Many motor traders will have observed that during the last 10 years, large increases have arisen in the average price of new cars. You may be shocked, however, at the exact amount of this increase.
Car data experts cap hpi has produced figures showing that a new car’s average cost in February 2008 was £24,383. Ten years later, this figure had significantly grown to £33,559. This amounts to a price rise of nearly 38% – a very big increase.
Factors at play
So what is behind these large price rises? It transpires that some new car manufacturers made the decision to supply expensive cars to the detriment of vehicles in the lower priced category.
Another factor is that more new diesel cars became available during the ten-year period. Diesel cars are more expensive than petrol vehicles – generally around £1,000 more. This will have impacted the past decade’s rise in costs.
Also, more SUVs are to be seen on our roads, and these vehicles are generally more costly than saloons.
Cap hpi’s data also uncovered a larger number of premium-brand vehicles sold across nearly every segment. Many brands, in fact, eliminated their entry-level range because of a lack of desirability. The basic models also experienced poor resale values in the second-hand market.
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This piece also discusses the price hike: https://www.buyacar.co.uk/cars/new-cars/610/buyers-search-for-discounts-as-new-car-prices-rise-38-in-10-years.
Costly enhanced features
Today, lots of new cars contain more technology as standard – for example, you may find satellite navigation, self-parking and better security systems. Manufacturers often roll out such features to increase the competitiveness of their products, and such amenities inevitably have an impact on the cost of a new car.
A weak pound pushes up the price of imports for automotive firms. Manufacturers, therefore, pass on their increased supply chain expenses as higher forecourt prices.
Discounting among prestigious carmakers seems to be reaching an end now. During the last two years, customers have often discovered that cars made by German manufacturers have lower costs per month than mass-market names.
The future of the UK market over the next 10 years is anyone’s guess. Notably, the second-hand market has seen a knock-on effect, since prices for used cars have risen too.a