An independent consumer motoring study conducted by Honest John has found widespread price hikes of up to 26% on many of Britain’s favourite car models, when compared to prices of similar models over the last three years.
For example, the on-the-road price of motoring staples like the Vauxhall Astra and the Nissan Qashqai are now 26% and 25% more expensive today than 2019. While some models, such as the Volkswagen Golf, have seen a comparatively small, 10% jump in price, the trend across the board is hard to refute. These numbers are sure to startle many British motorists considering the many other recent price hikes for fuel and other living essentials across the country.
There are a plethora of reasons why new car prices are on the up, but there are two which stand out to us as the most important.
It goes without saying that new vehicles should be ‘better’ than their older counterparts. With all new parts—from upgraded infotainment systems to better safety technologies—car manufacturers attempt to pack new vehicles with up-to-date tech which, of course, comes at a premium.
What’s more is that it’s not uncommon for manufacturers to favour quality over stable pricing, leading to new models almost inevitably rising in price.
The global semiconductor computer chip shortage has been a blight on most industries that have anything to do with smart technologies. Caused by a combination of staggering demand, pandemic disruptions and the 2021 draught in Taiwan (where 92% of global semiconductors are made).
Due to limited supply and ever-growing demand, the chip shortage has created long wait lists for companies who need them for their products, while simultaneously leaving little wiggle-room for buyers to negotiate discounts.
Unfortunately for motorists (and car manufacturers) modern vehicles use plenty of internal computers in everything from their nifty touch-screen systems to the essential safety of monitoring internals.
Similar trends can also be found in other raw material industries, such as the steel industry, which also has a knock-on effect on the overall price of vehicles.
It’s no secret that inflation has been running rampant since the start of the pandemic. While many countries across the world are feeling these effects, the UK is feeling them particularly hard with the pound dropping to a near two-year low.
Inflation in the UK is predicted to potentially hit double digits in the coming months or years.
The inflation of the pound is most visible for consumers in the products we buy from abroad—cars being a prime example. Thus, perhaps it is no surprise that vehicles have increased so dramatically in the last three years.
With fewer cars on the market, due to the aforementioned supply shortages, along with runaway inflation and the expectation of better vehicles, it’s hard to see the prices of new vehicles reducing in the near future.
However, one thing many have been predicting for a long time, is that the price of electric vehicles may well come down faster than the price of petrol or diesel cars. Meaning that if you’re looking for a new vehicle, electric may be the way to go.
Otherwise, the best place to snag a bargain is the second-hand market. So why not check out the astonishing range of used cars at MotorHype?
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These shortages are terrible. Between those and the lack of labor workers, things are just going to continue to be an issue. I think they will eventually sort the issue but it will likely take a few more years.