How the cost-of-living crisis is forcing Britons to sell their cars: 2.8 million motorists may have sold their cars as a result of the rising food, petrol and energy crisis

More than 2.8 million Britons may have been forced to sell their cars to cope with cost-of-living pressures, a study has found.

This is according to a new study by MotorwayPossibly 11 percent of Britons have been forced to sell their motorcycles because of rising energy, rental, food and car costs such as MOT and petrol.

Nearly one in five owners surveyed aged 25 to 34 claimed to be selling their car as a result, which is the highest of any age group.

The Bank of England has raised interest rates to 5.25 percent for the 14th consecutive time in a bid to bring inflation under control. But this has pushed up mortgage rates and meant that those who had to take out a new mortgage often had to pay hundreds of pounds more per month, exacerbating the problem.

Motorway surveyed 2,090 representative people in accordance with British Polling Council standards and extrapolated the results to the figure of 2.8 million. It didn’t make it clear whether those who said they sold out had bought a cheaper car instead.

High used car prices mean that those who sell may be able to get back close to the amount they paid for their car, or even more in some cases.

The domino effect, however, is that if they scale back the trade, they’ll likely find that the vehicle is also more expensive than before.

Despite the spike in car prices, the survey also shows that 41 percent of Britons have no idea how much their car is worth.

In the first quarter of 2023, the UK used car market experienced its largest increase in value in three years.

In recent years, a combination of the disruption of the Covid lockdown, shortages of computer chips and significant supply chain problems in the automotive industry, exacerbated by the war in Ukraine, has led to a lack of new car supply.

This has helped the average price of used cars to rise by almost a third (or more than £4,000) since 2020.

The supply of new cars has now increased and the rise in used car prices has now slowed down, with some used electric cars now falling significantly in price.

To help people understand what their car is worth, Motorway has unveiled the free Car Value Tracker, a tool that allows drivers to see the most accurate value of their car right now and over the past two years.

You can try the Car value tracker here or quickly check the current value of your car using the calculator above.

Motorway co-founder Alex Buttle said: ‘One of the biggest mistakes car owners make when selling their car is simply not knowing how much their car is worth.

“Previously, the value of a car almost always followed a downward trend, but the industry has experienced unprecedented changes in the past three years.”

How to get the best price for your car

Mr Buttle said that just as a homeowner would do DIY jobs before selling the car, there are a few quick fixes that car owners can do to get the best price for their car.

For starters, car salespeople need to thoroughly clean their cars, inside and out. The better the car looks, the easier it will be for a dealer to imagine the car is in the forecourt.

“Replacing worn parts is another easy fix that will provide a return on investment,” he continued. ‘Floor mats are cheap and very easy to replace, which goes a long way in revitalizing a car’s interior.

And if it’s a more expensive car, replacing key features like alloy wheels with brand new ones could get a much better price for the seller.

For many people, their car is one of their most valuable assets. But countless car owners still do not see their car as an asset and as such are not aware of the value of their car or how it depreciates or even increases in value over time.”

Britain owes a record amount in car loans

The amount British motorists borrowed to pay for cars hit a new record in 2022, rising by more than £4 billion from the previous year.

Despite lower new and used car sales last year and a decline in the number of finance deals concluded, analysis of annual figures published by the Finance and Leasing Association (FLA) shows loans increased to £40.7bn .

This is partly due to the fact that average financing amounts per car reached an unprecedented level for both new and used cars.

In 2009, there was some £11.2 billion tied up in car finance, a rise of 263 per cent between then and last year.

Average weekly income rose from £435 in 2009 to £614 in 2022 – an increase of just 41 per cent.

New car buyers borrowed an average of £25,325 in 2022, compared to £23,746 in the previous year – and more than double the amount borrowed in 2019, which was around £12,000 13 years earlier.

Used purchases led to a debt of £15,475, compared to £14,113 in 2021, the FLA’s data shows.

With borrowing reaching new heights at a time when Britain is in the throes of a cost-of-living crisis, there is a chance that some motorists may find themselves in financial distress.

There is growing concern that many Britons trapped in financial arrangements could struggle to keep up with debt payments and default, especially as average wages cannot keep up with this level of growth – and food prices, the energy bills and inflation remain worryingly high.

It has also become more expensive to fuel a car due to the huge rise in oil costs.

This is also partly due to the war in Ukraine, which has disrupted world prices for grain and gasoline.

OPEC+ said in April it would cut production by nearly 1.2 million barrels of oil per day, equivalent to just over 1 percent of global supply, in an unexpected announcement that triggered an immediate spike in global prices.

Howard Cox, CEO of campaign group FairFuelUK, said: “Oopec+ taking the world hostage again is the cyclical routine we’ve come to expect from ruthless dictators in the Middle East.”

As a result of what he called ‘opportunistic profit-seeking by the fuel supply chain’, Mr Cox warned that drivers could expect pump prices to rise again, driving up inflation and exacerbating the cost-of-living crisis.