Over 1 in 4 UK drivers under 55 spend as much or more on car finance payments each month as housing costs
Half of drivers do not worry about the total cost of a car when paying monthly finance payments knowing they will upgrade the car at the end
Over one in four (27%) UK drivers under 55 who bought their car on finance spend the same amount or more on payments as their rent or mortgage, compared to one in five (20%) over 55s. Men (27%) are more likely than women (22%) to do this.
According to the Opinium survey of 2,000 UK drivers, commissioned by InsuretheGap.com, an independent provider of GAP (Guaranteed Asset Protection) insurance for new and second-hand cars, drivers in Scotland (34%) and London (34%) drivers, who bought their car on finance, are the most likely out of any UK region to spend as much, or more, on car finance payments each month as their housing costs.
Over half of drivers (52%), who used finance to buy their car, said they did not worry about the total cost of the car as they prefer paying for it on a monthly basis, knowing they can upgrade the vehicle when their finance contract runs out (men 53% and women 50%). Those from the North West (58%) and West Midlands (56%) of England and those from Scotland (56%) are the most likely to agree with this.
Ben Wooltorton, Chief Operating Officer, InsuretheGap.com said: “Buying a car on finance is a convenient way to do it, but when it’s such a substantial chunk out of many drivers’ monthly income, care should be taken to protect this investment. Many drivers don’t realise that if a car is written off or stolen, the insurance company will usually only pay the market value of the car, not what was paid for it, so drivers could face a financial shortfall, particularly if they still have a finance agreement or loan to pay off. A GAP insurance policy from a specialist insurance provider, like InsuretheGap, can protect drivers from this.”
InsuretheGap.com’s policies start from just £97 and are significantly cheaper than those offered by car dealerships, and covering gaps up to £50,000. GAP policies can be purchased for cars, motorbikes and vans worth up to £50,000.