According to a new study
Leading provider of short term car leases, Cars on Demand, carried out a survey of 2,500 car buyers to discover the affordability of new cars, and how much of their income Brits actually spend on them. In order to calculate how much we can afford to spend on a new car; experts believe that we should budget around 20 to 25 per cent of our annual income. Interestingly, the results found that Brits were actually spending 27.5 per cent of their income, which means that each new car buyer spends on average £1,154.37 more than what they can actually afford.
- The Northern Irish overspend more than the rest of the UK at 38.8 per cent of their annual income.
- Almost one third of Brits admit to overspending due to their emotions.
- 42 per cent of people say they could not afford any unexpected repairs.
The results varied when broken down by region. Firstly, there was one region where getting a good deal was clearly more important than getting a new car. The West Midlands is the only region where new car buyers spend less than what the experts agreed people should budget. They shell out just 22.3 per cent of their income (or £38.37 less than recommended) – well, they probably realised that if you look after the pennies, the pounds will look after themselves…
And when it comes to splashing out the most, Northern Ireland is the most indulgent region. They spend a whopping 38.8% of their annual salary on a new car, which is on average £3,429.59 more than what they should spend.
To see how the rest of the UK stacks up:
Source: Cars on Demand
Unsurprisingly, with such a lot of money being handed over for the car itself, the survey found that when it comes to budgeting for any unexpected repairs (which doesn’t include using credit cards or bank loans), nearly half of Brits (42.6 per cent) said they would struggle to do so. The survey also found that on average we spend just over three quarters of an hour (45.1 minutes) deciding how to finance a brand new car. At least it’s not an impulse decision, and we actually think carefully about how we can do it before parting with a significant amount of money!
However, it seems that emotions do still get in the way and influence us more than they should: nearly a third of us (30.3 per cent) admit that our emotions cause us to spend more money than what we can afford – perhaps we’re lured by the sales patter, as well as the Bluetooth connectivity and new car smell… This, also, is perhaps one of the few occasions that men will confess to getting emotional, as 57.9 per cent of those were men.
“A car is clearly a very personal purchase,” said Paul Brown, MD of Cars on Demand, “and it’s interesting to see how much more we’re willing to spend on a new one. It’s one of the biggest purchases we’ll make, so it’s perhaps no wonder we want to invest in a good one!”