Belfast Telegraph

Thursday 24 July 2014

56% 'underestimated car expense'

Most people who bought a second-hand car in the last two years found it more expensive to run than they expected

More than half of people who have bought a second-hand car in the last two years have found it more expensive to run than they expected, according to a Government-backed body.

Some 56% of motorists said that total cost, including maintenance, repairs, insurance and fuel had turned out to be higher than anticipated and one in five drivers (20%) have resorted to going into debt just to keep their vehicle on the road, the Money Advice Service (MAS) found.

One in four (26%) of the 3,000 people surveyed who have bought a second-hand car since 2012 now has regrets about their purchase, with many of them saying they had not worked out whether it was really affordable or that the purchase price was too much in the first place.

Of those drivers who have found their car running costs to be higher than they had initially thought, nearly one third (31%) have had to cut back on family treats to make up the shortfall, one in six (16%) have been forced to delay repairs that needed doing in their house and one in eight (12%) have struggled to meet key household bills such as food and rent in order to keep their car going.

The MAS, which is an independent body set up by Government to offer money tips, has launched a new online "car costs calculator" to help motorists to shop around for a car that suits their budget. The calculator will enable people to compare the overall annual expense of running different car models before they make their final purchase. Up to three cars can be compared at the same time.

The tool, which can be found at moneyadviceservice.org.uk/car-costs-calculator, allows people to type in the number plate of the car they are considering buying and it will then indicate how expensive the car will be to tax, fuel and insure, as well as how its value is likely to depreciate.

Researchers found that many people are "falling at the first hurdle" when buying a car, with nearly one in five (18%) saying they had typically gone over budget when they first made their purchase, to the tune of £1,815 typically.

Drivers in Scotland and North East England were more likely to have set themselves a realistic budget for the overall cost of running their car, with just under half (49%) of people in both of these places saying their running costs were more than expected.

In Wales, this figure was broadly similar to the UK average, at 55%, and in Northern Ireland it was higher than average, at 61%.

Londoners were the most likely to have underestimated their costs, with 73% of people there saying they had surged to higher-than-expected levels.

Younger drivers are also generally much more likely to have been over-optimistic about the overall cost of running their car, the research suggests.

While 26% of motorists said the fuel costs for their car had turned out to be higher than expected, this increased to 40% of 18 to 24-year-olds.

Around 41% of those in the 18 to 24 age group also found the cost of maintaining their car to be more than they expected, a figure which was 26% for drivers generally.

Younger drivers were twice as likely to say their car insurance had turned out to be more costly than expected, with 46% of 18 to 24-year-olds saying this compared with 23% of people generally.

Nick Hill, a money expert at the MAS, said: "I'd urge anyone planning on buying a car not only to 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."

Here are the percentages of drivers around the UK who said the overall cost of running their car had been higher than expected according to the MAS:

:: Scotland, 49%

:: Northern Ireland, 61%

:: Wales, 55%

:: East of England, 51%

:: East Midlands, 54%

:: London, 73%

:: North East, 49%

:: North West, 56%

:: South East, 53%

:: South West, 55%

:: West Midlands, 58%

:: Yorkshire and the Humber, 55%

:: UK, 56%

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