Drivers who pay for car on finance face losing £25,188 after September

A single homebuyer, earning the average UK salary, could borrow £26,543 less if they have an additional outgoing of £330
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Drivers upgrading their wheels this month could dent their borrowing prospects by over £25,000 according to analysis from Coventry Building Society. A single homebuyer, earning the average UK salary, could borrow £26,543 less if they have an additional outgoing of £330 – a representative example of the monthly payment for a new Ford Puma, the UK’s most popular car.

Joint buyers, both earning the UK average salary, could borrow £25,188 less if they both have an additional £330 outgoing. If only one person has the outgoing, the maximum borrowing is reduced by £8,772. For those looking to buy a new Audi A3 - the UK’s most popular luxury car – a monthly payment of around £408 could reduce the maximum mortgage borrowing by £35,959 for single homebuyers, £38,639 for joint homebuyers if they both have a car payment, and £12,329 if one person has a car payment.

Jonathan Stinton, Head of Intermediary Relationships at Coventry Building Society, said: “Going to buy a brand-new car can be exciting, but before signing the deal it’s worth knowing what the extra outgoing can mean for your mortgage.

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"Our research of the top ten lender’s affordability shows a car payment of £330 could hamper borrowing by over £25,000, which - if you’re looking for a new home - could mean compromising on an extra bedroom, or more square footage, or having to save for longer to make up the difference.

“Even if you don’t have immediate plans to move it’s worth remembering that when it comes to remortgaging lenders still need to make sure your mortgage is affordable, so a new car payment could really limit your options.

"It’s not to say people shouldn’t have a new car if they want one, it’s to let them know the potential implications in advance so they can do their research and make the choice which is right for them.”