Without a car, holding a down a particular type of job would be impossible, as would being able to visit friends and family. Doing a big food shop becomes problematic if you’re reliant on public transport, and depending on your location, even popping out for a pint of milk may require your own private vehicle. But how much do we spend on having our own cars and how do we pay for them?
Here at Insurethegap.com we surveyed 2000 drivers on the cost of motoring and the results were both interesting and unexpected.
57% of you told us that after housing owning a car is their second biggest expense (this number increases to 62% for under 35s). And 20% of under 35s revealed they spend as much on their car’s monthly payments as they do on their rent. Not surprising when you consider that monthly finance deals for a brand-new Volkswagen Golf SV* start from around £352, or £320 for a new Ford Fiesta 1.6**
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In terms of financing your cars, one in five of you said your preference is to stick to a budget and pay for your car on a monthly basis, instead of worrying about the total cost. This is knowing you will then upgrade to a newer model when the finance contract runs out. 40% of 25 to 34 year olds are most likely to finance their cars this way. In contrast, over 55s were the least likely to do this with only 18% of 55-64 year olds saying they finance their cars in this way.
When we then look at which regions in the U.K. are most likely to choose this finance option, the top three were Scotland, the North East and London. However, close to half of you who responded (47%) said they always buy their car outright and would never use finance.
Overall, it’s clear that the younger demographic is more comfortable using finance options to own the latest models, taking a mobile phone-type approach to car ownership; have the latest one for a limited period of time before upgrading when a newer one is released. The older generation are much more inclined to take a more long-sighted view and look to hold onto their asset for a number of years before thinking of changing.
* 47 monthly payments of £225 plus the initial deposit of £5958, amounting to approx. £352 pcm.
** 48 monthly payments of £299 plus the initial deposit of £999, amounting to approx. £320 pcm.