Three-quarters of motorists say Iran conflict has stretched household finances

Almost three-quarters of UK motorists say their finances have been stretched by the impact of the war in Iran, with many delaying vehicle purchases and cutting back on essential motoring costs, according to the latest Startline Used Car Tracker.

The July research found that 73% of consumers believe the conflict has negatively affected their finances, while many expect the economic pressures to continue well into next year.

A third (33%) of respondents believe it will take at least six months before their financial situation improves, while 25% expect it to be more than a year. A further 10% think recovery will take longer than two years.

The financial strain is already influencing consumer behaviour in the automotive market. More than a third (36%) said they are now less likely to replace their current vehicle, while the same proportion are looking for cheaper motor insurance.

One in four (25%) are postponing repairs to minor body damage, 19% are spending less on vehicle servicing and 15% are using their car less often. Meanwhile, 11% are delaying tyre replacements and 4% said they may have to sell their vehicle altogether.

“Following the inflation of the post-pandemic period and the negative impact of Brexit, many feel the war in Iran is yet another problem and consumer confidence is currently at its lowest point for several years.

“It seems they feel wary and vulnerable, and this is having a direct impact on their motoring expenditure. Especially, seeing people defer servicing and tyre replacement – both actions that could directly impact their safety – is a concern.

“Also, while the 4% who say they may have to sell their car is a low percentage, it just shows how marginal some people’s finances have become. Their ability to handle any kind of economic shock is very low.”

The survey also found that concerns extend beyond motoring costs. More than half (53%) of respondents expect food prices to increase further, while 42% anticipate higher household heating bills as the economic effects of the conflict continue to feed through.

Burgess said consumers are increasingly looking for ways to reduce everyday spending while remaining uncertain about when conditions will improve.

“People are looking to make savings in all kinds of daily expenditure and, with the conflict still underway and a resolution seemingly difficult to achieve, it appears that they are correct in believing the situation won’t improve for some time yet.”

The Startline Used Car Tracker is compiled monthly by APD Global Research on behalf of Startline Motor Finance. The latest edition surveyed 300 consumers and 60 motor dealers.