Almost half of motorists (47%) would feel “anxious and financially stressed” by an unexpected £1,000 car repair bill, new research from the RAC Dealer Network shows.
In a sign of the impact of the cost-of-living crisis, the percentage has increased from 37% compared to the last time the organisation asked this question in 2021.
Almost six-in-10 (58%) surveyed would not have sufficient money to hand to cover such a bill. Out of those, 21% would rely on their car warranty, 13% put it on a credit card or use another lender, 10% turn to from family or friends, and 2% would use other options – while 12% would simply be unsure how to pay the bill.
Lee Coomber, RAC Client Director at Assurant, which partners with the RAC in the aftersales sector, said: “These figures really do underline the impact of the pressure on personal finances that has been seen over the last couple of years. A £1,000 repair bill for a used car is not uncommon – transmission issues, air conditioning compressors or timing chain failure can easily cost this much – and it’s clear fewer people feel that they would be able to cope with this kind of financial strain.”
The RAC Dealer Network’s research also shows that 74% are aware that car dealers offer extended warranties, with 39% likely to take one out on their existing car and 57% on their next car.
Coombe added “These figures show a high degree of propensity for purchasing an extended warranty, with motorists who are being affected by the cost-of-living crisis recognising the value of a having cover in place when it comes to meeting a repair bill.
“Something we have seen across the RAC Dealer Network over the last two years is a higher penetration of extended warranty sales, underlining the growing demand that exists for this kind of cover as people seek to protect themselves from higher motoring costs.”
Respondents were asked which dealer products they might buy if offered. Those in 35-54 and 55-plus groups were the most interested in extended warranties, service plans and breakdown cover, while those in the 18-34 group had the highest levels of enthusiasm for tyre insurance and alloy wheel insurance, and were also among the most receptive to cosmetic damage insurance.
Coombe concluded “It’s especially interesting to look at demand for all dealer products by age. People in the two older age categories are attracted to products such as warranties that cover the car and make motoring more easily affordable, while the propensity for alloy wheel and cosmetic damage among younger people shows both a desire to keep their car looking good, and to avoid unexpected expenses in this area.”