Car costs catch Brits out

While many households may consider a family car a ‘necessity’ of modern day life, new research from the Money Advice Service has shown that 56% of UK motorists say the running costs of their second hand car are higher than expected, and almost a quarter (23%) say that unexpected car bills have had a big impact on their household finances in the past year.
 
A further one in five (20%) drivers say they have even fallen into debt to pay for unexpected car bills covering repairs and maintenance. Furthermore the unforeseen costs of owning a second hand car causes 39% of owners to worry about how they will pay for an unexpected car bill.
 
Of those who found car costs to be higher than expected:
 
31% have had to cut back on family treats
16% have had to delay household repairs or replacing household items
12% have had difficulty meeting key household costs such as bills, food and rent
9% have had to cancel a family holiday
 
If you don’t ask, you don’t get
 
Many are falling at the first hurdle by spending more than they planned to on their car, with 18% saying they went over-budget. The average overspend amongst this group is £1,815 with the main reason being that buyers simply ‘really liked the car’.
 
But 80% of respondents negotiated the cost of their car – with 64% successfully getting a discount as a result. Men were more likely to haggle than women (83% vs. 76%), and were also better at obtaining a discount (67% vs. 60%).
 
Think before you drive away

Many UK motorists gave little consideration to the total running costs of their car. Thirty-eight per cent gave no thought to depreciation, whilst 28% did not consider the costs of MOTs, and 16% had not considered car tax. Many were caught out with other costs that were higher than expected:
 
26% said fuel costs were higher than expected (rising to 40% for 18-24 year olds)

26% found maintenance costs to be higher than expected (rising to 41% for 18-24 year olds)

23% found insurance costs to be higher than expected (rising to 46% for 18-24 year olds
 
Regrets on the road
 
Over a quarter (26%) said that they had regrets about the last car they purchased. A quarter (24%) said it was an ‘impulse purchase’ and 24% said they should have looked more carefully into maintenance costs. One in five (21%) admitted they paid too much for the car.
 
In order to give UK motorists the insight they need on car costs and ensure they don’t make a purchase they can’t afford, the Money Advice Service has launched a new ‘Car Costs Calculator – a handy tool which helps motorists compare the annual costs of running different cars before they make a final purchase. The tool can be found at moneyadviceservice.org.uk/car-costs-calculator and gives potential car buyers model-specific details. The total running costs are broken down by:
 
Fuel costs
Service and maintenance costs
Tax costs
Insurance
Depreciation
 
Responding to the findings, Nick Hill, a money expert at the Money Advice Service, says: “For many of us a car is essential for getting about in our day-to-day lives. It’s very easy to focus on the purchase price, but figuring out the running costs can be tricky as there is a lot more to consider than miles per gallon.

“The Money Advice Service Car Costs Calculator helps compare these costs and could not be easier to use! Find your second hand car, type in the number plate, and we’ll show you how much the car will cost to tax, fuel, and insure, as well as how much it could depreciate by. 
 
“Owning a car is a big expense, so I’d urge anyone planning on buying a car to not only set a budget for the initial cost, but to also look at total affordability and do their research in terms of what it’s going to cost them to run, repair and maintain over the long term – you might be pleasantly surprised by how much you can save when you have all these figures to hand!”
 
Quentin Willson, Motoring Expert adds: “An alarming 26% of consumers are regretting their decisions because of not doing proper research before taking the plunge with buying a car. The new Money Advice Service Car Costs Calculator now means all you ever need to know about the cost of running a car are now all in one place, so there is no longer an excuse for getting your sums wrong."