Poorest households in UK spend 25% of income on Cars

As we all know, running a car isn’t cheap, especially when you factor in the cost of road tax, MOTs, and general maintenance. This is why so many people now go online to try and find cheap car insurance quotes for their vehicles, however it now seems that no matter how cheap a car insurance deal some families get they will still struggle to run their vehicles. Today, it was reported by the RAC that more than eight-hundred thousand homes across the UK have to spend a quarter of their income on running their vehicles, which the RAC has termed “transport poverty”.

The research conducted by the RAC was based on “previously unreleased” data from the Office of National Statistics, and shows that the poorest ten per cent of car-owning households are struggling with the cost of running their vehicles. The research also shows that in contrast, the richest car-owning households in the UK only spend twelve per cent of their income on running their vehicles, meaning that there is a widening rich/poor divide. Professor Stephen Glaister, director of the RAC Foundation said: “These figures should shock the Chancellor.”

“We already knew transport was the single biggest area of household expenditure bar none. But this spending breakdown just for car-owning households is not normally available. It lays bare the truth about the extent of transport poverty throughout the UK.” The report states that families that generally spend £167 each week use £44 of this money on car related expenses, £16 pounds of which goes on petrol, £8.30 on insurance and £4.30 on repairs and servicing.

Petrol is obviously the biggest cost to drivers, however recently the Office of Fair Trading published a report stating that the price of petrol in the UK was fair compared to other markets throughout Europe, and that the reason why members of the British public have to pay so much to fill up their car is due to fuel tax. At the moment, fuel duty accounts for almost sixty pence of every litre of petrol, which currently costs around 140p per litre.

Commenting on the upcoming Budget, Mr Glaister said that George Osbourne’s plan of “tinkering” with the level of duty for the future was like “rearranging deck chairs on the Titanic. To make any meaningful difference to those on the lowest incomes the rate will need to be cut much further.”

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