Transport poverty 2017-1824 Apr 2019

Poorest households see a drop in car-related expenditure

The very poorest car-owning households have seen their expenditure on motoring drop by 16% in a year.

RAC Foundation analysis of data requested from the ONS suggests that just under a million car-owning households in the lowest of the ONS’s ten income brackets (the poorest 10%) spent an average of £48.90 per week on purchasing and operating a car or van in 2017-18.

This amounts to just less than a quarter (23%) of the maximum weekly spend of £211 for households in this group over that period.

The £48.90 weekly spend compares with £58.20 in the previous financial year, 2016-17.

Of the £48.90:

  • £14.30 went on purchasing a vehicle (£20.40 in the previous financial year)
  • £13.30 went on fuel (£14.80)
  • £8.50 went on insurance (£7.60)
  • £4.80 went on repairs and servicing (£6.10)

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It is not clear whether the reduced spending is down to a general reduction in the cost of buying and running a car or households deciding to cut back on motoring expenditure, perhaps by delaying the replacement of a vehicle.

Averaged across all ten of the disposable income brackets, weekly expenditure on motoring in car-owning households accounted for £94.16 in 2017-18, down from £99.50 in 2016-17.

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

That showed that across all households in the UK – car owning and non-car owning alike – average weekly expenditure in 2017-18 was, in total, £572.60 (up from the previous year’s £554.20).

Of this £572.60, £80.80 (up from £79.70 in 2016-17) went on transport of all kinds, making it the biggest single area of spending. At 14% the proportion spent on transport in 2017-18 was the same as in 2016-17.

According to the ONS the proportion of households owning at least one car or van at the end of 2017-18 was 78%. This compared with 52% in 1970 and 79% in 2016-17.

Data from the Society of Motor Manufacturers and Traders shows that 2.54 million new cars were sold in the UK in 2017, a 5.7% decline on the record 2.69 million sold the year before.

SMMT data also shows that 8.11 million used cars were sold in 2017, a slight (1.1%) fall on the record 8.2 million sold in 2016.