Head says, save for a deposit on a house. Think about it, mortgage lenders are requiring high deposits these days. We're back to the early 1980s when I used all my savings to pay a 20% deposit on my first flat - all £4000, that is. It was nearly four years on from that before I had not only saved up enough for a car, but felt I could also afford to run it. And then it was a 1.1 litre Fiesta L. (I loved that car!)
By the way, I was 28 when I bought the flat and nearly 32 when I bought Miranda.
Now, I guess even a 10% deposit is going to set you back over £10,000. But it's that or make a landlord rich for the rest of your life.
Smart money saves for the deposit on the house first. The house will probably not depreciate significantly, and it won't wear out either (though bits of it will). Once pays for all, because you'll recoup the deposit when you sell, and it will be the deposit on the next property.
Then you can start saving for the car. And make sure you can cover both your mortgage and the car payments.
But I know what your heart is saying. And it's true, once you've had a great-performing car, you won't want to trade down.
Rolfe.
