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How much will you spend on your next car?

By Compare the Market | 29 Jan 2016
5 min read

Did you know that the average person spends about 4.3 years in their car over a lifetime, and in that time they drive the equivalent of the moon and back 3 times? That’s a lot of road time, and many of us give a great deal of thought towards choosing a great car to go the distance. So, what does this choice say about you?In the next four years it’s predicted that 2.2 million Australians intend to buy a new car; that’s just fewer than 1 in 10 of us. Choosing which car to purchase can be a tedious and time consuming decision for some, or an enjoyable kid-in-the-candy-store experience for others.

In the next four years it’s predicted that 2.2 million Australians intend to buy a new car; that’s just fewer than 1 in 10 of us. Choosing which car to purchase can be a tedious and time consuming decision for some, or an enjoyable kid-in-the-candy-store experience for others.

One consideration when looking for a new car is finding a model that performs the functions needed for your day-to-day life; be it taking the kids to football on a Sunday morning, or making it through the rough terrain between you and your favourite camping spot. You may feel an emotional attachment to your car, or you may only see it as a means of getting from A to B. The vehicle you choose is an extension of your lifestyle, and it can say a lot about you.

  • 24% of Australians believe you can tell a person by the type of car they drive
  • 6% of Australians choose their car predominantly based on how it looks

We’ll be using consumer insight surveys to build profiles based on the ‘typical people’ who buy certain types of car (sports cars, SUVs, small cars and large cars), so you can see where you fit (or don’t fit) into the Australian driver landscape.

Can data tell you how much will you spend your next car?

According to recent survey insights from Roy Morgan:

  • The average Australian anticipates they will spend $36,840 on their next car. With the average household income being $133,000 per annum that’s a whopping 28% of annual earnings on a car.
  • However this amount grows significantly with earnings, though it’s a smaller percentage of their annual wage; those who earn over $200,000 expect to spend $48,830 (24% of their annual household income).
  • Of those earning more than $200,000 per year,
    • 4% expect to spend less than $20,000 on their next car, while
    • 30% may spend $50,000 or more.
  • 12% of all people surveyed expect to spend under $20,000, while 15% expect to spend more than $50,000.
  • The most popular intended spend bracket is $30,000-$39,999 for all income brackets, but this rises to $40,000-$49,999 for high earners.

The news that high income earners spend more on their vehicles isn’t terribly surprising. However, what is interesting is that they spend a lower proportion of their income on the investment. If you’re shopping for a new car in the most popular price brackets ($30,000 to $50,000), it may pay to be aware that you could face the most competition from other buyers.

Do you fit into any of these car buying profiles?

These profiles are based on Roy Morgan survey data. They represent the typical owner of the car being discussed.

Are you a sports car owner living in a capital?

  • Mainly men
  • Living in capital cities
  • Owners of sports cars valued under $80,000 are 35% more likely to be between 18-24 years old. But also there is an above average amount of these sport car owners between 25-34 and 50-64
  • Owners of sports cars valued over $80,000 are 62% more likely to be between 50-64 years old. But also there is an above average amount of these sport car owners between 35-49
  • High income (70k+)
  • Full-time employed, with a degree or diploma
  • Semi-professionals, managers, salesmen, professionals and small business owners
  • Mainly living in young singles households but also in mid-life households
  • No children, slight skew toward single

Many sports cars have limited seating, so match up well with the single person persona. They’re not often associated with practicality, but making driving a more thrilling and enjoyable experience.

Take your SUV’s to rural areas?

  • Both men & women
  • 7% are from country areas
  • SUV owners are 46% more likely to be aged 35-49, and 22% more likely to be aged 50-65
  • High income (70k+)
  • Full-time employed, with degree or diploma
  • Farm owners, small business owners and managers
  • Young parents
  • Averaging 2 kinds under 16 in each household

SUVs are the rural areas answer to the sports car. Suitable for any terrain and strong enough to take a large load, these are practical in the right situations.

Have a light cars in the city?

  • Mainly single women
  • Living in capital cities
  • 30% more likely to be aged 18-24 and 16% more likely to be ages 65+
  • Part-time employees or uni students who have completed a degree or diploma
  • Semi-professionals, semi-skilled workers, salespersons or clerks / typists
  • Earning $20,000 to $39,999
  • Living in young single or couples households

Small cars are practical and economical over shorter distances, and in tight spaces. They’re often cheaper to buy and cheaper to run, making them a good choice for city living.

Who owns large cars?

  • Mainly men
  • Living in country areas
  • Aged 50-64
  • Finished school in year 11
  • Farm worker, skilled workers, unskilled workers, farm owners
  • $40,000 – $69,999
  • Married, de facto, young family households
  • Parents with 1-3 young children

The large cars are often less economical, but can pack children, shopping and pets in without much fuss. They are often cheaper than the SUV and a good choice for an average Australian family.

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Does your car reflect your personality?

Data such as this can be a fun way to see if you’re heading with the Australians car buying crowd, or diverting away from the norm established in the data. If you’re budgeting for a new car this year, how much of your annual income will be spent on such an expensive purchase?

As much as consumer surveys reveal how the masses choose their vehicles, we’d like to hear your opinion. Do you think this data is right on track? Join the discussion on our Facebook page and let us know.

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