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Got a new motor? No chance…
Average car buyer’s budget is £8,211
Only a quarter of people buying brand new cars
Almost half saving money upfront to avoid borrowing
Some savings still being overlooked
High motoring costs are driving people to economise on car buying, according to RAC Financial Services , which has found the average car buyer’s budget is just £8,211.
When spending their own money, almost two thirds (64%) of people intend to buy a pre-owned car. Just 24 per cent will opt for a brand new car and only 26 per cent will pay over £10,000. Those buying their first car will spend an average of ‘just’ £3,400.
Buyers are also cautious in financing their car, with 41 per cent saving the money and a quarter (26%) borrowing, the majority (60%) opting for personal loans.
Financial experts at RAC believe people are having to make adjustments on price to balance the amount running their car takes from their overall household budget.
RAC Financial Services spokesman, Philip Hale, said: “In real terms, cars are cheaper to buy and better equipped than ever, but daily running bills are creeping up. The average car costs £5,300 a year to run, including £1,000 in fuel and these costs don’t reduce significantly with the age of a car. People need to accommodate this – for many, running a car can be as expensive as buying one.”
However, RAC Financial Services also found many people are still ignoring potential savings – only 27 per cent of buyers are looking for a more fuel-efficient vehicle and just seven per cent are switching cars to reduce their insurance premiums, or take advantage of cars that run on alternative fuels. Further, only 18 per cent were prepared to haggle a deal with a vendor.
“Most people are still not aware of the savings they can make against high running costs. Opting for smaller cars, negotiating a good purchase price, getting several quotes for finance options and insurance and even seeking out the cheapest places to fill up can all reduce your costs in the long run”, concluded Hale.
Other key findings in the survey were:
The greatest buying activity is for mid range cars priced between £5,000 and £10,000, accounting for 47 per cent of intended car purchases through the first six months of 2005.
Women’s spending on cars on par with that of men (£7,998 for women versus £8,385 for men).
Men are almost three times more likely to be buying a faster car (11% versus 4%) whilst 23 per cent of women are buying a roomier car compared to just 14 per cent of men.
Buyers in Wales are most likely to get a loan to buy their car, Midlands buyers are most likely to save and buyers in North West England most likely to buy a car through a finance agreement.
Londoners spend most (average: £10,053), while Midlanders pay least (average: £6,260)
33 per cent of young drivers (age 17-20) buy a car on style and image alone.
An average of £3,400 is spent on a first car, with almost half of young drivers (48%) buying it themselves and only 19 per cent relying solely on parents.
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