AA research suggests that after three years, a car will have depreciated by 60% from its original showroom price tag, and that is if the car is averaging 10,000 miles per year. The biggest losses come in the first year however, with a deduction of around 40% being made by the end of the first 365 days. Obviously, there are different ways of putting the brakes on depreciation. Keeping the car clean, regular servicing in accordance with manufacturer’s guidelines, and one eye on the mileage gauge, will all go a long way in reducing potential losses. But is there another option to consider?

However, when the hypothetical family from number 28 parade the street in their new Mercedes A Class, doing somewhat of a victory lap, Google is just seconds away as we scout our next big purchase.

Funding the initial payment

In reality not everyone has tens of thousands of pounds kicking about in their spare bedroom. With PCP, the payment is broken down into three major chunks.

Firstly, you’ve got the initial deposit which is usually 10% of the car’s showroom value. Secondly, the monthly payments which will include enough to cover the depreciation costs incurred throughout the contract. Finally — and this is where things change once the final payment of the contract has been made, you get the option to either return the car or take a new one on a new contract. Or, you can pay a balloon payment and then the car is yours.

Another option is taking out a PCP lease - the monthly repayments are significantly lower than they would be with a finance deal. The option then presents itself is to drive a car that you would initially have deemed to be significantly out of your price range. Therefore, if you don’t have a big deposit and want lower monthly repayments, then this might be exactly what you’re after.

Personal Contract Purchase

A personal contract purchase (PCP) is proving itself to be a popular option amongst those who pick finance, with 78% of those choosing the agreement. Admittedly, it goes against everything our parents have told us to do, in regard to owning our own car, but if you can battle those initial demons, then we’re here to show you why this might be for you.

The beauty of PCP, particularly if you don’t use your car for your daily commute, is you can effectively buy a weekend car. When purchasing a new car outright, you are restricted by the constant reminder that you will have this car for the foreseeable future. With PCP, you can buy the car that caters exactly to the needs of your evenings and weekends. For example, an SUV if you go camping with the kids most weekends throughout the summer, or a two-door roadster, if your Sundays are filled by coastal runs. And, if your circumstances do change, you can simply exchange the car.

Not only has PCP offered motorists a car they would never have been able to otherwise afford, it has in some sense saved the British car market. For the past three years, the number of new car sales in the UK has stayed above 2.5million units per year, in comparison to 2011 when it was only 1.9million.

Premium brands such as Audi, Mercedes, BMW and Jaguar Land Rover have all performed outstandingly through the system. This is due to the fact these cars hold their value better, and therefore depreciation is less, ultimately benefiting both dealer and driver. Mercedes reported a 100% upturn in UK sales since 2010.

Mileage

Congestion charges, heavy traffic, and the cherry on the top of the cake — parking. Three reasons many drivers in the UK have steered away from the daily commute in the car and opted for public transport. A decade ago, our decision when purchasing a car will have depended hugely on our day-to-day usage — but when that isn’t the same, why should the choice be?

The average annual mileage of a car in the UK is 7,900. One drawback of renting your car through PCP is that is that when initially taking out the contract, you are given a mileage restriction and if you exceed this, you will be penalised. If, however, you would consider yourself to be one of those average UK drivers, then PCP offers no qualms. The opportunity to purchase a new contract once your current one is up means you aren’t going to have spent your days driving around in an old car with high mileage.

In summary, with more and more dealerships offering customers the opportunity to own a new car for £99 a month, when their total gym membership and mobile phone contract equates to more — well, it’s a no brainer.

Sources:

https://www.ft.com/content/0e651206-0ee1-11e7-a88c-50ba212dce4d

https://www.thinkmoney.co.uk/news-advice/what-is-the-average-miles-driven-per-year-in-the-uk-0-8581-0.htm

https://www.lookers.co.uk/finance/pcp/

http://www.theaa.com/car-buying/depreciation

https://www.autoexpress.co.uk/car-news/90794/pcp-personal-contract-purchase-car-deals-explained

https://www.telegraph.co.uk/money/consumer-affairs/should-rent-next-car/

But if you have to spend £20 every year on a replacement pair, then over three years that’s £60 spent. It makes more sense to spend that £60 at the start on a pair of shoes that will last three years or more, especially if they are more comfortable and a higher quality.

Your shopping habits have a huge effect on the environment too, and it is certainly suffering for these so-called ‘fast-fashion’ trends. While scooping up a dress for £5 might seem like an exciting bargain, let’s be honest, the price might be more the motivator in the purchase than the style, quality, or comfort. More and more of these clothes just end up being worn once or twice before heading to the bin. In fact, in a survey by Method Home, of 2,000 British shoppers, nearly a fifth admitted to throwing clothes in the bin.

What impact can fast fashion have?

With fashion trends changing faster than ever before, there’s an increasing pressure on consumers to change up their wardrobes faster. But, with our money only stretching so far, many of us are turning to cheaper outlets for our clothing.

Cut-cost fashion must also find somewhere to make savings along the production line. You can’t sell a £5 dress without using cheaper materials and such. This often leads to garments made quickly with non-organic fabrics. Plus, as the Independent reported, the process of dying these clothes is the second largest contributor to water pollution.

While the short-term purchase may be cheaper, the cost to keep replacing the item over the years will add up. If a more expensive version will last a number of years, it could end up being comparatively cheaper.

By its very nature, it is expected that the garment you have purchased will not be kept long, nor will it be expected to last for years. On the flip side, fashion with an emphasis on quality and durability will see you through. This manifests particularly in the threads lost during washing. Cheap clothes tend to shed tiny microfibres when washed, which end up polluting our oceans.

The cost of quality

As Life Hacker rightly states, a high price doesn’t always mean high quality. Here’s some top tips for spotting good quality shoes and clothing:

1. Spares for repairs — this is like a calling card from the designer. If the item comes with spare buttons, then the item is expected to last enough for it to require a button mend at some point!
2. Check the pattern matches at the seams — it’s the little things that are the biggest giveaway!
3. Look for gaps in the stitching — an item that will last will have no gaps between stitches on the seam, and also have more stitches per inch. Take a good look at those stitches!
4. Don’t look at the price tag — as mentioned before, this isn’t always an indicator or quality. People can, and will, charge good money for a poor product. Take a look at the item itself.
5. For clothes, scrunch them up a bit — take some of the material in your hand and ball it up for a few seconds, then let go. A good quality material will survive and the wrinkles will fall out. Cheap material will stay wrinkled and creased.

Leather ankle boots for example are versatile and can be used for range of occasions, so make sure to buy a quality pair to withstand all those wears! Divide its cost by the amount of times you think you’ll wear it and that will give you the cost per wear. If it’s something you’ll wear every day, definitely check the quality of the item! Remember, the ‘bargain’ comes in how many times you think you’ll wear the item. It’s always recommended to invest a little in timeless staples that can be mixed and matched for a variety of outfits.

Sources:

https://theecologist.org/2018/oct/30/fast-fashion-method-madness

https://lifehacker.com/cheap-clothes-are-too-expensive-buy-quality-instead-1751019637

https://fashionunited.uk/news/fashion/method-soap-brand-wants-to-clean-waste-in-fashion/2018101239428

http://www.wrap.org.uk/content/love-your-clothes-waste-prevention

https://www.independent.co.uk/life-style/fashion/environment-costs-fast-fashion-pollution-waste-sustainability-a8139386.html

https://www.itv.com/news/2018-10-31/britains-love-of-fast-fashion-is-harming-marine-life/

https://www.cbc.ca/news/canada/london/like-uber-for-clothes-stmnt-startup-fight-fast-fashion-closet-rentals-1.4902265

https://www.buzzfeed.com/alisoncaporimo/clothing-quality-clues?utm_term=.dewknndvZ#.jdqgLLJQ3

https://www.liveabout.com/how-to-spot-quality-clothing-1387970

For spontaneous spenders, the word “budgeting” can cause alarm bells, with the thought of having money left over at the end of the month seeming unattainable. People often think budgeting means having to cut back on the things that they enjoy. Being money smart doesn’t have to mean you miss out.

It was recently reported that in their lifetime, a British person will spend on average £144,000 on impulse shopping. This can include anything from the chocolate bar that you grab as you get to the till and other small purchases which soon add up, to regularly splashing out on new clothes.

There’s nothing wrong with treating yourself every once in a while, who doesn’t deserve a little retail therapy. However, if this is happening a little too often and you’re in need of looking after the pounds, there are a number of changes you can make.

The experts at PIWoP, a price drop alert tool, know how important the value is of every pound that you save. They offer five ways that people can create healthier spending habits and become money savvy.

1. Are you more attracted to the sale or the item?
   

   It can be tempting to pick up a product because the discount on it seems too good to miss, sometimes this appeals to consumers even more than the item itself. If this is the case, think about if you really need it, if it’s the money off label that’s caught your attention rather than the actual product, leave it on the shelf and save yourself money. That way, when you see something that you really want, even if it’s at full price, you’re more likely to have the extra money available to buy it.

2. Budget and prioritise
   

   Some expenses come out every month, write down what these are and then work out what you have left over. Then factor in things which are bound to occur, such as meeting friends for dinner or needing new school shoes for the kids. Prioritise these additional outgoings, certain things will need budgeting for, a weekly takeaway pizza is unfortunately not one of them! Cutting out spending that isn’t a priority could leave you with considerably more money at the end of the month.

3. Why are you spending?

   Treating yourself to a new outfit so you feel confident at an upcoming event or rewarding yourself after a lot of hard work is of course okay. However, if this happens on a regular basis and your bank account is suffering for it, it might be time to change your spending habits. Consider why you are spending and how productive it is. For example, if you spend when you are stressed or bored, there are other ways to blow off some steam that are considerably cheaper. Spending is often used as a short-term fix to feeling better, as soon as you remind yourself of this, you’ll be less tempted to overspend.

4. Do you need the item now?
   

   Finding a product that you really like or can imagine yourself needing for your next holiday or when the house is redecorated can make it easy to buy it right away. However, think about if you really need the item right now. If you’re moving house next year, although those lamps or expensive armchair might get you feeling excited, it might be better to wait for any upcoming end of season sales. Technology is helping consumers to do this by taking price comparison services one step further, such as the PIWoP tool. It allows consumers who have the tool installed on their computer, tablet or phone and see an item they like, to use it to enter the price they want to pay for it and the tool then alerts them if that item does go to or more likely below their PIWoP (Price I Want to Pay). Even waiting until the next day can make you realise that you don’t really need it, or that your money could be better spent elsewhere.

5. Set goals
   

   If you’re a real foodie who enjoys going out to eat, creating healthier spending habits doesn’t mean you have to stop doing what you enjoy. Or you might be interested in fashion and are eager to keep up with what’s new this season. Set yourself goals such as only eating at a restaurant one or two times a month (or however much you can afford without overspending) or allow yourself a couple of treats a month when it comes to clothes. Saving money while still allowing yourself a few luxuries will feel much more satisfying than regularly spending and then feeling stressed a few weeks after.

Executives from finance, marketing, sales, logistics, and other departments and business lines play an increasingly central role in the evaluation, purchase and use of technology solutions, according to a new report released by CompTIA, the world's leading technology association.

"CIOs and information technology (IT) teams remain involved in the process, as their expertise and experience are valued," said Carolyn April, senior director, industry analysis, CompTIA. "But business lines are clearly flexing their muscles. It's another strong signal that technology has shifted from a supporting function for business to a strategic asset."

Among the 675 US businesses surveyed for the CompTIA report "Considering the New IT Buyer", 45% said that ideas about technology come from different areas of the organization; and 36% said more executives are involved in the decision making. More than half of respondents (52%) used business unit budget to pay for technology purchases in the last year.

Lines of business are also staffing their departments with technology-oriented job roles, from data scientists and business analysts to software developers and social media managers. Executives cite the need for specialized skills, faster response times and better collaboration as some of the reasons why they are staffing up on technology-oriented job roles.

"This isn't a case of rogue IT running rampant or CIOs and their teams becoming obsolete," April said. "Rather, it signals that a tech-savvier workforce is populating business units and job roles."

In the CompTIA study, 21% of chief financial officers said they have dedicated technology roles in their department, including data scientists, business analysts and software developers. More than half have created hybrid positions that are partly technical- and partly business-focused.

Technical job roles in marketing department are also on the rise. Social media managers and digital marketing managers are the most often mentioned positions. Systems administrators, data analysts, web analytics specialists, marketing technologists, and database administrators also made the list.

Within logistics and sales teams, the most common tech-related job roles include project management specialists, data analysts and database administrators.

Much of what business lines are buying today are cloud-based software solutions, which can be self-provisioned quickly within a department. For that reason, technology vendors, distributors and channel partners need to package what they sell differently.

"They need to speak the language of business because this new generation of buyers doesn't want to hear about the technical implications of their purchases," April explained. "Channel partners need to position themselves as consultants and service providers who can help customers make informed decisions about what they buy."

(Source: CompTIA)