Is car ownership unaffordable?

[cactustwirly]

Many people who have challenged the £1 a mile cost are doing far higher mileage than average and keeping their cars longer than average.

In 2023, the average household spent £79 a week on transport, 90% of that was related to motoring. Based on average miles travelled this roughly equates to a cost per mile of £1.10 for cars/vans, 28p for rail, and 26p for buses. Assuming an average of 1.5 people per car trip, this brings the cost per person per mile for cars/vans to around 70p. Detailed data can be found in the Family Spending and National Travel surveys.

These costs exclude the cost of charging an EV and the tax paid on the benefit in kind of a company car.

Its notable that those in London spend considerably less on transport than those in other parts of the UK.

£1 a mile is a very excessive cost.
I would be spending £12,000 a year which is double what my car is worth which is crazy

 

[deltic]

£1 a mile is a very excessive cost.
I would be spending £12,000 a year which is double what my car is worth which is crazy

You drive about 50% more than average - the figure quoted is an average, lots of people will pay less lots more. It will be skewed by a high value cars

 

[61653 HTAFC]

You drive about 50% more than average - the figure quoted is an average, lots of people will pay less lots more. It will be skewed by a high value cars

What figures are you using here? If it's from insurers based on customers' estimated annual declarations, the figures will probably skew low. I guesstimated mine last year at 5,000 (after a time without a car) but I ended up doing just over 10,000.
Purely anecdotal, but when I was car searching (primarily on Auto trader) last year, most cars in my budget (<£5,000) and with my preferences (body type, manual gearbox, etc.) were close to or above the 100k mark. Your average of 6k per year would predict a larger quantity of 10-12 year old cars with around 60-80k on the clock. There were a few in that ballpark, and one or two low-mileage legends, but most were around 100k.

 

[Llanigraham]

You drive about 50% more than average - the figure quoted is an average, lots of people will pay less lots more. It will be skewed by a high value cars

Where are you getting the figure that 6k per annum is the average driven, as I can't find a figure anywhere near that? Most seem to be saying between 10 and 12k.

 

[En]

I'm always amazed how many expensive cars there are on the roads relative to average wage levels. A very ordinary car can cost £20-30k which is broadly equivalent to the average earner's annual take home pay. Then there are all the running costs on top of that. Now we no longer have children to ferry around I can't see us replacing our car when it eventually expires. Average running costs including depreciation are easily a £1 a mile, far cheaper and more convenient using public transport albeit we live in inner London.

becasue a lot of the idots running round in these premium cars are on PCPs they are effertively renting these vehicles for 3/4/5 years ...

that said it provides a ready source of 3 to5 year old cars for savvy people to buy after a lot of the depreciation has taken place

== Doublepost prevention - post automatically merged: 16 Nov 2024 ==

Where are you getting the figure that 6k per annum is the average driven, as I can't find a figure anywhere near that? Most seem to be saying between 10 and 12k.

10 -12 k has bee the recieved wisdom on 'average' mileage for many years preumably based on data from insurers / DVLA ( where mileage is given on transfer of keeper) and the MoT test database

 

[corfield]

I'm always amazed how many expensive cars there are on the roads relative to average wage levels. A very ordinary car can cost £20-30k which is broadly equivalent to the average earner's annual take home pay. Then there are all the running costs on top of that. Now we no longer have children to ferry around I can't see us replacing our car when it eventually expires. Average running costs including depreciation are easily a £1 a mile, far cheaper and more convenient using public transport albeit we live in inner London.

I think your calcs are skewed by a very subjective view of what cars are on the road, which isnt reality.

Average age of pax car is 10 years in the UK.

Latest UK figures from ACEA’s ‘Vehicles in use’ report show average age of 10 years

The number of passenger cars in use in the United Kingdom increased by just 0.8% between 2020 and 2021, with an average age of 10 years old, according to the latest figures from a recent report by European Automobile Manufacturers' Association (ACEA).

atfpro.co.uk

The average car travelled just 6,800 miles in 2020. That’s partly due to the coronavirus pandemic and an increase in home working; but even in 2019 it was still only 7,400 miles. For historic comparison, the average car in 2002 travelled 9,200 miles.

Diving deeper into the figures reveals that company cars travelled an average of 13,200 miles in 2020, while privately owned vehicles travelled 6,700 miles on average.

Figures from the RAC show that newer cars cover higher mileages. Cars up to three years old rack up an average of 10,400 miles a year and that’s split up into 12,500 miles a year for diesel cars, 9,400 for electric cars and 7,500 for petrol cars.

Used car mileage: UK average and how much is too much? | Carbuyer

We examine how many miles the average car does per year and explain why a low-mileage vehicle may not necessarily be the best

www.carbuyer.co.uk

Within that is huge variation as the article points out, a 5 year old BMW will be circa 100k miles (20/year), a fiesta 30k owing to the different types of people who buy them. Also noting the latter is more short duration engine cycles.

An average new purchase price is 35k, which after 10 years is say 10k.

The major expenses of car ownership in the UK are fuel (£1,435 per annum), motor insurance (£484 per annum), and repairs and servicing (£273 per annum).

The Ultimate List of Car Maintenance Statistics UK 2023 | Vehicle Contracts

Discover the essential 2023 UK car maintenance statistics with our comprehensive guide. Stay informed on the latest trends, costs, and habits influencing British drivers. Perfect for industry insiders and car owners alike.

www.vehiclecontracts.co.uk

So 2.5k purchase, 2.25k other costs. 4.75k £ vs 6.8k miles.

70p / mile. Bargain for point to point freedom.

For me its even better:
17k purchase price. 10 years old. 2.5k value.
350 insurance, 250 maintenance.
1100 fuel (8500 miles, av 50mpg - about £100 /month which is what I spend - mostly I do few longer distance trips walking locally)

So 1.5k purchase & 1.7k other costs per year.

37p per mile. Trivial for what that gives me.

Public transport? £106 advance for my old weekly route. I did that say 40 times a year. £4k and I’ve still got 15 miles to travel at the other end and not yet touched evenings, weekends or holidays and with the car, my fa ily travels for free with me.

becasue a lot of the idots running round in these premium cars are on PCPs they are effertively renting these vehicles for 3/4/5 years ...

that said it provides a ready source of 3 to5 year old cars for savvy people to buy after a lot of the depreciation has taken place

Had a look at PCP when considering a new one last year. It is quite literally insane and makes ‘bistromathmatics’ look sensible. They seem ripe to be the next financial scandal frankly.

But good point on picking up the pieces.

 

[43066]

Had a look at PCP when considering a new one last year. It is quite literally insane and makes ‘bistromathmatics’ look sensible. They seem ripe to be the next financial scandal frankly.

But good point on picking up the pieces

Someone upthread mentioned a zero % APR PCP deal, which seems like excellent value. I also doubt those will be around nowadays, or in the future, given interest rates.

 

[jfollows]

Someone upthread mentioned a zero % APR PCP deal, which seems like excellent value. I also doubt those will be around nowadays, or in the future, given interest rates.

Me, it was for a Mazda RX-8 ( https://en.wikipedia.org/wiki/Mazda_RX-8) which was discontinued a couple of years later, so perhaps had something to do with it. In any case, unlikely for most cars today I agree. After 3 years the residual payment to own the car was for more than the car was worth, so I gave it back. Nice car, though, I don’t do enough mileage to care about the mpg. 2008 when I got the car, by the way. In 2011 they were very keen for me to buy another one, but I bought an old 3L Jaguar instead with cash.

 

[corfield]

Someone upthread mentioned a zero % APR PCP deal, which seems like excellent value. I also doubt those will be around nowadays, or in the future, given interest rates.

A year ago I had to press hard to be told the interest rate when we discussed this, it was 10.5%! (Audi)

What startled me was the salespeople just couldn’t understand why I’d choose to buy it outright instead (although opted to get 5 more years out of existing instead as really, that’s far more sensible and I was just being a bit silly to want a new shiney one).

It’s like that scene from “The Big Short” where the financial guy interviews the estate agents pushing all the absurd pre 2008 deals and they are too stupid/blind to see the daftness of what they are doing. There’s me thinking these agents are cynical bstards, but no, they’re just idiots themselves who believe their own BS!

 

[SWT_USER]

PCP can work for people and there are (or were when I last looked but didn't proceed in the end) good deals to be had, particularly if you're flexible on choice of car and don't mind taking from dealer stock rather than choose your own.

 

[En]

Me, it was for a Mazda RX-8 ( https://en.wikipedia.org/wiki/Mazda_RX-8) which was discontinued a couple of years later, so perhaps had something to do with it. In any case, unlikely for most cars today I agree. After 3 years the residual payment to own the car was for more than the car was worth, so I gave it back. Nice car, though, I don’t do enough mileage to care about the mpg. 2008 when I got the car, by the way. In 2011 they were very keen for me to buy another one, but I bought an old 3L Jaguar instead with cash.

that was simply to get mugs to take RX-8s off their hands

 

[jfollows]

that was simply to get mugs to take RX-8s off their hands

Of course, but I like cars like these, I don’t even know what the “popular” cars look like. So it worked for me.
PCP seems like a good idea to me for people who know what they’re getting into. I’ve never touched it since, though.

 

[43066]

Of course, but I like cars like these, I don’t even know what the “popular” cars look like. So it worked for me.
PCP seems like a good idea to me for people who know what they’re getting into. I’ve never touched it since, though.

Interesting as those were, I don’t think many people bought more than one! Dreadfully thirsty and with a tendency for the engine to blow up, if I recall correctly!

 

[Oxfordblues]

I remember reading somewhere that at any given moment 96% of cars in the UK are stationary, mostly parked outside the owners' houses, retail facilities or places of work. I'd like to see more car-pools and sharing of cars, but most motorists seem to think that car ownership is an inherent right. In our street here in West Oxford the annual price of a permit is just £80, way below the market value of renting that piece of road.

We don't own a car, but live very close to three car rental companies if we should need one. Hertz for example is quoting £24 for a 24-hour hire. I think many people like to be seen driving a desirable car even though they could probably manage quite well without one.

 

[Llanigraham]

10 -12 k has bee the recieved wisdom on 'average' mileage for many years preumably based on data from insurers / DVLA ( where mileage is given on transfer of keeper) and the MoT test database

Quite, which is why I am intrigued to know where Deltic got his figure from.

 

[66701GBRF]

PCP is good for people that like to change cars every few years and have the hassle taken out of servicing and warranties etc. With regards to "ownership", it is correct that PCP you will never own the vehicle unless you pay the balloon payment at the end, but you also don't own under the classic HP until the final payment is made either and no one seems to have a problem with the way those are sold.

 

[deltic]

The Fleet News Running Costs Calculator has predicted running costs to lease a new car, including the cost of fuel, servicing and depreciation. You can choose the class of car (small/medium/large/SUV etc) to get a list of models and then click the heading in the table to sort by the cost in pence per mile.

The best selling cars in the UK at the moment are a Ford Puma and Kia Sportage. It doesn't list anything for a Ford Puma, but for 30000 miles in 3 years, you can get a Kia Sportage Estate 1.6T GDi 157 48V ISG 2 5dr for 63p/mile. The detailed listing is here

Most people don't buy brand new cars, and don't spend £1 a mile to run a car

The £1 is an average some will pay more, many less. There are plenty of cars listed in the link you provided that were well over a pound a mile.

 

[corfield]

I remember reading somewhere that at any given moment 96% of cars in the UK are stationary, mostly parked outside the owners' houses, retail facilities or places of work.

So stationary having been used for their purpose then. What’s the usage statistic for TVs? Hairdryers? Fish knives? Nice clothes? Jewellery?

I'd like to see more car-pools and sharing of cars, but most motorists seem to think that car ownership is an inherent right.

Err, are you saying it isn’t a right to have the personal means to travel about at your discretion? Cars have given more freedom to more people than any other technological invention or political creed.

Many were increasingly of the opinion that they'd all made a big mistake coming down from the trees in the first place, and some said that even the trees had been a bad move, and that no-one should ever have left the oceans.

Adams was spot on as always.

In our street here in West Oxford the annual price of a permit is just £80, way below the market value of renting that piece of road.

By definition that is the market rate of renting that road.

We don't own a car, but live very close to three car rental companies if we should need one. Hertz for example is quoting £24 for a 24-hour hire.

I so wish I could be like you. Sounds heavenly. Does the hertz one come with child seats? Bike rack? That’s the price for a family sized car of course, and not simply the smallest, shortest range thing they have right? It’ll be there for me at 10pm when I get a “dad taxi call” will it? I’ll have the time to make the bookings for every day when I decide to pop to the office, or the shop or the hospital? Because what I need in life of course is more admin to arrange travel for 100s of journeys where currently I dont have to do anything.

I think many people like to be seen driving a desirable car even though they could probably manage quite well without one.

I think many people like to generalise about and judge others whilst re-organising their existence for them; despite being nearly entirely ignorant of their lives. I kind of feel the world would be better if they didn’t.

The £1 is an average some will pay more, many less. There are plenty of cars listed in the link you provided that were well over a pound a mile.

And as proved, that isn’t representative of the uk car fleet is it, even if it does suit your prejudice of what you see.

It’s also irrelevent, because the rate gets better with more usage and conversely not using it would drive it through the roof. As a comparator to say public transport it’s not useful.

 

[jfollows]

Interesting as those were, I don’t think many people bought more than one! Dreadfully thirsty and with a tendency for the engine to blow up, if I recall correctly!

A bugger if you accidentally flooded the engine, and disaster if you didn’t give it a regular drink of oil but we’re getting off topic I guess; I had one as a company car then left the company and bought my own through PCP to replace it. So I guess I had two.

 

[Llanigraham]

PCP is good for people that like to change cars every few years and have the hassle taken out of servicing and warranties etc. With regards to "ownership", it is correct that PCP you will never own the vehicle unless you pay the balloon payment at the end, but you also don't own under the classic HP until the final payment is made either and no one seems to have a problem with the way those are sold.

When I bought our Niro I bought it on a PCP because I got a decent discount, even though I had the cash available, and then 3 months later asked for a settlement figure and paid it off.

 

[Bletchleyite]

PCP is good for people that like to change cars every few years and have the hassle taken out of servicing and warranties etc. With regards to "ownership", it is correct that PCP you will never own the vehicle unless you pay the balloon payment at the end, but you also don't own under the classic HP until the final payment is made either and no one seems to have a problem with the way those are sold.

The technicalities of HP are only relevant if you default on the loan. Otherwise, having completed paying it, you own a car. That is very, very different to PCP.

HP might be technically more like an Islamic mortgage, but in any practical sense it's just a secured loan.

 

[corfield]

The technicalities of HP are only relevant if you default on the loan. Otherwise, having completed paying it, you own a car. That is very, very different to PCP.

Quite. PCP is entirely iniquitous, designed to hook you into a lifetime of payments because you can never walk out with an asset.

It was staggering when I sat through this, all they wanted to know was the absolute maximum monthly payment I could manage. Deposit they wanted to reduce as much as possible. As I said, I had to press hard to be told the APR. This was an Audi dealer, not some dodgy outfit. At the desk next to me some chap signed up to it, monthly more than he said he could afford, with a “balloon” payment he had zero chance of ever saving for. Trapped forever. Utterly insane. It was a clear sign “if you cant but the thing, you cant wfford it, get a 2nd hand.

 

[Bletchleyite]

Quite. PCP is entirely iniquitous, designed to hook you into a lifetime of payments because you can never walk out with an asset.

It was staggering when I sat through this, all they wanted to know was the absolute maximum monthly payment I could manage. Deposit they wanted to reduce as much as possible. As I said, I had to press hard to be told the APR. This was an Audi dealer, not some dodgy outfit. At the desk next to me some chap signed up to it, monthly more than he said he could afford, with a “balloon” payment he had zero chance of ever saving for. Trapped forever. Utterly insane. It was a clear sign “if you cant but the thing, you cant wfford it, get a 2nd hand.

Or if you prefer lease it, which is just analogous to renting a home. That's a perfectly sensible option if you change cars often and treat them well, but doesn't contain the "ownership carrot" that PCP drags people in with.

 

[deltic]

The New Economics Foundation has just published a report paid for by Go-Ahead Group entitled "Trapped behind the wheel" which highlights the unaffordability for some people of car ownership and the fact that people are pushed into car dependency because of where new housing is being built and designed. It includes comparisons of the cost of car ownership against the cost of public transport in urban areas and sets out why new housing is so car dependent.

THE PROVISION OF PUBLIC TRANSPORT AND ACTIVE TRAVEL for new homes is affected by: • The insufficiency of Section 106 funds to cover the public transport needed, together with the lack of negotiating power for councils tends to see transport provision lose out in a trade-off against social housing, community facilities, and other items. • The use of large amounts of public funding on expensive road infrastructure alongside new developments, encouraged by a lack of advance transport planning and car-centred approaches. • The provision of public transport and active travel for new homes, which is affected by poor public transport and active travel provision in adjacent neighbourhoods, due to congestion and a lack of safe walking and cycling routes.

Copy of the report can be seen here https://neweconomics.org/uploads/files/NEF_Trapped-Behind-The-Wheel_Final.pdf

 

[Meerkat]

I remember going to one of those car warehouse places. They knew nothing about the cars (he couldn't even tell me the engine size!) and they didn't care what I needed/wanted - all they were interested was the maximum I could 'afford' and then they would sell me something that cost that much.
Its now a finance industry that is linked to cars, rather than a car sales business.

 

[The exile]

I remember reading somewhere that at any given moment 96% of cars in the UK are stationary, mostly parked outside the owners' houses, retail facilities or places of work.

The big problem being that the “active” times for most of them are very much the same.

 

[Meerkat]

The big problem being that the “active” times for most of them are very much the same.

And my car might not be active but it’s still doing something I want - storing my stuff.
I wouldn’t want to carry into work changes of clothes, shopping bags, umbrellas, presents etc that I might want on the way home. Nor stuff like a torch, emergency water/rations, waterproof etc for if there is a crash/breakdown.

 

[The exile]

And my car might not be active but it’s still doing something I want - storing my stuff.
I wouldn’t want to carry into work changes of clothes, shopping bags, umbrellas, presents etc that I might want on the way home. Nor stuff like a torch, emergency water/rations, waterproof etc for if there is a crash/breakdown.

Exactly - the advocates of “we’ll all move to communally owned self-driving pods” must all lead very simple lives…

 

[notverydeep]

The big problem being that the “active” times for most of them are very much the same.

Even peak utilisation of cars is pretty low. It is fairly easy to demonstrate this if you get the chance, by simply counting the number of cars parked near your home at 8:30 am or 17:30 and then comparing this with the number in the late evening for the same street or spaces…

 

[Ghostbus]

Exactly - the advocates of “we’ll all move to communally owned self-driving pods” must all lead very simple lives…

Or we're just more organised? Once I stopped being lazy, having multiple lesser umbrellas stored in assorted vehicles, backpacks and coat racks, I was able to reap the full benefits of owning a single full sized golf umbrella stored neatly by the door, seeing use only when genuinely needed. Amazing what a working knowledge of the UK climate and a daily forecast can do. Covers all scensrios, even chaos.

And there's genuinely no scenario of injury/collision I can foresee where I would need and could make use of a torch, water, food and changes of clothes, beyond that which I already had for the journey, but I somehow can't use my legs or mobile phone to ensure I survive. Seems not just unlikely, but totally contrived.

Even peak utilisation of cars is pretty low. It is fairly easy to demonstrate this if you get the chance, by simply counting the number of cars parked near your home at 8:30 am or 17:30 and then comparing this with the number in the late evening for the same street or spaces…

I'm not sure about that. There's plenty of residential streets around my way where the pavements are nose to tail at weekends and in the evening, but near empty during working hours. The only gaps are for driveways, where the second car of the household can usually be found sitting there doing nothing in working hours, save the school run.

I notice it because I often work shifts, so I'm often carrying handfuls of shopping down them at all times of day and night to fit around work. In working hours, you basically have to walk down the middle of the street, since the cars are parked half on half off the already quite narrow pavement (cracking every last paving stone).

While not exactly rich, these areas seem to be well off enough to afford two cars, with the second owner either working from home or not working at all. Some might even have a third vehicle specifically for work, although they might actually be using it as their second vehicle. Others clearly have a small car for a young adult. Notably, these are the streets where contractors are making big money converting front gardens into two car driveways.

It's quite incredible to see, especially since this is a suburban/urban area where bus stops are minutes away, buses are frequent and run well into the night, and there is no shortage of supermarkets, shops and amenities in comfortable walking distance for the able bodied and a bus ride for the rest.

These are the old style estates, where nice semi-detached housing was provided alongside services and green space, and it was assumed households would only ever be able to afford or even want one car at most. A family car. Generational living, where grandparents usually live just around the corner in the bungalows and looks after the kids after school

It was ironically perhaps too successful, given the reasons it no longer works? Although no doubt anti-social behaviour and crime also plays a role. It would be perfect for personal pod transport, replacing most if not all buses. People could still have one car for long trips and emergencies, and also have their front gardens back, while their kids could play in the street, and I could finally use that pavement in working hours. And online shopping would certainly be much cheaper and thus more widespread (the incremental gains of being able to park right outside any front door, legally).