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Brits to Spend £108 Billion on Cars in 2017

By Kyle Lindsay
Tuesday, February 28, 2017 - 15:02

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With excitement revving up for the release of ‘17’ number plates on 1 March, buying a car is a significant purchase. A new study from American Express® has found that 19% of adults will spend an average of £11,094 buying a brand new or second hand car this year, equating to a bumper £1081 billion across the UK as a whole.

In addition, it’s not just the outlay for the purchase to consider as the research reveals that drivers will spend an average of £1,492 per car this year on running costs.

Buying a new car

London tops the table for splashing out the most on a new or second hand motor at £14,557 each, followed by the East Midlands (£13,831) and Scotland (£13,191). Welsh and Northern Irish motorists plan to keep their spending at four figures, budgeting £9,282 and £8,842 respectively. 

Top five regions for expenditure on new and second hand cars:

Regions

Average cost of purchasing a new / second hand car

London

£14,557

East Midlands

£13,831

Scotland

£13,191

North East

£12,591

South East

£10,373

 The cost of running a car

Running costs remain front and centre of consumers’ minds when it comes to deciding whether to purchase a new or second hand car. Almost seven in ten (68%) of those surveyed cite this as the main consideration ahead of efficiency (53%) and comfort (46%).

The associated annual costs of running a car include:

Associated annual costs of running a car

Average spend per car

Fuel

£461

Insurance

£311

Maintenance e.g. service / MOT

£222

Tyres

£142

Road side assistance

£80

Additional parking fees

£64

Washing/valeting

£63

Parking permits

£55

Windscreen repairs

£49

Accessories e.g. new stereo, air fresheners

£45

Jenny Cheung, Director at American Express says, “For many, owning a car means freedom. While this freedom can come at a cost, there are some savvy ways to manage the finances linked to buying and running a car. By putting car related expenses on a credit or charge card that offers rewards or cashback, you can get something back on your spending, which means you can treat yourself later in the year.”

American Express finance tips

Think outside your local area – while popping down to your local car dealership might seem like the easiest option, it is always worth broadening your search further afield to make sure you are paying the best price for your new wheels.

Think about the future – Before you start browsing the forecourts think about what you really need from a new car. There’s no point buying a two-seater convertible if you’re thinking about starting a family, so work out what is realistic.

Set a budget – While many Brits balance the books before buying a car itself, it’s also important to consider the financial commitment that continues after you’ve driven out of the dealership.

Setting a monthly budget for those regular costs such as fuel, road tax and toll payments can help put the brakes on any overspending.

Credit Card - American Express

 Shop around – Whether you’re purchasing insurance or booking a service, make sure you shop around for the best deals and choose the option most suited to your circumstances.

For instance, if you will only be occasionally driving, pay as you go insurance might be a better fit, whereas families who have adult children behind the wheel can make savings by taking out multi-car policies.

Be savvy when spending – If you are budgeting for car costs this year; remember to get something back by putting costs on a card which offers rewards or cashback.

For instance, the American Express Preferred Rewards Gold Card offers new Cardmembers 20,000 Membership Rewards® points on £2,000 of spend in the first three months which could get you a return flight from London to over 100 destinations or a £100 Gift Card to spend at over 20 eligible retailers.

While the American Express Platinum Cashback Credit Card offers 5% cashback up to £125 in the first three months. 

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