Soaring car costs trapping millennials in debt
May 28, 2025 by Siobhan Doyle
Car changing is a big deal
Nearly a third of UK drivers are being pushed into debt just to keep their cars on the road – and younger motorists are feeling the pinch the most, a new survey has revealed.
Around 29% of drivers nationwide have had to dip into credit cards, overdrafts, or even payday loans to cover the essential car running costs such as fuel, insurance, repairs, and MOTs, according to the research by digital car finance provider Carmoola.
Millennials (aged 25-34) are particularly hard-hit, with half admitting they’ve gone into debt to keep their cars running – nearly double the national average. The trend is only slightly less prominent among 35 to 44-year-olds, where 41% report turning to borrowing for car-related expenses.
The financial strain doesn’t end there. Almost one in five drivers (18%) say they expect to borrow money just to cover car expenses, while 8% anticipate going into debt for the first time this year.
Insurance, repairs, and MOTs top the financial pain list
When asked which costs are hitting their wallets the hardest, insurance led the list (34%), followed by unexpected repairs (25%), MOT and servicing (23%), fuel (22%), and car tax (17%).
This financial pressure peaks around ‘MOT season’ – typically around March and April – when many drivers face annual inspections. This year, 24% of drivers had to borrow money to pay for their MOT test, with millennials again feeling the pressure the most: 42% relied on credit to make sure their car was road legal.
The average MOT bill, including necessary repairs, came in at £159, but for more than a quarter of drivers (27%), costs ranged from £151 to £300.
Overdrafts are becoming a monthly habit
For some, debt isn’t just an emergency fallback: it’s becoming a monthly routine. 10% of the drivers surveyed say they dip into their overdraft every month to cover motoring costs, while 6% do so every two to three weeks. Among millennials, 11% rely on their overdraft every couple weeks to stay on the road.
Despite the growing reliance on borrowed trends, 60% of drivers said they’re uneasy with going into debt to cover their car expenses.
Planning ahead can prevent a financial breakdown
The survey shows the urgent need for drivers to plan ahead, and for lenders to promote financial responsibility. “Cars are essential for millions of people. But running costs, from fuel to insurance and surprise repairs, are clearly stretching people’s finances,” said Aidan Rushby, CEO of Carmoola.
Rushby advises that many costs can be reduced with smart planning: “Shop around for insurance and servicing, keep on top of your maintenance schedule, and plan for upcoming costs such as MOTs and renewals.”
He added that while credit can sometimes be a helpful short-term tool, it’s important to avoid long-term financial strain. “Using a credit card with an interest-free period can be smart, but only if you have a plan to pay it off before charges kick in.”
Car change? Carwow!
Looking for a new set of wheels? With Carwow you can sell your car quickly and for a fair price – as well as find great offers on your next one. Whether you’re looking to buy a car brand new, are after something used or you want to explore car leasing options, Carwow is your one stop shop for new car deals.
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