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.
Lee 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.”
Also, 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.
Lee said: “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.”
The RAC Dealer Network research was carried out for Assurant by Toluna Harris Interactive, questioning 1,000 UK adults who own a car and are looking to purchase another within the next three years. Assurant is a Fortune 500 company that specialises in supporting, protecting, and connecting major consumer purchases, including vehicle protection products and services.
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About the RAC
The RAC, an iconic UK brand, provides complete peace of mind to more than 13 million UK private and business drivers, whatever their motoring needs. As well as its premium nationwide breakdown assistance service – with an expert branded patrol workforce attending more than two million breakdowns every year – it offers a wide range of market-leading products across insurance, legal services, vehicle inspections and service, maintenance and repair. The RAC is also at the forefront in helping drivers make the switch to electric vehicles and leads in the development of new solutions for businesses and OEMs, partnering with the best in the motoring and mobility space.
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About Assurant
Assurant, Inc. (NYSE: AIZ) is a leading global business services company that supports, protects and connects major consumer purchases. A Fortune 500 company with a presence in 21 countries, Assurant supports the advancement of the connected world by partnering with the world’s leading brands to develop innovative solutions and to deliver an enhanced customer experience through mobile device solutions, extended service contracts, vehicle protection services, renters insurance, lender-placed insurance products and other products.
Learn more at assurant.com or on Twitter @AssurantNews.
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