Is car ownership unaffordable?

[stuu]

The first year is unaffordable. Because the first year is unaffordable, I never buy a car in the first place. The second year doesn't come because there is never the first year. So it remains unaffordable.

Are you confusing "costing more than you would be willing to pay", with "unaffordable"? Because even £1000 for insurance is ~£20 per week, which still isn't very much even for people on quite low incomes

 

[HSTEd]

Given a huge portion of UK households have access to at least one vehicle, I am not sure how it can be termed "unafforadble" - vast numbers of people clearly can afford them.

It is quite feasible to obtain an inexpensive car that is several years old and run it very cheaply. Indeed, the cost of running older cars is probably the lowest it has ever been in real terms, cars are far more reliable than they once were.

 

[Starmill]

Are you confusing "costing more than you would be willing to pay", with "unaffordable"? Because even £1000 for insurance is ~£20 per week, which still isn't very much even for people on quite low incomes

Even people on quite low incomes can sometimes access cheap credit through credit unions for example, if they're only asking to borrow about £1,000. Presumably some people take the attitude of "I refuse to spend even one penny on debt interest" but the fact remains that a £1k loan for a year is out there to most people who don't have a history of fraud conviction or civil judgements against them, meaning it actually is affordable if there is long term benefit in it. Sometimes people's family will lend them a few hundred pounds even if they themselves are of below average incomes too.

I reckon I'd save a packet if I just bought a car and made it my default choice for all non central London journeys. However, that's not my main objective of course.

 

[En]

Of course the fact that a private car isn't affordable to be has never changed. I can't afford a thousand in deprecation, insurance and parking every year. The fixed cost of car ownership a year is already about half a year of rail fare.

Even if I put the cheapest ULEZ-compliant fully depreciated car into insurance quotes, the results returned are at least a thousand.

So buying a car is a non-starter as it is too expensive. If the train fare is too expensive, hiring a car isn't an affordable option as well as it will cost around a hundred to hire and drive it for a day.

Driver age ?
experience ?
Postcode where the vehicle is being kept

'oldest ULEZ complaint vehicle' will be a mid 2000s petrol (euro 4)

what insurance cover are you looking for ( and not that in some case TPO oand TPFT can be more expensive now than Comp)
what occupation are you putting for the driver ? and what mileage + business / commuting / leisure split

I've been referred to the underwriter' a number of times in the past for wanting business cover once when working for a Warehousing company, another wjhen working for the Ambulance Service and the final time when working for a Fast food franchise -

when working for the warehouse company they wanted to know if I transported product , when it was explained that i was a TU rep, safety rept and a trainer as parto f my role needing to travle to our other sites was accepted without complaint

when working for the ambulance service 'did i respond in my own car ? - and if yes did i use Blues and twos when i did ? ' and ' did i ever carry patients in my own car ? '

when working for the fast food franchise - the initally agent didnt unerstand how the major fast food retailers work ( e.g. over 80 % of McDonald;s stores are operated by franchises) and then the underwriter wanted to know did i do deliveries - again the business mileage was so i could claim expenses if required to do to a different location than my base to work/ train , to go to (franchise) head office or the Brands; regional / national office or a training centre and also occasionally to take paperwork or stuff like unifom to another site )

 

[InkyScrolls]

The idea that private car ownership is unaffordable is patently absurd. Furthermore there are very many people, myself included, for whom it is most definitely not a luxury, but rather a necessity. Not everywhere is blessed with public transport to the same degree as London and the Southeast, something certain members (both of this house and of the Commons) are wont to forget.

 

[miklcct]

Driver age ?
experience ?
Postcode where the vehicle is being kept

'oldest ULEZ complaint vehicle' will be a mid 2000s petrol (euro 4)

what insurance cover are you looking for ( and not that in some case TPO oand TPFT can be more expensive now than Comp)
what occupation are you putting for the driver ? and what mileage + business / commuting / leisure split

I've been referred to the underwriter' a number of times in the past for wanting business cover once when working for a Warehousing company, another wjhen working for the Ambulance Service and the final time when working for a Fast food franchise -

when working for the warehouse company they wanted to know if I transported product , when it was explained that i was a TU rep, safety rept and a trainer as parto f my role needing to travle to our other sites was accepted without complaint

when working for the ambulance service 'did i respond in my own car ? - and if yes did i use Blues and twos when i did ? ' and ' did i ever carry patients in my own car ? '

when working for the fast food franchise - the initally agent didnt unerstand how the major fast food retailers work ( e.g. over 80 % of McDonald;s stores are operated by franchises) and then the underwriter wanted to know did i do deliveries - again the business mileage was so i could claim expenses if required to do to a different location than my base to work/ train , to go to (franchise) head office or the Brands; regional / national office or a training centre and also occasionally to take paperwork or stuff like unifom to another site )

31 years old, 5 years licence age, NW10 or NW2, no prior experience, about 15000 miles per year, software engineer in transport industry, third party only

 

[AndrewE]

Are you confusing "costing more than you would be willing to pay", with "unaffordable"? Because even £1000 for insurance is ~£20 per week, which still isn't very much even for people on quite low incomes

I had to read this twice to check I had understood it correctly.
I am sure that for quite a lot of the population finding £20 a week is impossible, let alone having the money for the initial purchase and taxing of a car.
https://www.theguardian.com/society/2024/oct/09/how-many-people-in-the-uk-are-in-hunger-and-hardship doesn't mention cars, however it does say

More than 9 million Britons vulnerable to reliance on food banks, research finds

but maybe you think feeding the family should be (or is) a lower priority than running a car?
Try googling "guardian uk poverty" and see if you want to stand by that assertion.

 

[stuu]

I had to read this twice to check I had understood it correctly.
I am sure that for quite a lot of the population finding £20 a week is impossible, let alone having the money for the initial purchase and taxing of a car.
https://www.theguardian.com/society/2024/oct/09/how-many-people-in-the-uk-are-in-hunger-and-hardship doesn't mention cars, however it does say

but maybe you think feeding the family should be (or is) a lower priority than running a car?
Try googling "guardian uk poverty" and see if you want to stand by that assertion.

No, you read it correctly. The vast majority of people are not in that position. Yes, there are too many people who struggle, but for say food banks, about 3% of the population use them

The numbers show that 78% of households have a car, which implies fairly heavily that they can afford it

 

[Bald Rick]

Not this old chestnut again.

Generally single people in London flat-share. Owning your own place is largely unaffordable. You really need two incomes unless yours is particularly high.

I know many single people in London who have their own place, and most of them are earning (roughly) average London salaries. Most of them also live in south east or north east London, in places that some people wouldn’t consider. (about half have their own car too)

I don't think that's actually true now. It probably was in 2019, though. There have been significant price rises since then.

Not sure about that. A friend of mine bought a nearly new VW Polo last weekend for £3k down and £200 month. Frankly that’s peanuts for that sort of car. To put it in context, his teenage son earns around £500 / month doing weekend shifts at a local garden centre.


Now, whilst history is a different country, I saved for about 4 years for my first car, which I bought when I was 18. That would be a £5k car now allowing for inflation, and I paid the equivalent of £1,300pa insurance. I paid for it all from having two evening jobs, working 4 evenings a week for about 15 hours. Obviously I didn’t have a mortgage to pay, as was living with parents. But I was far from the only person in my peer group doing something similar.

You just have to look around the roads to see that the majority of the population find it affordable to own a car, and a fair proportion of those who do not own a car do so out of choice, rather than affordability.

 

[61653 HTAFC]

I regard the initial outlay of £4000 and the £1700 pounds that I spent on motoring for the last year to be money well spent even though driving is always my third choice after train and bus.
The convenience of being able to move bulky/heavy objects and of being able to travel after the buses have stopped, and being able to take my bikes on holiday, is priceless.

As for hiring as an alterative to public transport you need public transport to get to the car hire office.

This.

The big advantage of owning a car is that you can travel at the times you choose. I got back on the road last year after going ten years without one, and I'd never go back unless I'm medically forced to. I still use the train for certain trips, but more often than not it's bustitutions (due to the route being upgraded) anyway.

Buses are mostly atrocious in my area, it was only a few years ago that the entire area was left with next to no services at all for weeks, due to a wildcat strike at the largest operator in the area. Now services are constantly being reduced or cancelled... and this is a PTE area too, so it's not as if there isn't a government agency charged with making sure things work as they should!

 

[thejuggler]

As I can afford a car its affordable for me, but I'm now at the point of wishing it was an expense I didn't have. MOT, 4 tyres and a service this month, plus the monthly amount I save so I can replace the vehicle at some point.

The current price of cars is however crazy. I was in the local Toyota dealership a couple of weeks ago and a year old Yaris with less than 10,000 miles (a car we paid £9,000 for in 2018) is now over £20,000, new models can be nudging £30k. How did that happen?

 

[Starmill]

I had to read this twice to check I had understood it correctly.
I am sure that for quite a lot of the population finding £20 a week is impossible, let alone having the money for the initial purchase and taxing of a car.
https://www.theguardian.com/society/2024/oct/09/how-many-people-in-the-uk-are-in-hunger-and-hardship doesn't mention cars, however it does say

but maybe you think feeding the family should be (or is) a lower priority than running a car?
Try googling "guardian uk poverty" and see if you want to stand by that assertion.

The people who are unfortunately in that situation are far too numerous I agree, and it's a stain on all of us that there are so many. However, those people won't be making any discretionary journeys whatsoever, either by public transport or otherwise, because they simply can't.

 

[Doctor Fegg]

I think @miklcct enjoys coming up with their complex public transport solutions. Because otherwise, they are probably the person on here who doesn't have a car that I would most recommend one to, particularly given that their journeys are often with a bicycle which is a royal pain when travelling by rail.

Nah, @miklcct just needs an Airnimal Chameleon. Goes fast, folds up.

Chameleon Performance | Airnimal

airnimal.co

 

[Bletchleyite]

The current price of cars is however crazy. I was in the local Toyota dealership a couple of weeks ago and a year old Yaris with less than 10,000 miles (a car we paid £9,000 for in 2018) is now over £20,000, new models can be nudging £30k. How did that happen?

The utter scam that is PCP, in short. These agreements just finance the depreciation and allow a far higher purchase price to be effectively hidden.

 

[43066]

Of course the fact that a private car isn't affordable to be has never changed. I can't afford a thousand in deprecation, insurance and parking every year. The fixed cost of car ownership a year is already about half a year of rail fare.

That sounds more like a decision you’ve made, rather than literally being unable to afford it. Based on earning more than £40k, paying £900 for rent, it should be possible to buy a cheap car and run it on a shoe string if you wish - or lease/buy a budget model on finance.

Equally I can understand why someone living in London wouldn’t bother - I did without a car for several years.

The utter scam that is PCP, in short. These agreements just finance the depreciation and allow a far higher purchase price to be effectively hidden.

Of course the other side of that coin is that, during a period of low interest rates, it allowed people to get into newer/more expensive/more prestigious car than they otherwise would have been able to afford.

It does seem like the bubble is finally bursting, though:

2024 half-time report – a disaster for private new car sales

This year has seen record lows in the number of private buyers choosing a new car. We explore what's going on in the new car market.

www.thecarexpert.co.uk

On the other hand, private new car sales are crumbling. The half-year results for private sales are the worst since the current twice-yearly registration plate change came into effect in 1999. Or, if you prefer, the worst sales results in more than a quarter of a century – with the obvious exception of 2020, when the UK was plunged into a sudden lockdown from March to May and almost no cars were sold. It’s bad news every month, and seemingly getting worse.

 

[Bletchleyite]

Of course the other side of that coin is that, during a period of low interest rates, it allowed people to get into newer/more expensive/more prestigious car than they otherwise would have been able to afford.

Yes, true. Low interest rates are harmful in many ways, they've perpetuated massive house price increases and they have, as you say, done so for cars too. Around 6% is probably where rates should naturally sit - that's hard for those who bought overpriced houses but over time inflation removes the pain.

It does seem like the bubble is finally bursting, though:

2024 half-time report – a disaster for private new car sales

This year has seen record lows in the number of private buyers choosing a new car. We explore what's going on in the new car market.

www.thecarexpert.co.uk

Good. New cars are presently overpriced by about a third, in some cases a half. A new Vauxhall Astra is presently around £40K - £20-25K is a reasonable price for the non-premium compact family hatch market. The market needs to crash - sadly, that'll probably likely be by way of the Chinese bringing in reasonably priced cars and the European manufacturers folding or being taken over by them.

 

[43066]

A new Vauxhall Astra is presently around £40K

That is absolutely crazy, especially when you look at what you can buy on the second hand market for that value…

 

[jfollows]

The utter scam that is PCP, in short. These agreements just finance the depreciation and allow a far higher purchase price to be effectively hidden.

90% of cars bought on finance, 75% of which is PCP, according to https://www.carbuyer.co.uk/news/302913/car-finance-and-the-pcp-deal-how-car-buying-went-into-credit (from 2020).
I used PCP once, it was 0% interest and the residual to buy the car was more than the car’s value, so I got out then.
I’ve owned a car since 1985, in one way or another. When I lived in Manchester M1 I had a company car, though, so no direct insurance cost then. Now two of us own one car and use it about once a week so it’s a luxury and a convenience but one we can afford given that our household income is greater than 90% of households. Our current car is actually paid for from a critical insurance payout some years ago.

 

[Bletchleyite]

That is absolutely crazy, especially when you look at what you can buy on the second hand market for that value…

It is. The depreciation is absolutely huge (used prices, now they've settled a bit, aren't that much higher than they were in 2019 given the inflation there's been) and it's PCPs that enable people to afford that, without them new prices would have to drop sharply.

PCP is a scam. It's in effect a form of leasing but sold as a form of ownership.

 

[43066]

It is. The depreciation is absolutely huge (used prices, now they've settled a bit, aren't that much higher than they were in 2019 given the inflation there's been) and it's PCPs that enable people to afford that, without them new prices would have to drop sharply.

PCP is a scam. It's in effect a form of leasing but sold as a form of ownership.

Looks like the £40k Astra is the electric/PHEV vehicle, the base spec petrol is around £25k.

Still, no thanks!

 

[cactustwirly]

An Annual season from Reading to London is £6000
That buys a car and pays for insurance and running costs easily.

You can buy a cheap runaround for £2000, insurance is £1000. That leaves £3000 for running costs.

The next year you have a car so can save even more money, plus the costs for discretionary travel will be marginal.

 

[43066]

An Annual season from Reading to London is £6000
That buys a car and pays for insurance and running costs easily.

It wouldn’t buy driving into London and back from Reading, and parking for the day in zone one several times per week, though, which is the journey people would use the season ticket for.

 

[Bald Rick]

A new Vauxhall Astra is presently around £40K - £20-25K is a reasonable price for the non-premium compact family hatch market.

Loads of brand new Astras listed in the £25k range. And thats before you do a deal.

 

[DarloRich]

Is car ownership unaffordable?

No - next question.

( go and buy a second hand car for cash. Easy. Cheap.)

PS - dont currently have a car . When I needed one I bought a second hand "banger" for cash. Ran it into the ground and got rid

PPS - not sure there are many bangers these days !

 

[En]

31 years old, 5 years licence age, NW10 or NW2, no prior experience, about 15000 miles per year, software engineer in transport industry, third party only

no experience and TPO both things underwriters don't like

NW 2 / NW 10 is part of that funny band that not central and not the leafy suburbs aren;t the post codes in question Acton / park royal /Alpeton / Willesden / Neasden / out towards Wembley ...

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That is absolutely crazy, especially when you look at what you can buy on the second hand market for that value…

the RRP for an Astra is 23 to 43 k bearing in mind that cars like the Astra and Focus now occupy a postion that 30 -40 years ago would be considered the class above ( i.e. Vectra and Mondeo territory - the mondeo has been huge for couple of generatiosn and the last GM engineered Vectra was also sold as a Commodore by Holden )
it;s easy for peopel to think that the Astra is a 35 - 45 k car if they con on the configurator for the EV or pHEV as it appears stellantis in the UK is only selling the electric and PHEV Astra is the top 2 or 3 specification levels
also you have ot consider the wider placement of Vauxhall / Opel in the Stellantis brand family which considering you have the PSA brands, Vauxhall/ Opel and now Fiat brands means that Stellantis are aiming , whether they achieve, it at a different niche than 'mass market and fleet' with vauxhall

== Doublepost prevention - post automatically merged: 14 Nov 2024 ==

As a single person on an average wage, I couldn't afford to run a car and pay a mortgage and have a social life.

And I don't live in London or the South East.

define average wage here
in the midlands or the North a wage of mid £30ks is really quite liveable assuming that , asa single person, you live in a smallish property ( studio / one bed in cities , one or two bed in towns and rural areas)

 

[BingMan]

As I can afford a car its affordable for me, but I'm now at the point of wishing it was an expense I didn't have. MOT, 4 tyres and a service this month, plus the monthly amount I save so I can replace the vehicle at some point.

The current price of cars is however crazy. I was in the local Toyota dealership a couple of weeks ago and a year old Yaris with less than 10,000 miles (a car we paid £9,000 for in 2018) is now over £20,000, new models can be nudging £30k. How did that happen?

Yet a ten year old Yaris with 50K miles can be had for £4K.

 

[yorksrob]

define average wage here
in the midlands or the North a wage of mid £30ks is really quite liveable assuming that , asa single person, you live in a smallish property ( studio / one bed in cities , one or two bed in towns and rural areas)

Mid 30's - which is around the national average.

The point is, it is liveable to me - without the expense of running a car.

 

[bspahh]

The current price of cars is however crazy. I was in the local Toyota dealership a couple of weeks ago and a year old Yaris with less than 10,000 miles (a car we paid £9,000 for in 2018) is now over £20,000, new models can be nudging £30k. How did that happen?

You can get a 2023 Yaris with up to 10k miles from a dealer for £16-17k on AutoTrader. Some dealers will be more expensive, or they might have been a higher specification.

 

[RailWonderer]

PCP is a scam. It's in effect a form of leasing but sold as a form of ownership.

I don't think anybody expects to own it after the three years are up. Rather than pay a balloon lump sum payment, they happily give the keys back for a newer car, that's why the majority of 'buyers' do it. You pay a premium to let the dealer swallow the depreciation rather than own a depreciating asset yourself. It's wise in a sense.

 

[Bletchleyite]

I don't think anybody expects to own it after the three years are up. Rather than pay a balloon lump sum payment, they happily give the keys back for a newer car, that's why the majority of 'buyers' do it.

Except you then have to put more money in for a deposit, as only if you're lucky do you have a decent chunk of value left over. That's one of the big lies behind it, it creates an expectation you'll get a decent amount left in the guaranteed future value and you very often won't, e.g. you'll need to pay hefty penalties for going over on mileage or for even relatively minor damage.

You pay a premium to let the dealer swallow the depreciation rather than own a depreciating asset yourself. It's wise in a sense.

You don't. You finance the depreciation. They aren't going to be nice and pay it for you!

In any case if you know you will return it you're better off leasing. PCP is just a form of lease where the cost of buying it at the end is agreed at the start, effectively, but as a result of that it often if not always costs more than an actual lease.