Over the last decade, the most popular route to purchasing a car has been to finance it, whether through, hire purchase, personal contract purchase, or lease purchase. In the UK, over 90% of new cars are bought with this type of product.
The benefits of purchasing a car with finance include having agreed upon monthly payments which makes budgeting easier and allow customers to change cars every few years, keeping up with the ever-changing technology improvements, just like the newest smartphone.
However, despite the numerous benefits financing your new car can bring there is one major drawback. Women are spending a higher percentage of their monthly income on car finance repayments compared to male counterparts, despite purchasing similar vehicles, at a similar price. Analysis by Creditplus, one of the UK’s leading providers of a car finance, discovered that women are also earning, on average, 22% less than their male equivalent, driving them to sacrifice a higher percentage of their salary.
Further compounding the issue is lower deposit contributions from women, who on average pay 33% less than their male counterparts. This could possibly be caused by having lower incomes to save initially. As with most loan facilities, the lower the deposit, the higher the monthly payments, and this further increases the percentage of salary woman are spending on a vehicle.
Women earn, on average, $700 less per month than men. On the same vehicle with the same retail value, a female driver sacrifices 10% of their total salary compared to 7% for a male driver. Between the two groups, the comparable percent spent is on average 29% more for women than men. Combined with rising costs of living and stagnant wages, this discrepancy can affect other aspects of drivers lives.
During the car buying process, it’s a worthwhile task comparing the Total Cost of Ownership of cars you’re looking at, as some may be cheaper to purchase or finance, yet have higher insurance costs, are more likely to require mechanical work or depreciate faster.
According to research by Confused.com, 44% of car buyers said visiting a dealership was as stressful as a job interview. Particularly amongst women, buying a car is one of the most demanding purchases but proactive steps are being taken to address the imbalance.
Creditplus, the company who discovered the discrepancy, offers a unique Find, Fund and Deliver service which removes any subjectivity from the car buying process. This service is designed to ensure that every customer pays a fair price for a quality used vehicle.
In addition to sourcing vehicles from a network of dealerships, customers are also provided with the facility to build their finance quote, and even e-sign the documentation, without leaving their living room through a completely self-service online journey. This development from Creditplus removes the need for a customer to visit a car showroom, with the added security of approved vehicle checks and warranty.
Despite greater awareness of gender pay differences over the last several years, this is just one example of how unfair pay can have a big impact on people’s lives. Although some companies ensure all of its employees are paid fairly and equally, it’s clear that this view is not shared by every employer.