The lease on the second car ends in March, and unless something changes they will sign another in a showroom in twenty minutes. Nobody pays the sticker price. They pay £510 a month, and the question is what else is £510 a month.
Marcus and Jen. He is a sales director on a base plus commission; she works part time.. The households in these Shorts are illustrations built from typical UK figures, not real people, and every number below is worked on the household’s sheet.
What happened
There is a version of this story that ends in a showroom in May. The lease on the second car runs out on a Tuesday, and by Saturday Marcus and Jen have signed another one in 20 minutes, because the only question anyone put to them was whether they could manage the monthly payment. They could. That question is designed to be answered yes.
Rewind to October. Marcus is a sales director, paid a base salary with commission on top, and Jen works part time. They run two cars, and only one of them has ever been examined. The second car’s lease has five months left at £320 a month, and nobody in the house has yet asked whether there should be a second car at all once it ends.
When they added it up properly, the lease turned out not to be the cost. Insurance, fuel and parking came to another £190 a month, which put the real figure at £510, every month, for three years. Across a year that is £6,120. The £18,000 sticker price had never been the number that mattered, since nobody actually pays it; the monthly total was what would leave the account.
That changed the question. Whether they could afford £510 a month was never really in doubt. What mattered was what else that same sum could be. For this household it was the entire holiday envelope, or a third of the debt they were carrying, or the Quarter envelope that lets a weak commission quarter pass without alarm. Seen on its own, a monthly figure looks modest. Set beside the things it would push out, the second car was the largest financial decision they would make that year, and nothing about it was small.
So they ran a test before anyone went near a dealer. Starting in October, £510 went into an envelope called Second Car each month, as though the new lease had already begun. By March, either the envelope holds £1,530, three full payments, or it does not, and whichever it is, they will know whether the car fits their life before a salesperson asks them anything. The method is simple enough to borrow: work out the real monthly cost with everything included, put it next to whatever else costs that much each month, and carry it in an envelope for three months before signing.
The working
Every figure the Short says, and where it comes from on the household’s sheet.
| The Short says | Figures | Derivation |
|---|---|---|
| twenty minutes | showroom_minutes = 20 | on the sheet |
| five months left / three hundred and twenty a month | lease_months_left = 5; car2_lease = 320 | on the sheet |
| three hundred and twenty a month | car2_lease = 320 | on the sheet |
| five hundred and ten a month | car2_lease + car2_running | on the sheet |
| six thousand one hundred and twenty a year | car2_monthly * 12 | on the sheet |
| not eighteen thousand / five hundred and ten | car2_price = 18,000; car2_monthly = 510 | car2_monthly = car2_lease + car2_running |
| five hundred and ten | car2_monthly = 510 | car2_monthly = car2_lease + car2_running |
| fifteen hundred and thirty pounds | car2_monthly * 3 | on the sheet |
The turn
A monthly number only looks small on its own; next to what it displaces, the second car is the biggest decision they make this year.
The Short
Monday
- Monthly-ise it all in, name what else is that much a month, fund an envelope for three months before you sign.
In Zeroed
Marcus and Jen’s Second car envelope holds three payments by March: fifteen hundred and thirty. The date it started sits beside them.
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