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Just how many Brits are buying cars on loans and finance?
Taking out a car loan or using finance options can allow you to drive away in your dream motor. But just how much are us Brits spending on these loans? We did some research to find out.
Key statistics
- Over 2.4 million cars were bought on finance in 2018, up 2% from 2017.
- Of the cars purchased on finance, just over 64% were used cars.
- The total value of the car finance market totalled over £37.4 billion in 2018.
- The average monthly cost of running a car on finance is almost £390.
Car finance contracts
Buying your car on finance is a way of spreading the cost over a longer period of time. So how many of us are buying our cars this way?
Total number of finance contracts each year
Over 2.4 million cars were purchased on finance contracts in 2018, up 2% from 2017. Despite an increase on the year before, the growth in cars purchased on finance has been slowing. 2018 growth represents the smallest growth in the last six years.
Total amount of car finance contracts per year
*April 2018/19 figuresTotal amount of car finance contracts per year
| Year | Total volume | Percentage change |
|---|---|---|
| 2013 | 1.71 million | +18% |
| 2014 | 1.94 million | +13% |
| 2015 | 2.13 million | +10% |
| 2016 | 2.3 million | +8% |
| 2017 | 2.35 million | +2% |
| April 2018* | 2.41 million | +2% |
Total value of car finance contracts each year
The car finance contract market is growing in value each year in the UK. In 2018 this market was worth over £37 billion, up from £34 billion the year before.
Total value of car finance contracts per year
| Year | Total value | Annual change |
|---|---|---|
| 2013 | £20.8 billion | 25% |
| 2014 | £24.7 billion | 19% |
| 2015 | £28.3 billion | 15% |
| 2016 | £31.6 billion | 12% |
| 2017 | £34.2 billion | 8% |
| 2018 | £37.4 billion | 5% |
Cars purchased on finance through dealerships
Car financing options are available on both new and used cars, so which are we using most of our loans for? Interestingly, the numbers of new and used cars purchased with finance are almost identical. The difference between the two lies in the amount we are borrowing for new cars, which, as you would expect, is more.
In April 2019, over 20,000 cars were purchased through finance in the UK. Of those, 76,000 were new cars and 134,000 were used cars. Overall, the number of cars purchased on finance has fallen by 2% compared to this time last year, however, used car finance purchases are up 1% compared to a 7% reduction in new car finance purchases.
Interestingly, the value of advances across the 2 categories is almost identical despite the difference in the number of cars. This shows that despite buying fewer new cars on finance, we are borrowing more to afford them.
Cars bought on finance through dealerships, April 2019
Total number of cars bought on finance through dealerships, April 2019
| Car purchase type | Number of cars | Percentage change on previous year (April 2018) |
|---|---|---|
| New | 76,042 | -7% |
| Used | 134,073 | 1% |
| Total | 210,115 | -2% |
Total value of advances on cars bought on finance through dealerships, April 2019
| Car purchase type | Value of advances | Percentage change on previous year (April 2019) |
|---|---|---|
| New | £1,603 million | -2% |
| Used | £1,632 million | 4% |
| Total | £3,236 million | 1% |
Cost of running a car
From car insurance to petrol, running a car can be pricey. The latest statistics show that the average cost of running your car per month is over £160, and more than double if your car is on finance. That’s nearly £2,000 a year, not including cars with finance payments.
Including finance payments, the average cost of running a car for a month is almost £390. That’s over £4,500 a year. Explore the graphics below to see a more detailed breakdown of exactly where all that money is going.
Monthly cost of running a car, with and without finance
Monthly cost of running a car, with and without finance
| Item | Average monthly spend |
|---|---|
| Fuel | £67.63 |
| Car insurance | £31.64 |
| Routine maintenance and servicing | £15.96 |
| Unexpected repairs and breakdowns | £13.26 |
| Vehicle excise duty (road tax) | £12.16 |
| Breakdown cover | £6.96 |
| Parking permits and tickets | £6.89 |
| Cleaning | £4.15 |
| Fines | £3.69 |
| Monthly average total (excluding finance) | £162.33 |
| Finance | £226.12 |
| Monthly average total (including finance payments) | £388.45 |
Sources used
- Finance & Leasing Association
- Kwik Fit 2018
Click here for more research. For all media enquiries, please contact:
Matt Mckenna
UK communications manager
T: +44 20 8191 8806
UK communications manager
T: +44 20 8191 8806
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