Halifax Unsecured Personal Loan's annual review of the cost of motoring reveals that last year, drivers in the UK paid out £36.5 billion on purchasing new and used cars. This amounts to 4.4% of the total household disposable income, equating to an average of £1509.67 per household per year1.
This represents a £11.1billion rise from 1996 where the total amount spent was £25.4 billion with an average spend per household of £1104.282.
Highlights of the Halifax Unsecured personal Loan's research show:
•In real terms (i.e. accounting for price inflation) spending on motor vehicles has increased by 28% over the last 10 years
•Prices of cars and associated products have fallen by 26% over the last 10 years
•4x43 vehicles have depreciated by an average of 34% over the past 2 years
•The number of cars on the road is now close to 31 million5
•Behind debt consolidation, buying new and used cars is the most common reason for people to take out an unsecured personal loa
We may be spending more, but we are getting more for our money… Over the past 10 years, according to Halifax Unsecured Personal Loans research, spending on motor vehicles has increased in real terms by 28%. However, we are now getting more for our hard earned money too as prices in general have decreased by 26%.
The number of cars on the road has significantly increased in the last 10 years...
There were nearly 26 million cars on the road in 1996. This has increased by 22% and the number of cars in Britain is now just under 31 million. This equates to ownership of 1.13 cars in 1996 and 1.28 cars in 2006. Statistics6 also show that typically, used cars are changed every 4 years with this reducing to three years when the car is more than 10 years old.
4x4's depreciating significantly faster than other vehicle sectors … New research shows that 4x4 vehicles registered three years ago have lost on average 34% of its value over the last two years, compared with just over 20% for a supermini car3. This reflects both the increasing financial burden and adverse consumer perception associated with owning a 4x4.4
More men than women use an unsecured personal loan to buy a car… Annual research by Halifax Unsecured Personal Loans revealed that buying a car is the second most popular reason for taking out a loan after debt consolidation. Over one in four loans (26%) taken by men are for motoring purposes, compared to one in seven for women. Typically, four in ten (40%) of car loans are for new cars.
Keeping the cost of motoring down…
Although we spend time choosing the right vehicle we often fail to shop around for the best financial deal. Would-be car owners need to decide which finance option best suits them. When buying a new or used car there can are often additional costs involved such as insurance, tax or MOT. With a Halifax Unsecured Personal loan you don't have to make any repayments for the first three months which allows you time to cover such costs.
Halifax unsecured personal loans feature:
•No repayments for the first three months of the loan
•Option to spread payments over one to seven years
•Fixed monthly payments, making budgeting easier
•A fixed rate that is tailored to your individual circumstances and needs
•Typical APR of 6.9% on loans over £7000.00 via: http://www.halifax.co.uk/loans/personalloans.shtml
Neil Chandler, head of Halifax Unsecured Personal Loans comments:
"For most people buying a car is one of the biggest financial commitments we make, accounting for between four and five percent of household income. It's important people shop around and find the best deal for them or these costs could soon mount up and place a strain on your finances."
Other car facts:
•A quarter of all cars on the road are less than four years old5
•The average age of cars in GB is 6.8 years5
•The most common car colour is blue, accounting for nearly a quarter (24%) of all cars on the UK's roads5
•Cars account for nearly 12% of Britain’s man-made CO2 emissions7
•In the last six years the number of new diesel cars registered has grown by 187%5
•During 2005-6, the average household spent £27.90 a week on fuelling, servicing and repairing their vehicle according to ONS data1