Cheap finance deals convincing Brits to spend £1,000 a year more than they can afford on new car payments

6

BRITS are spending £1,000 more a year than they can afford on new cars, according to a new study.

Cheap finance deals are convincing drivers to stretch budgets and monthly payments beyond what they should.

 Brits are signing up for deals they can't afford

Getty – Contributor
Brits are signing up for deals they can’t afford

Research by leasing company Cars on Demand found British buyers are spending 28 per cent of their salary on cars.

But really they should only budget between 20-25 per cent of annual incomes on a motor.

It means motorists can’t afford to pay for unexpected repairs without loading up credit cards or taking out bank loans.

Cars on Demand said drivers are being lured in by the sales patter of dealers as well as gadgets like Bluetooth.

And the chronic overspending on cars is causing a debt crisis.

According to the data, drivers in Northern Ireland are the worst with 39 per cent of income ploughed into new cars – £3,429 extra a year.

 Map shows where drivers spend more they should on new cars

Map shows where drivers spend more they should on new cars

By comparison, buyers in the West Midlands are the most budget conscious spending £38 less on cars than they can – the only budget conscious region.

Even more worrying is that drivers spend just 45 minutes deciding how to finance a brand new car – despite the fact it’ll cost you thousands over several years.

It’s the latest warning raised about car finance with many experts predicting a huge mis-selling scandal on the horizon.

An exclusive investigation by The Sun found salesman were flogging flashy motors to ‘jobless’ punters and telling them to lie to get credit.


NEW WHEELS How to finance your new car – Hire Purchase and Personal Contract Purchase explained in our handy guide


And cars worth £20,000 are offered without deposits with buyers locked into monthly payments for up to four years.

Paul Brown, MD of Cars on Demand, said: “A car is clearly a very personal purchase 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.”

Car buyer’s info

DIESEL BOOM

Best new diesel cars on sale NOW – and they’re cleaner than you might think

SWITCHED ON

The top five electric cars you can buy right now – from a budget city runaround to a long-distance cruiser

TOP OF THE CLASS

The best sports cars for any budget – from a Mazda for £229 a month to a £150,000 McLaren

NEW WHEELS

Motorist’s guide on how to finance your new car – from Hire Purchase to Personal Contract Purchase

are you in-sure?

Uncertain about the right insurance policy for your car? See which is best for you and what affects cost

CRASH COURSE

Car insurance trick that can slash your premium by nearly HALF plus five ways to get the best deal

SHARE

LEAVE A REPLY

Please enter your comment!
Please enter your name here