A survey of more than 1000 Australians (over 18) has confirmed what car makers already know, more than a third of car owners will update their vehicles in 2021, and many models will be Utes.
The survey took into account that one in every two Australians suffered a financial loss during the COVID-19 pandemic, yet a three in ten (or 5.8 million Australians) will still invest in a car in 2021, this research has found.
In addition, almost half (41%) of Australians do not feel in control of their car expenses, which is costing them upwards of $5100 a year or $9000 per year for those with loan repayments.
The findings come as part of Carbar’s Future Finance and Mobility report, looking at the intersection between consumer finance and auto trends.
The research drew responses from a representative sample of over 1048 Australian adults (over 18). The study was conducted by YouGov.
In 2021, the majority of Australians (34%) intend to buy a second-hand car in 2021. Meanwhile, around 22% intend to buy a new car.
Roughly 2.2 million Australian adults (11%) are looking for more flexible options, including almost 1 million people that intend to use car subscription services.
In addition, out of the million Australians looking favourably at subscription, only 28% are looking to buy new or used cars. The majority of Australians interested in subscriptions are millennials.
“These results show that transport and car costs are still a key consideration for Australians despite the hardship they endured in 2020,” Carbar CEO Des Hang said.
“Yet, these costs are considerable. This study indicates that the typical Australian loses around $5131 per year on a new car, factoring in depreciation, insurance, maintenance and repayments.
“Almost half of Australians also indicated they do not feel in control of their car expenses too.”
“Remarkably, those hardest hit by COVID, millennials, also tend to spend up to $7300 per year on their car — thousands more each than both Gen X and the Baby Boomers.”
“For us, this shows a lack of awareness in the market around the true cost of owning a car, a point we are keen to champion and increase awareness on.
“Subscription is a flexible alternative to car ownership that can free up funds to service personal debt or gain greater control over your finances.”
Starting from $129, car subscription includes everything except fuel, so moving to electricity makes perfect sense as consumers try to reduce debt and ongoing costs of running a vehicle.
The research also highlighted other factors at play
Almost one in two (46%) Australians have suffered financial losses due to the COVID-19 pandemic, including 9%, the equivalent of 1.8 million people that have taken on additional debt to cover their expenses. Millennials and young families suffered the greatest financial losses during this period.
Eight in ten (80%) Australians own a car, with two in three (64%) owning their car outright and one in five (19%), the equivalent of 3.8 million people owning their cars with finance or through a novated lease through their employer.
Around 84% are also looking to make behavioural changes regarding their spending and consumption habits. Six in ten are looking to support more local and Australian owned businesses (61%) and avoid crowds or busy public spaces (58%).
If the cost and condition of a car was not a factor, nine in ten (89%) Australian adults would like to own or have access to a car in 2021. The most preferred vehicle types are family cars or SUV’s (32%) and economical cars (30%). However, almost one in five (17%), the equivalent of 3 million people, would prefer an electric car in 2021.
Heading into 2021, one in four (23%) Aussies say they do not feel in control of any of their expenses. Around 48% do not feel in control of their education costs, 47% do not feel in control of their other loans and debt, 46% do not feel in control of their mortgage repayments or rent, 45% do not feel more in control of their public transport, taxi or car-sharing expenses and four in ten (41%) do not feel in control of their car expenses.
Carbar is a leading mobility technology provider that offers customer-centric alternatives to traditional car ownership. Founded in Melbourne in 2016 as a virtual car dealership, Carbar was the first to market in Australia with car subscriptions and has maintained its leadership position.
Carbar’s success has recently been acknowledged with IAG, Australia’s largest general insurer, acquiring a majority stake in the platform. Carbar is 55 employees strong and growing and currently operates in Victoria, New South Wales and Queensland with imminent plans for greater national expansion.