Poorest households spend a quarter of income on running a car
The poorest households in the UK saw spending on buying and running a car rise in 2018-19.
RAC Foundation analysis of data requested from the ONS suggests that around a million car-owning households in the lowest of the ONS’s ten income brackets (the poorest 10%) spent an average of £57.10 per week on purchasing and operating a car or van in 2018-19.
This amounts to just over a quarter (26%) of the maximum weekly spend of £218 for households in this group over the year.
The £57.10 weekly spend is 17% higher than the £48.90 spent in the previous financial year, 2017-18.
Of the £57.10:
- £17.70 went on purchasing a vehicle (£14.30 in the previous financial year)
- £15.00 went on fuel (£13.30)
- £9.30 went on insurance (£8.50)
- £5.00 went on repairs and servicing (£4.80)
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 2018-19 was, in total, £585.60 (up from the previous year’s £572.60).
Of this £585.60, £80.20 (slightly down from £80.80 in 2017-18) went on transport of all kinds, making it the single biggest area of spending two years in a row (average spending on household fuel and power was £79.40 excluding mortgage payments, including mortgage payments however it was £100.20). At 14% the proportion spent on transport in 2018-19 was the same as in 2017-18 and 2016-17.
Data from the Society of Motor Manufacturers and Traders shows that 2.37 million new cars were sold in the UK in 2018, a 6.8% decrease on the 2.54 million sold the year before.
SMMT data also shows that 7.94 million used cars were sold in 2018, a slight (2.1%) fall on the 8.11 million sold in 2017.