New research has found that when consumers are told they’re getting paid back on the repairs they’ve already made, they’re less likely than their non-paying counterparts to make monthly payments.
Key points:The study, conducted by the Australian Automobile Association (AAA), found that the average consumer spends an average of $4.33 a month on vehicle repairs and maintenanceAccording to the AAA, the average cost of a new vehicle is $16,974In the study, consumers were asked how much they thought they were paying for their car purchases, and the research found that on average, the consumer spends $4,333 on vehicle repair and maintenance.
The average cost to repair and maintain a new car is $2,966, the study found.
However, when the consumer was told they were getting paid for the work they had already done, the figure rose to $5,977.
When asked how many repairs they had done, respondents were more likely to say they had completed 50% or more of their total repairs than those who were told they had been paid for less work.
The study also found that more than half of the respondents said they would consider making a payment on the vehicle they were buying.
The research was conducted by Australian Automotive Association’s Dr David Geddes, who led the study.
He said the study’s findings had “very significant implications for the way we approach vehicle finance”.
“It means we’re going to be looking at the impact of what we pay on the amount we’re paying for the vehicle we’re buying, and if that impacts on people’s willingness to make a payment, we need to look at that,” he said.
Dr Gedds said the AAA was concerned that the study could lead to further confusion about the relationship between a car’s cost of ownership and whether it should be sold.
“We’re concerned it could lead consumers to believe that if they buy a car that they’re not paying for, it’s actually a cost of living, and they need to pay for the car to get there,” he told 7.30.
He also said it was important to remember that consumers had different preferences and requirements about how much to spend on a car purchase.
“If you’re a family, you’re going through the budgeting process and you’re buying a family vehicle,” he explained.
“You might decide that you need to spend around $50,000 on your car, you might decide to spend more and buy a more luxurious vehicle, but if you want to buy a luxury vehicle, you may decide to buy it at a much lower price.”
The study has been published in the journal Consumer Finance.
Topics:consumer-finance,business-economics-and-fiscal-policy,home-products,consumer-protection,consumer,consumerism,housing-industry,consumerist,australiaContact Rebecca RiddellMore stories from Australia