Transport poverty deepens19 Mar 2018

Poorest families see motoring expenditure leap by more than a third

The very poorest car-owning households have seen their expenditure on motoring jump by 37% in a year.

RAC Foundation analysis of previously unreleased data from the Office for National Statistics (ONS) suggests that just over a million car-owning households in the lowest of the ONS’s ten income brackets (the poorest 10%) spent an average of £58.20 per week on motoring in 2016-17.

This amounts to about a quarter of the maximum weekly spend of £205 for households in this group.

The £58.20 compares with £42.50 spent weekly in the previous financial year, 2015-16.

Of the £58.20:

  • £20.40 went on purchasing a vehicle
  • £14.80 went on fuel
  • £7.60 went on insurance
  • £6.10 went on repairs and maintenance

Averaged across all ten of the disposable income brackets, motoring expenditure in car-owning households accounted for £99.50 in 2016-17, up 10% on the £90.60 figure for 2015-16.

The data was collected as part of the annual ONS Family Spending in the UK report.

This report showed that across all households in the UK – car owning and non-car owning alike – average weekly expenditure in 2016-17 was £554.20. Of this £79.70 (14%) went on transport of all kinds, the biggest single area of spending.

According to the ONS the number of households owning at least one car or van rose from 52% in 1970 to 79% in 2016-17.

The ONS also points to data from the Society of Motor Manufacturers and Traders (SMMT) showing that 2016 was a record year for both new and second-hand car purchases.

Steve Gooding, director of the RAC Foundation, said:

“These figures suggest that even in the very poorest households, car ownership is seen by many as a priority, even though it absorbs such a high – and growing – proportion of their disposable income.

“The Office of National Statistics numbers suggest that the increase has been driven by more being spent on purchase and financing costs, whilst spend on fuels is falling, hopefully a reflection of the improved fuel economy offered by newer vehicles.

“Policy makers need to bear in mind the fact that any moves that would add to the cost of motoring – for example through changes to fuel duty or insurance tax – will be most keenly felt by those least able to afford them.”

ENDS

Contact:

Philip Gomm – Head of External Communications – RAC Foundation

philip.gomm@racfoundation.org | 020 7747 3445 | 07711 776448 | 020 7389 0601 (ISDN)

Notes to editors:

The RAC Foundation is a transport policy and research organisation that explores the economic, mobility, safety and environmental issues relating to roads and their users.

The Foundation publishes independent and authoritative research with which it promotes informed debate and advocates policy in the interest of the responsible motorist.

All the Foundation’s work is available on its website. A range of interactive and embeddable fuel data charts are available in the data section of the website:

www.racfoundation.org/data

The ONS table on 2016-17 expenditure on motoring for households owning a car, by disposable income decile is available here:

https://www.racfoundation.org/wp-content/uploads/ONS_households_with_cars_spending_on_cars_by_disposable_income_decile_201617.pdf

This is the comparable table for the previous financial year, 2015-16:

https://www.racfoundation.org/wp-content/uploads/2017/11/ONS_households_with_cars_spending_on_cars_by_disposable_income_decile_201516.pdf