Member Article

Buy2LetCars aims to drive down student debt

Most parents greatly underestimate the levels of debt their child will leave university with, a survey by Buy2LetCars has discovered.

The survey of UK adults by the firm, which operates a vehicle leasing model funded by individuals instead of financial institutions, found that 24% of parents believe their child will leave university with less than £10,000 worth of debt, while the same percentage, 24%, believe their child will leave university with between £20,000 to £30,000 worth of debt.

Only 15% estimated their child would leave university with £50,000 worth of debt or more, which is closer to the £50,800 the Institute of Fiscal Studies predicts the majority of students in England will graduate with.

In addition, 61% of parents believe there is not enough financial advice on student loans available to students and parents, just 15% believe there is adequate advice and 24% were unsure.

The survey also revealed parents’ biggest concern about higher education was their child leaving university with high levels of debt, with 36% noting this as their biggest worry.

Paula Edwards, Marketing and Communications Manager at Buy2LetCars, comments: “We are surprised to learn how greatly the majority of parents underestimate the burden of student debt. Many are simply unaware of the costs and the interest charges students accrue, which begin adding up as soon as their course begins. This can really push up levels of debt way before students have even graduated. The results of the survey show that there is a real need for better education and information relating to the costs of a university education and the levels of debt that graduates can expect.

“We are pleased to see that 50% of parents are already saving towards their child’s education. In fact, 19% have already saved more than £50,000 towards their children’s education. It is also excellent to see that many are making preparations and turning to alternative investments to grow their savings, like peer to peer lending, with 25% choosing this method.

“Many of our investors at Buy2LetCars are parents or grandparents who are using our high returns to grow their money to pay for education costs. Our survey has discovered that 38% believe having a monthly return on their investment, as well as lump sum at the end, is beneficial, as it allows them to pay towards university costs in monthly installments.”

Buy2LetCars, based in Godstone, Surrey, operates a people to people lending scheme that delivers up to 27% return on the original amount loaned over three years by purchasing and leasing out cars via its leasing arm Wheels4Sure.com. The company also questioned parents on the financial preparations they have made to support their child through higher education, discovering that the majority - 51% - have started to save towards their child’s education costs, compared to 49% who have not yet begun saving for this specific reason.

Of those that have not started saving for higher education, 16% said they are saving towards their child’s immediate future, 13% said they did not expect their child to attend university and 9% said they plan to in the future, while 6% said they could not afford to save towards education and 3% said they were saving towards their child’s first home.

The top three methods of growing money to pay for education costs include alternative investments, including peer to peer lending, wine and vintage cars (26%), investing in buy-to-let property (22%) and having a mixed portfolio (20%), including savings accounts, ISA, buy-to-let property and other investments.

Buy2LetCars’ sister company Wheels4Sure works with 14 manufacturers, including Mercedes-Benz, Fiat, BMW, smart, Vauxhall and Jeep, and its success has led to its inclusion in the prestigious Fleet News FN50, the list of the UK’s top 50 leasing companies along with a 97% satisfaction rating on The Review Centre.

For more information please visit www.buy2letcars.com.

This was posted in Bdaily's Members' News section by Sarah Ross .