Car prices up more than 5% since Brexit vote
The study by What Car? Magazine said a ‘perfect storm’ of rising inflation and the car industry’s efforts to increase dealer profitability has cost UK car buyers nearly £2bn in price hikes in just seven months.
The increases vary between car type with luxury cars 0.2% cheaper than they were last June but large SUVs 12.3% more expensive.
The motoring magazine said the price rises were partly a by-product of the Brexit vote, which sent the pound tumbling and consequently increased the cost of importing both cars and the raw materials that go into their production.
However, it said they are also part of a longer-term trend which has seen manufacturers gradually reduce discounts and withdraw many 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.
What Car? editor Steve Huntingford, said: “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.
“Fortunately, the aggressive sales targets that many dealers have mean you can still get a great deal if you buy from the right place.”
To help drivers get the best deal, What Car? has launched an online new car buying marketplace, which allows consumers to directly compare prices from dealers in their area.