to 10k, you're looking at superminis or other small hatches - Fiat Panda, Suzuki Swift, Ford Fiesta and so on.
10k to 15k, hatchbacks - VW Golf, Ford Focus etc.
15k to 20k, standard saloons - Ford Mondeo, VW Passat
20k to 25k, basic 'premium' saloons - Audi A4, BMW 3 series
25k to 35k, less basic 'premium' saloons - Merc E class, BMW 5 series
35k to 50k, premium 'premium' saloons - Jaguar XF
50k plus, luxury saloons - Jag XK, BMW 7 series, Merc S class, and everything else

This is just thinking out loud and is obviously hugely simplified (in most cases it's low end and if the cars get specced up a lot they jump up a band). It also ignores 'performance' models (Focus RS, Golf GTi, RS4, M3 etc), and anything that isn't a hatch or a saloon (4x4s, SUVs, coupes and convertibles).

I don't follow your logic about there being a large gap in the market, although I agree that in the US you've generally wider range and choice.

[Sycal]

http://www.cerge-ei.cz/news/data/McWage%20Index.pdf

Using a simplified model above, minimum or basic wage rates are almost identical in the UK compared to the USA(slightly above on the MacWage rankings ). However where in the US you have to pay for health insurance and deal with its pitfalls or have to pay for an un-subsidised college education… my degree at a top Scottish university left me with fees of around $6000 for the entire course, compared with an exponential amount in the US. This tallied with other matters, shows a different distribution of outgoings in the UK from the monthly wage packet. The US may have less taxation however less and poorer services are provided by the state, (Michael Moores Sicko is an excellent comical documentary detailing these pitfalls). In the UK this leads to higher costs for life’s luxuries such as cars, but balance is provided throughout the benefits gained in society. You can’t simply claim everything is more expensive without looking at the benefits gained from this.

As for the predominance of smaller cars, this isn’t necessarily an economic issue, many smaller cars are priced equally within the market with larger cars, however this side of the Atlantic environmental issues are being pushed as well as sensibility, though with Chelsea tractors we aren't immune to failings!
I pose the question what is point of having the gas guzzling trucks I see clogging up the streets within the major US cities? Is there a need for a 4 litre pick-up when living in a city such as New York?
And as for not managing to have a 400hp V8, put your mustang around a proper track with a good hot hatch or track car like Golf GTI or Civic Type-R or lotus Elise and you'll find some problems...we have an ingenious invention in Europe, its called the corner...there’s more to cars than power, hence why American cars do not sell in this market; you need a developed product. The Mustang is not sold in the UK except as an import hence why it doesn’t have a comparable price point.

I’m sorry if this opinion is rather harsh, however working on both sides of the Atlantic, I have gained an insight into both markets, at times though the ignorance by a proportion of Americans to the outside world does become frustrating over time…With the bigger picture in mind I’d much rather be paying my premium for my motor and living this side of the pool…

[janstett]

I don't follow your logic about there being a large gap in the market, although I agree that in the US you've generally wider range and choice.

I guess you're right, and I guess my view is biased by the fact that we have tended not to have the "lesser" model Mercs/BMWs etc here in the US, combined with our lower prices for the "premium small" cars like the upper VWs, etc.

And as for not managing to have a 400hp V8, put your mustang around a proper track with a good hot hatch or track car like Golf GTI or Civic Type-R or lotus Elise and you'll find some problems...we have an ingenious invention in Europe, its called the corner...there’s more to cars than power, hence why American cars do not sell in this market; you need a developed product. The Mustang is not sold in the UK except as an import hence why it doesn’t have a comparable price point.

Please stop falling back on old, hackneyed stereotypes so easily. You'll notice in my signature my 400hp V8 going around a corner and it isn't falling over (in fact you'll notice less body roll than my Porsche under load). Cars such as the upcoming Camaro and Monaro-derived GTO/G8 have the big motors but can also handle and have adequate brakes. Your frozen 1970 stereotypes are not applicable. My point was simply that in Europe the average person can't touch a V8. I could not afford to have such a car, if it existed, doing my job in London. I expect the "cheapest" V8 one can buy in the UK is the Monaro and how much does that cost again, was it something like 40,000 Pounds, and could the average person afford it? Could you afford it?

And, on a track, I'm sorry but as opposed to some carless teenagers here I have been on a track and I have a big personal bias against wrong-wheel-drive hot hatches (I may make a personal exception for the Mini), which is right or wrong all the average wage-earning European enthusiast can afford. I'm not in to torque steer and it's rare to find a car in that class with a limited slip diff for putting down power out of corners (one can get one optional on the Mini for example but some cars don't even offer it at all). And an Elise in the US will set you back $50,000 and really doesn't even belong in the class of cars an average wage-earning person could afford.

I'm curious, what's the cheapest car one can buy in Europe that has at least 300hp, rwd, and a limited slip diff? And can the average working man afford it? That's my mimimal bar for an enthisast, track day car. Over here $25k will get you a Mustang GT or the upcoming Hyundai Genesis coupe, both of which meet those requirements.

[Hidden_Hunter]

I'm curious, what's the cheapest car one can buy in Europe that has at least 300hp, rwd, and a limited slip diff? And can the average working man afford it? That's my mimimal bar for an enthisast, track day car. Over here $25k will get you a Mustang GT or the upcoming Hyundai Genesis coupe, both of which meet those requirements.

My guess the VXR8 would be the cheapest ticket to that

[janstett]

^ if true, then 40,000 pounds = $80k, and some of the cars one could buy here for that kind of scratch would be a top of the line Porsche Cayman S with change or a 911; clears a Z06 with dealer markup and easily clear a base Corvette; will easily clear an M3 or get you a 650i or 550i. I earn a good living and I'd have to go way out on a limb to have any of those cars.

How much does a BMW 135i go for in the UK?

That's the point of the topic, isn't it? It costs a lot to have a good car in the UK.

[Karoug]

My guess the VXR8 would be the cheapest ticket to that

The VXR8 is not avalible with LHD so that only applies to the UK..

[teeb]

My guess the VXR8 would be the cheapest ticket to that

A Mitsu Lancer Evo X will get 290bhp for £28k, £7k cheaper than the VXR8.

That's the point of the topic, isn't it? It costs a lot to have a good car in the UK.

It costs a lot to get a powerful car or a fast car, yes. Nobody would argue otherwise.

'Good car', though? Good implies subjectivity. The Vauxhall Corsa was WhatCar's CotY last year, but it starts at £7,800.

I know you probably meant 'good' as in 'one that appeals to us petrolheads' or 'fast one', but sloppy word choice like that annoys me.

[Hiro11]

Don't mean to derail this conversation, but I couldn't let this post just pass...

However where in the US you have to pay for health insurance and deal with its pitfalls

Without getting into a drawn out argument, you seem to be cribbing Guardian talking points. The vast majority of health insurance in the US is subsidized or entirely paid for by employers. It's far from a perfect system, but I'm not sure it's any more expensive for the average American (as a percentage of income) than the tax-based funding for the NHS.

or have to pay for an un-subsidised college education… my degree at a top Scottish university left me with fees of around $6000 for the entire course, compared with an exponential amount in the US.

State schools are not that expensive and can be world class. Also, there are huge scholarship programs here. yes, it's more expensive to go to college here, but the University system is at least an order of magnitude larger (so people can actually afford it here, despite what you imply) and may be better on average.

(Michael Moores Sicko is an excellent comical documentary detailing these pitfalls).

Ugg. Why do Europeans latch onto Michael Moore as some sort of soothsayer of America and its failings? You are aware that this guy is essentially a pamphleteer and that there is another side to every story he presents? How exactly did you feel about the way Moore presented the NHS? Where would you rather be seriously ill, Cuba or the US? be honest.

In the UK this leads to higher costs for life’s luxuries such as cars, but balance is provided throughout the benefits gained in society. You can’t simply claim everything is more expensive without looking at the benefits gained from this.

That's a very dubious and somewhat meaningless statement. I'm not sure which British "benefits gained in society" you're refering to. To dramatically over-simplify the situation, yes the US has a tendancy to privatize things, while the UK has a slightly (very slightly) greater propensity to socialize things. Each approach has benefits and drawbacks, socializing services/benefits is hardly a panacea. For example, the NHS is hardly a universal good. Just that fact that you're terming a car a "luxury" is an indication of the differences between the US and the UK. I'm not saying the US is better or offers across the board a better standard of living, just that it's very hard to make these comparisons. For example, having a car here is more a necessity than anything.

As for the predominance of smaller cars, this isn’t necessarily an economic issue, many smaller cars are priced equally within the market with larger cars, however this side of the Atlantic environmental issues are being pushed as well as sensibility, though with Chelsea tractors we aren't immune to failings!

It has much more to do with relative gas prices, driving conditions (my job requires a 80 mile roundtrip daily driving commute, which in Britain would be unthinkable), public transportation availability, geography (the US is a hell of a lot bigger than the UK, the entire UK would fit into Oregon), historic government policy etc than a propensity to caring about the environment. Don't assume that simply because Brits tend to drive smaller cars, they're somehow more virtuous than Americans. Assuming a moral high ground towards the dratted Yanks is a common failing I see from Brits and it really gets tiresome.

I pose the question what is point of having the gas guzzling trucks I see clogging up the streets within the major US cities? Is there a need for a 4 litre pick-up when living in a city such as New York?

This country is the only one I can think of that has the "pursuit of happyness" in it's motto. Yes, the vast majority of Americans would agree with you that driving a Hummer through New York City is absurd. But, the vast majority of Americans would also say that if it makes people happy, more power to them. Also, once again, gas prices are a fraction of UK prices here and drving conditions are completely different, so it's not as completely ludicrous from an economic perspective as it would be in the UK. Once again, don't assume that this is due to the virtuousness of Brits and the evilness of Yanks.

And as for not managing to have a 400hp V8, put your mustang around a proper track with a good hot hatch or track car like Golf GTI or Civic Type-R or lotus Elise and you'll find some problems...we have an ingenious invention in Europe, its called the corner...there’s more to cars than power, hence why American cars do not sell in this market; you need a developed product.

Stop buying Clarkson's bullshit. The US is a much bigger market than the UK for all of those cars (except maybe the Elise). Yes, we actually do buy BMWs (biggest market in the world), Porsches (biggest market in the world), Ferraris (biggest market in the world) etc. There are many, many more road tracks here in the US than there are in the UK. This is a big, geographically diverse country and it's ridiculous to assume that all roads here are arrow straight. There are regions (New England, the Rockies etc) of this country that are much bigger than the entire UK that offer superb driving. Also, don't assume that Americans think that the Mustang is the height of engineering prowess either. It's just the cheapest way to get a big V8 with 300bhp. If they sold them in the UK for 15K pounds, there'd be a line out the door there as well. Anyway, the typical American car is not a Mustang, it's a Honda Accord or Toyota Corolla, just like the UK.

I’m sorry if this opinion is rather harsh, however working on both sides of the Atlantic, I have gained an insight into both markets, at times though the ignorance by a proportion of Americans to the outside world does become frustrating over time…With the bigger picture in mind I’d much rather be paying my premium for my motor and living this side of the pool…

Outweighed only by your ignorance. Let me assure you, you really have no idea what you're talking about and your presumptions are condescending and patronizing. It seems like every statement you make can be predicted by thinking "what conclusion can I draw from this circumstantial evidence that will paint the US in the worst possible light". Depressingly, lots of Brits seemingly love to think similarly.

[Meio]

I'm curious, what's the cheapest car one can buy in Europe that has at least 300hp, rwd, and a limited slip diff? And can the average working man afford it? That's my mimimal bar for an enthisast, track day car. Over here $25k will get you a Mustang GT or the upcoming Hyundai Genesis coupe, both of which meet those requirements.

Remember the differing philosophies for enthusiast track day cars. What's your minimum weight?

For example I could get you a Caterham 7 which could potentially kill your Mustang around an Autocross course in the right hands for less money, but it would only have 105hp.

(Caterham 7 Classic - £12,999 on the road)

If you wanted to get flash with the Caterham range you'd struggle to spend £40k and you'd end up with a car that could obliterate anything the US factories have to offer in any test other than top speed. Look at the unofficial Dunsfold lap times posted by Dunlop: http://en.wikipedia.org/wiki/Power_l...televised_laps

I suppose what I'm saying is that where an American might buy a coupe/saloon and then progressively mod it to suit their needs, while driving it to work every day. A Brit is more likely to either drop a wedge on something mad to keep in the garage for the weekends while driving to work in something dull and relatively cheap, or the same but building the weekend car from a kit.

And before someone starts trying to troll me up, remember I said "might" and "likely".

Remember that over here it is not advisable to drive something that drinks fuel all the time, unless you are rich; Driving around in a super-light rollerskate is less likely to get you squished by a giant truck, because there are far fewer of them and their drivers are often much better trained; We have temperate weather, a smaller proportion of people over 40 stone, and no legal requirement to install certain passive safety devices if they are not really needed. So we can have cars which are small, light and agile, unencumbered by aircon, fatboy seats, airbags. We can drive them on the road in relative safety.

So why specify 300hp+?

[teeb]

Remember the differing philosophies for enthusiast track day cars. What's your minimum weight?

For example I could get you a Caterham 7 which could potentially kill your Mustang around an Autocross course in the right hands for less money, but it would only have 105hp.

(Caterham 7 Classic - £12,999 on the road)

Mmm.

If instead of asking for a car with 300bhp, you asked for one with (say) 300 bhp / ton, then the UK's cottage car industry would come into its own.