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New Car Prices Have Risen by a Quarter Since 2019

by on May 25, 2022 in Advertising, Business

The UK is experiencing economic strife on multiple fronts, as international instability and domestic policy have combined to create a perfect storm of rising household costs. Fuel prices have increased to their highest-ever levels due to shortages and a ban on the importing of Russian oil, while Brexit-related shipping issues have exacerbated a growing inflation crisis in relation to household goods.

But economic volatility does not stop with raw materials and supply; entire industries are beginning to see their own brand of difficulty, with the automotive industry in particular representing a significant uplift in cost to consumers. According to a recent report, the retail cost prices for certain new vehicles have appreciated significantly – some by as much as 26%.

New Car Prices Skyrocketing

A number of popular models of cars, as produced by several major manufacturers, have seen their retail price grow in a relatively small window of time. Between 2019 and 2022, a majority of new vehicles became more expensive to buy new, with the Vauxhall Astra topping the list of the most inflated prices. 

Where the Astra sold for a list price of just under £19,000 in 2019, 2022 saw its price hiked to £23,805 – a 26% increase. The Nissan Qashqai was a close second with a 25% appreciation in price, while the Ford Fiesta, Fiat 500 and Kia Sportage saw between 17% and 19% price inflation. 

Running Costs Also Increased

The appreciation in price comes alongside growing pressures on households relating to the running costs of vehicles. The increase in the cost of petrol and diesel has hit many driving households hard, while insurance costs have also increased significantly in recent years – despite recent action by the Financial Conduct Authority to prevent insurers levying a ‘loyalty penalty’ on existing customers. 

As the costs attributed to car ownership continue to rise, hard-up households are looking for alternative means of access to a personal vehicle – i.e.: by leasing a new car with better fuel economy. The recent viability of electric vehicles (EVs) has presented consumers with a zero-carbon option for transport, saving on fuel costs and also potentially saving on maintenance costs overall. However, EVs are significantly more expensive up-front than fossil-fuelled cars, making for another barrier to entry for struggling consumers.

Recent Market Volatility

There are many factors that can be attributed to the increase in list price for popular makes of vehicles in 2022, but perhaps the biggest factor was the protracted shortage of microchips that began in 2020. With a global shortage of vital semiconductors, vehicle manufacture was slowed globally – leading to a showroom shortage, and an increase in the cost of second-hand vehicles due to high demand. Even with car manufacturers ramping back up to pre-pandemic levels, demand is higher than supply, resulting in increased overall prices.

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