More than 2.8million Britons have been forced to sell their cars to cope with cost-of-living crisis pressures, a study has claimed.
According to a new survey from Motorway, 11 per cent of Brits have been forced to sell their precious motors because spiraling energy, rent, food and, car costs such as MOTs and petrol.
The Bank of England has raised interest rates for the 14th consecutive time to 5.25 per cent.
Motorway said this demonstrated that inflationary pressures are refusing to budge.
Almost one in five owners aged 25-34 are selling their vehicle as a result, which is the highest of any age group.
More than 2.8million Britons have been forced to sell their cars to cope with cost-of-living crisis pressures
But, the research also suggests that 41 per cent of Brits have no idea how much their car is worth, highlighting the opportunities the nation is missing out on, by not investigating the true value of selling their car.
In the first quarter of 2023, Britain’s used car market saw the biggest increase in value for three years.
Led by a combination of chip shortages and geopolitical factors, significant supply chain issues in the automotive industry caused used-car prices to increase by almost a third – or more than £4,000 – since 2020.
Motorway has unveiled its free Car Value Tracker, an innovative tool allowing motorists to see the most accurate value of their car at present and over the past two years, giving the power back to consumers when determining the right time to sell.
You can try the Car Value Tracker here or get your car’s value using the calculator above.
Alex Buttle, co-founder of Motorway, said: ‘One of the biggest mistakes car owners make when selling their car, is simply not knowing how much their car is worth. Previously, a car’s value almost always followed a downward trend, but over the past three years, the industry has experienced unprecedented changes.’
Mr Buttle said that just like a homeowner would conduct DIY jobs before selling, there are a few quick fixes car owners could be carrying out, to get the best price for their car.
To start, car sellers should give their car a thorough clean, inside, and out. The better the car looks, the easier it will be for a dealer to imagine the car sitting on their forecourt.
‘Replacing worn-out components is another easy fix, which will provide a return on investment,’ he continued, ‘Floor mats are inexpensive and very easy to replace, which go a long way in revitalising the inside of a car.
‘And if it’s a more expensive car, replacing key features such as alloy wheels with brand new ones, could drive a much better price for the seller.
‘For many people, their car is one of their most valuable assets. However, countless car owners still don’t see their car as an asset and as such, are unaware of the value of their car or how it depreciates – or even goes up in value – over time.
‘We’ve created the Car Value Tracker to help our customers keep track of their car’s value and to empower them with the knowledge they need to sell their car at the right time.’
The amount UK drivers borrowed to pay for cars hit a new record in 2022, rising by over £4billion compared to the previous year.
According to a new study from Motorway , 11% of Brits have been forced to sell their precious motors because spiraling energy, rent, food and, car costs such as MOTs and petrol
Despite fewer new and used car sales recorded last year and a decline in the number of finance deals being taken out, analysis of the full-year data published by the Finance and Leasing Association (FLA) shows that borrowing ballooned to £40.7billion.
It has been partly driven by average finance amounts per vehicle reaching never-before-seen levels for both new and second-hand cars.
In 2009 some £11.2billion was locked up in motor finance, therefore there has been a 263 per cent rise between then and last year.
Average weekly earnings rose from £435 in 2009 to £614 in 2022 – just a 41 per cent increase.
New car buyers borrowed £25,325 on average in 2022, up from £23,746 in the previous year – and more than double the amount incurred in 2019, which was around £12,000 13 years prior.
There are growing concerns that many Britons locked into finance arrangements could struggle to keep up repayments and default on debts, especially as average wages fail to keep pace with this level of growth
Used purchases incurred £15,475 of debt, up from £14,113 respectively in 2021, the FLA’s data shows.
With borrowing reaching new heights at a time when the UK is in the clutches of a cost of living crisis, there is a chance that some motorists could find themselves in financial distress.
There are growing concerns that many Britons locked into finance arrangements could struggle to keep up repayments and default on debts, especially as average wages fail to keep pace with this level of growth – and food prices, energy bills and inflation remain worryingly high.
It has also become more expensive to fuel a car due to the huge increase in the cost of oil.
This has also been partly driven by the war in Ukraine that has disrupted world prices for grain and petrol.
The OPEC+ said in April it would cut output by nearly 1.2 million barrels of oil per day, equivalent to just over 1 per cent of global supply, in an unexpected announcement that caused an immediate spike in global prices.
Howard Cox, chief executive of campaign group FairFuelUK, said: ‘OPEC+ by holding the world to ransom again is the cyclical routine we have come to expect from ruthless dictators in the Middle East.’
As a result of what he said was ‘opportunistic profiteering by the fuel supply chain’, Mr Cox warned that drivers can expect pump prices to rise again, which would push up inflation and worsen the cost of living crisis.
Some links in this article may be affiliate links. If you click on them we may earn a small commission. That helps us fund This Is Money, and keep it free to use. We do not write articles to promote products. We do not allow any commercial relationship to affect our editorial independence.