Motorists feel £2 billion sting as car prices soar

  • Prices have risen by 5.2% on average since UK voted for Brexit
  • UK consumers charged £2 billion more in just seven months
  • Fewer cars on offer at benchmark £200 per month
  • Despite this, good deals still available if buyers are shrewd
  • Some cars actually cheaper than they were last June
  • New What Car? car buying marketplace launched to help consumers get best price

What Car? is urging consumers to fight back against surging new car prices in the wake of last summer’s historic Brexit vote to leave the European Union.

A ‘perfect storm’ of rising inflation and the car industry’s efforts to increase dealer profitability has cost UK car buyers nearly £2 billion* in price hikes in just seven months, according to independent research carried out by the consumer title. However, it insists great deals are still available if you know where to look.

While prices have risen by an average of 5.2%** in the past seven months, the situation varies greatly from sector to sector; luxury cars are actually 0.2% cheaper than they were last June and executive saloons just 0.8% more expensive, whereas performance cars and MPVs now cost 8.4% more on average and large SUVs 12.3%.

These increases are thought to be partly a by-product of the Brexit vote, which immediately knocked the value of the pound and consequently the cost of importing both cars and the raw materials that go into their production.

However, they are also part of a longer-term trend which has seen manufacturers gradually reduce discounts and withdraw many of the most appealing 0% and low-rate interest finance deals as they seek to regain control of profit margins.

Vehicles costing less than £200 per month – the holy grail for many car buyers – now make up 9.9% of the market, compared with 13% seven months ago, with the same deposit in each case. But What Car? says great deals are still available in all sectors, and it has launched a new online car buying marketplace to make it easier to find them.

Biggest discounts by segment Discount Lowest APR finance deals by segment* Best TP Finance Offer
City cars Fiat Panda 1.2 Pop 26.8% Smart Fortwo Coupe range 3yr 0% APR PCP with a £140  deposit
Small cars Seat Ibiza 1.0 SE Technology 3dr 24.7% Mazda 2 range 3yr 0% APR PCP with a £750 deposit
Family cars Citroen C4 range 24.0% Skoda Rapid Spaceback range 3yr 0% APR PCP with an £1800 deposit
Executive cars Volvo S60 T4 190 SE Nav [Leather] 21.4% Lexus IS range 3yr 2.9% APR PCP with a £3000 deposit
Luxury cars Mercedes-Benz S350d L SE 9G-Tronic 19.2% Mercedes S-Class range 3yr 0% APR PCP with a £8443 deposit
Estate cars BMW 535d Luxury Touring Step Auto 22.6% Skoda Octavia Estate range 3yr 0% APR PCP with a £2000 deposit
MPVs Citroen C3 Picasso range 30.0% Ford S-Max Vignale 3yr 0.9% APR PCP with a £1000 deposit
Small SUVs Renault Captur 0.9 TCE 90 Expression+ 11.8% Skoda Yeti SE and SE L 3yr 0% APR PCP with a £1500 deposit
Large SUVs BMW X5 xDrive50i M Sport Step Auto 12.7% Jeep Cherokee Limited 3yr 0% APR PCP with a £2750 deposit
Coupes BMW 650i Sport Gran Coupe Auto 22.1% BMW 6 Series SE and M Sport Coupe 3yr 0% APR PCP with a £0 deposit
Convertibles BMW 650i Sport Convertible Auto 23.6% BMW 6 Series SE and M Sport Convertible 3yr 0% APR PCP with a £0 deposit
Performance cars Mercedes CLS 63 S Tip Auto 18.6% BMW M6 3yr 0% APR PCP with a £0 deposit

 

“We knew average prices were going up, but rather than a gradual rise, our research has shown that there has been a perfect storm of elements that has conspired to create a big bang in price hikes,” explained What Car? editor Steve Huntingford.

“Fortunately, the aggressive sales targets that many dealers have mean you can still get a great deal if you buy from the right place. Our new car buying marketplace saves you the hassle of shopping around, letting you configure a car to your desired spec and then directly compare prices from dealers in your area.

“In addition, all deals are shown alongside a What Car? Target Price, which is the most our team of mystery shoppers think you should have to pay for a particular model. This makes it even easier for buyers to see whether a deal represents good value.”

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