During lockdown in 2020, the local council in my neighbourhood of Levenshulme – a suburb of red-brick terraces in Manchester – proposed a low-traffic neighbourhood scheme. The plan generated substantial backlash among a segment of the community, leading to all kinds of rows and questionable behaviour on Facebook and elsewhere.
A central claim of the objectors was that people such as me who generally supported the measures were middle-class hippies intent on disrupting ordinary, working-class people who needed their cars in their day-to-day lives. At times, it seemed to touch on conspiracy theory. Supporters were cast as canny “gentrifiers”, who saw the planters being proposed to block traffic flow as an opportunity to increase the value of their properties.
I walked endlessly around my local streets with these arguments buzzing in my head. As I did so, I couldn’t help but notice the sheer number of expensive and very large SUVs racing around the narrow streets and blocking pavements. Later, when a handful of trial planters were installed as barriers, I witnessed these vehicles deliberately shunting them off the road – a testament to the vehicles’ power, and the anger of those driving them.
What was going on here? If you believe much of the media coverage, my community was engaged in a culture war – a seemingly intractable obstacle to anyone wishing to reduce the dominance of motor vehicles in our towns and cities.
The “war on motorists” idea gained traction on the right, and was seized upon by Rishi Sunak at this year’s Conservative party conference. But what we mean by “culture war” is rarely examined, and we must examine it if we are to overcome it. How does a “car culture” come about?
According to the government’s plan for drivers: “There’s nothing wrong with driving. Most of us use a car and, for many, life would not be livable without their car.” This is a “utility” understanding of car culture: cars are popular because people depend on them.
But, as transport researchers have argued, to properly understand why our car dependency occurs, we need to think about car consumption as what’s known as a “system of provision”, and this means understanding the complete economic and social process of making, selling and using cars. Looking at the problem this way, we notice that cars are produced at massive scale in huge plants that need to operate at all times at near full capacity to ensure profits and avoid insolvency. But demand for new vehicles in richer countries such as the UK has flatlined over the past few decades. The problem manufacturers have is that almost anyone who could possibly want or need a car already has one. How do you incentivise them to buy another one?
One “solution” has been a proliferation of bigger, snazzier and more expensive models, such as SUVs, in the past couple of decades: manufacturers compensated for sclerotic demand by increasing the value of each car sold. But how has that been possible when, in the UK, for example, real-terms average wages have also flatlined in the same period?
As my research has found, manufacturers have worked with international financial institutions to put these expensive vehicles within easy reach of more people. They have done this through a product called the personal contract purchase (PCP) – which now accounts for almost 90% of all new cars purchased by retail consumers.
PCPs replaced an approach called hire purchase (HP), where consumers opting for a car loan would make regular monthly payments until the loan was fully repaid, usually after three or four years. At the end, they would own the car outright. Under PCPs, consumers only pay back around half of the value of the vehicle. The rest of the value is reserved for a “balloon payment” at the end of the contract. The vast majority of consumers don’t make the balloon payment because they can’t afford it or don’t want to incur the expense. Instead, the vast majority swap their vehicle for a new one, and a new PCP deal.
So, whereas under HP consumers had an incentive to hang on to their cars once they owned them, PCPs encourage us to return to the new car market much more quickly. In addition, because consumers will only pay for half of the new car value, this means they can be lent more money to finance higher-value purchases. The overall effect of this can be seen in the data. Since 2009, the average amount of money extended to consumers to finance purchases, per purchase, has increased by 67% in real terms.
Of course, any lending must be repaid. Lending more money to consumers who are not getting any wealthier is a considerable risk. My analysis of credit reports associated with PCPs shows that financial markets place great value on the efforts of dealerships to ensure consumers keep up their monthly payments. For anyone in arrears, this means quickly moving towards repossession of the vehicle.
The implication of this threat should not be understated: the government is right that millions of people rely on their vehicles to function in their daily lives. But what the car industry is doing is leveraging that vulnerability to extend ever greater quantities of credit to consumers, in order to save itself from economic collapse. This strategy is not devoid of risk, however. Interest-rate shocks, a spike in unemployment, and a fall in used-car values could quickly topple this house of cards, with wider repercussions not unlike the 2007 subprime mortgage crisis.
If we want to properly understand the car culture wars, we need to know that the car industry – and its servants in Westminster – are not consumers’ friends. Public transport investment, bike lanes and LTNs are not an attack on motorists, but a helping hand out of the gilded cage that is contemporary car ownership.
Dr Tom Haines-Doran is a policy fellow at the Yorkshire & Humber Policy Engagement & Research Network, based at the University of Leeds