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Supply and demand.
So long as people are prepared to pay ridiculous figures for cars that drop value, instantly and at an alarming continuing rate, they'll stay high.
Good luck to anyone with the funds to comfortably afford such expense, i just find it sad that so many others obviously not so well off seem compelled to keep up.
One wonders how the coming long planned economic reset will change things.
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I agree.
I forgot to add that cash discounts have largely disappeared, so called incentives for finance are really just a classic smoke and mirrors trick.
Yes I know you can work the system, take finance and pay off virtually straight away. But why do you have to do this?
Whenever I work out how much people actually end up spending on a pcp over a now typical 4 years, I am amazed how daft some people must be.
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Most manufacturers have £3-4 ,0000 off list as offers Oct-Nov.
Subaru have TV adds saying so, Toyota are doing them as well.
Anyone fancy a Subaru Forester at £40k reduced to £36k?
Not me!
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Most manufacturers have £3-4 ,0000 off list as offers Oct-Nov.
Subaru have TV adds saying so, Toyota are doing them as well.
Anyone fancy a Subaru Forester at £40k reduced to £36k?
Not me!
Agreed - even with the offers / via brokers, a car to replace mine is still 20% overpriced. I'll stick with my 15yo car for the time being, until I either cannot afford to keep it going or it physically cannot be repaired / parts aren't available any more.
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I agree, cars have become expensive.
Some evidence comes from the discounts that can be had from brokers and for pre-reg models. EG A pre-reg Nissan Note had a list price of £16k ish and we got it for £10k as 1 day old.
An Audi A5 Convertible is on a broker site with a discount of over £12k! A standard A5 is about £10k off, an A6, £13k off.
Imagine how annoyed you would be as a customer, if you went in to a dealer and paid full price for one of these then found out you could save such a large amount of money!
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We are paying for all the extra tech and antipollution and as someone else said, to make a pcp look cheap and also the fines per gram of Co2 and or Nox and the preparation for leaving the EU, plus a bit of greed from the manufacturers.,
Barring unforseen circumstances, I made my last purchase in march 2020 and that'll see me out.
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Barring unforseen circumstances, I made my last purchase in march 2020 and that'll see me out.
Apart from a couple of elderly toys at well under £2K I made my last real purchase almost 12 years ago. I'm not sure whether it will see me out, but it might well do. I don't expect to ruin my record of having only once paid (just) over £10K for a car - about 20 years back.
Edited by Andrew-T on 10/10/2020 at 23:04
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Here’s some figures to ponder over. Bought a brand new Hyundai, end of November 2017 so in seven weeks time it will be exactly three years old. Got what I consider to be a very good deal on it with no trade in and have been very pleased with the car.
Looking at an identical model for sale, used, and just one month younger, the price it is advertised at is 79 per cent of what I paid for my brand new car nearly three years ago.
I would have thought that a three year old car would have depreciated more than 21% in that time. I know someone is bound to follow this post by saying that the asking price on the car may not be what the car gets sold for but the reason for my comment is to support the OP‘s thread that car prices have indeed gone up and so it seems has the price of used cars.
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Here’s some figures to ponder over. Bought a brand new Hyundai, end of November 2017 so in seven weeks time it will be exactly three years old. Got what I consider to be a very good deal on it with no trade in and have been very pleased with the car.
Looking at an identical model for sale, used, and just one month younger, the price it is advertised at is 79 per cent of what I paid for my brand new car nearly three years ago.
I would have thought that a three year old car would have depreciated more than 21% in that time. I know someone is bound to follow this post by saying that the asking price on the car may not be what the car gets sold for but the reason for my comment is to support the OP‘s thread that car prices have indeed gone up and so it seems has the price of used cars.
What it is selling for is not what the dealer will give you for it
The MG dealer paid £8675 for my ZS at the end of feb 2020 and it's for sale at£10995..
Get a trade in value for your car on this site and then have a think.
The sportage trade in is here 2020 sportage 1 manual petrol
If selling in part exchange, expect to receive £14,390.
For sale on this site £18000/// 25% markup
Edited by _ORB_ on 10/10/2020 at 20:01
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In 2015 the £ was trading at comfortably above 1.40 Euros : £ It is now around 1.10.
Any imports therefore will be approx 30% more expensive than 5 years ago - this does not account for inflation - the main reason being the Brexit vote.
This will of course have benefitted UK exporters and employment (in theory)
It is no surprise that cars and their trade in values have increased as a result. Short term Covid will also have materially disrupted supply chains.
As a purely personal observation I am not sure whether buying a new car (vs a 12 month old with 10-15k) makes any real sense. Encouraging people who can't really afford it to buy on PCP is a timebomb waiting to explode given the likely recession!
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Encouraging people who can't really afford it to buy on PCP is a timebomb waiting to explode given the likely recession!
And I think that this recession/ coming depression will hurt.
Our neighbours (who rent) have been on furlough but off that now and reduced hours and are struggling. Estate Agency said rent will have to be paid regardless as is still due. ...
And they are being sensible, no car debt, 6 yr old kuga, but 3 teen boys to bring up.. (and I hasten to add that mum is bringing them up nicely.)
But there will be a lot of chickens coming home to roost for the finance industry.
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My theory, right or wrong, is that the list prices are as high as they are simply to put folk off of actually ‘buying‘ the car. Much more profitable to hook punters into these leasing schemes.
The average ‘buyer‘ looks at the list price, then at the lease deal. The lease option means they can put a sw***y new German car on their drive, not taking that lease option means a 5-10 year old humdrum hatch will be in the drive instead.
Yup, nail on the head. They don’t want anyone buying these days with never-ending PCP and lease deals being more profitable. But with a bit of effort and the above options removed from the table by the customer a huge discount can be chiselled off these overinflated sticker prices. I was offered almost £10k off a new Volvo XC60 without much effort recently and that is a highly desirable model which isn’t sitting around in big numbers at dealers.
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A few items of note
With the impending recession and car prices increasing faster than inflation, the new Dacia line up for 2021 (new Sandero, Sandero stepway and Logan) should sell like hot cakes.
They do expect a waiting list once the Sandero hits the streets of the UK as it’s likely to be priced from £7995 which will make it a bargain compared to anything else especially with a more modern design and more space inside.
Factory closures earlier this year and the shortage of stock has sustained high prices for some models
The traditional volume manufacturers (Citroen, Vauxhall, Ford, etc) no longer go for volume with most models and push PCP heavily.
A case in point, Ford Focus.
I got a fantastic price lease deal but know of others who are paying £40-70(!) more on PCP for near identical car (titanium trim in the hatchback body, mine is an estate).
I ask them why and the answers are also identical ‘always had Ford, swap it for a new focus every 3 years, never had a problem’
They are the worst kind of consumer, returning to the same dealer, taking whatever is offered.
While this type of consumer exists, the PCP game and with it high list prices won’t change,
I will add, I do know of another person who has purchased a brand new (not pre reg) Fiat Tipo 1.4 hatchback for £10995.
Now that’s a bargain cash price for a decent mid size hatchback.
Edited by daveyK_UK on 11/10/2020 at 09:08
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In the late 1990s - fortuitously at around the time I was in the market for my first ever brand new car - the UK had become a bit fed up with the prices of EU produced cars in the UK market compared to the lower prices for the same models in the EU. Our representations succeeded and for a good few years new cars were affordable here. Quite apart from all the other factors that have been suggested above, I dare say that our exit from the EU has enabled manufacturers to justify reintroducing some form of price differential for the UK market. No more favours for us recalcitrant Brits and we can no longer expect equal treatment to EU member states.
I have absolutely no evidence for my theory. I just think it’s the way things work. Fortunately the price of new cars is no longer a particular concern for me, having given up driving. SWMBO who now does all the driving will happily soldier on with her car until mounting repair costs force her to consider changing. By that time I shall have saved so much in motoring costs that (hopefully) a replacement - whether new, pre-reg, used, PCP, lease or whatever - will be affordable. I don’t know about others, but I’ve saved a good deal during lockdown purely by having nothing to spend it on and I would love to have the option of choosing a new car again now.
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A I do know of another person who has purchased a brand new (not pre reg) Fiat Tipo 1.4 hatchback for £10995. Now that’s a bargain cash price for a decent mid size hatchback.
The TIPO is a good looking car. Shame the engine is a bit lethargic and the multimedia system is definitely from a couple of generations back.
Edited by Zippy123 on 11/10/2020 at 18:01
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“ The TIPO is a good looking car. Shame the engine is a bit lethargic and the multimedia system is definitely from a couple of generations back.”
Good value compared to Focus sized rivals, in fact cheap compared to most superminis these days but makes no sense compared to a good used Toyota Auris, Mazda 3 or Honda Civic in my opinion. All three are better made, will last longer, be better on fuel and drive better than the Fiat. That’s where I’d put £11k and you’d get far more of it back again after 3-4yrs than you would with a new Fiat.
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I remember quite a lot of folk importing new cars in the late nineties from other European countries due to the savings available. My workplace car park resembled a VW dealers, mostly Golf and Bora tdi’s. As I live in NI quite a few were purchased In ROI with different spec’s from UK cars. I remember looking at a SEAT Toledo but the Irish version was only available in 90bhp whereas my local dealer had the 110bhp version ( I ended up buying a one year old 1.8 20v petrol).
I’ve always been a used buyer. I used to enjoy reading Used Car Buyer magazine. IMO all of the car magazines today are too focused on new cars but I suppose that’s what most folks want!
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I actually disagree about the multimedia system. I though it was decent as it was simple to use, no complicated menus or hard to find settings.
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To my utter shock , I meet someone today driving a nice 70 plate Fiesta Titanium X.
They have got the car on a PCP and effectively are paying £21k for the vehicle (including a discount!) unless they had it back after 3 years and 18,000 miles.
£21k with discount for a Fiesta - insane!
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£21k with discount for a Fiesta - insane!
There are several threads ongoing at present where numerous posters seem to be out of touch with the present reality where new car prices are concerned.
The truth is that over the past 10 years average car prices have inflated by well over 20%. www.statista.com/statistics/286563/consumer-price-.../ Part of this must be due to the falling value of the pound given that most of our cars are either imported or have a major content of imported parts.
A fair chunk of the fall in the pound was down to Brexit fears with worse to come If there is no deal with the EU before the end of the year. You can add another instant 10% hike to car prices unless the manufacturers manage somehow to absorb their increased costs.
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My 2014 Manual of car prices showed a Honda Jazz mid range (ES manual 1.4) at £13,700
Now over £22k..
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...I paid £10,500 cash (haggled discount) for a new 1.2 Hyundai i10 Premium inc. metallic paint just less than 5-years ago.
They're slightly over £16,000 (inc. metallic) now with the N-Line closer to £17K!!!
4.6% for a PCP – er, no thanks. Might look again when its 0% (only Skoda doing 0% across the range at the moment?) which it surely must become towards the year-end as we approach financial armageddon...
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People still see the Fiesta as a supermini city runabout, but it is now the same size as the Mk1 Focus. Anyone who bought a Fiesta 20 years ago is probably still buying them, not realising how big the car now is.
My dad had Fiestas for 30 years, but when he retired from being a driving instructor it was at the time the mk7 was launched and he said then it was too large.
It's great piece of marketing to keep the name for 45 years, but make it a larger, more expensive and still sell them in their hundreds of thousands.
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People still see the Fiesta as a supermini city runabout, but it is now the same size as the Mk1 Focus.
This is normal 'size creep' which always happens. After many years with Peugeots, starting with 205s (which were much the same as Fiestas) and 306s, when I swapped my last 306 for a 207 I found they had almost the same footprint (for non-Peugeot addicts, the first digit indicates the position of the model on the size ladder). No doubt some of that gradual expansion is to accommodate stuff like crash protection, but I'm sure much of it is to give the image of 'more car for your money'.
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Serious point
Anyone who is paying £21k for a ‘discounted’ fiesta is part of the price increase problem that surely will come crashing down.
I don’t think the new car price crash will be caused by demand as PCP will keep it going; what will cause the car price Increase crash will be used values dropping.
When enough people end up in either significant negative equity or dealers and finance company’s have assets being returned considerably below the GFV ; then prices will be pressured to fall as they can’t create false demand for used vehicles and people won’t stomach paying a high PCP rate simply because the dealer has over inflated the price of the vehicle.
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It's called inflation. Since 2008 an enormous amount of money has been printed (not actually, of course. 'Money', apart from a few metal discs and plastic notes is an imaginary concept). So far it has been available only to a tiny number of people, but some is gradually spreading.....although usually wealth trickles back to the already wealthy. It is surprising that mass produced basic cars have not behaved more like basic TVs, computers and cameras by coming down in price relative to income more than they have. I've lifted this from t'internet.........
According to a copy of Motor, October 1948, the Ford Anglia was the cheapest four-wheel car in Britain. In 1950, the Anglia – an ancestor of the current Ford Focus – would have set you back £310, the equivalent of £10,703 in today’s money.
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It's called inflation. Since 2008 an enormous amount of money has been printed (not actually, of course. 'Money', apart from a few metal discs and plastic notes is an imaginary concept). So far it has been available only to a tiny number of people, but some is gradually spreading.....although usually wealth trickles back to the already wealthy. It is surprising that mass produced basic cars have not behaved more like basic TVs, computers and cameras by coming down in price relative to income more than they have. I've lifted this from t'internet.........
According to a copy of Motor, October 1948, the Ford Anglia was the cheapest four-wheel car in Britain. In 1950, the Anglia – an ancestor of the current Ford Focus – would have set you back £310, the equivalent of £10,703 in today’s money.
Won't run a satnav or radio as only 6v system.. :-)
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It is surprising that mass produced basic cars have not behaved more like basic TVs, computers and cameras by coming down in price relative to income more than they have.
No its not.
Those items have benefited from the revolution of microelectronics which totally transformed their cost of manufacture. Cars have to a small extent and also from more automation in manufacture but they are vastly more complex than 50 years ago which overshadows any gains.
Everyday items of clothing (not the posh stuff) are vastly cheaper in real terms because they are made overseas wherever the cheapest labour exists instead of in the UK. The complexity of manufacturing cars has meant they don't benefit from that either.
Edited by misar on 13/10/2020 at 13:48
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One of the critical factors in ongoing cost (not price) reduction is related to the lifecycle of the industry. Industrial organisation economists talk about the structure/ conduct ( ie business strategy/ performance paradigm. In other words the nature of the industry and in particular the number of manufacturers is related to their strategy, successful or otherwise, and in turn their business performance.
New technologies, process innovation etc drive efficiency and hence reduce costs. in turn successful companies drive out or acquire the less successful and become bigger. Consequently they get bigger economies of scale. So the SCP paradigm is a circle. A chap called Henderson in the 1960s was undertaking consultancy work in companies such as Boeing and Rockwell. His analysis showed that for every cumulative doubling of output there was the opportunity, not the right, to reduce costs by anything up to 30 or even 40%. Bruce Henderson then used this principle to set up his own consulting business, The Boston Group famous for is tool - The Boston Matrix. This incorporates the so called Boston effect.
if we consider the automotive sector then the industry kicked off in the late C19, electronics is largely a post WW2 revolution. The Boston effect diminishes very quickly, doubling cumulative output from 1 to 2 is much different when measured in millions, hence in a well established industry learning effects and cost reduction opportunities diminish, not only that as markets fill then output becomes constrained.
automotive is further down the curve than electronics but opportunities for cost reduction through driving SCP are limited. The difference is that we have seen the effect on electronics more recently, which has produced the discussion above. Of course it is happening all the time with manufactured products. The classic studies have been undertaken by the Harvard Business School by academics such as Michael Porter and Katherine Harrigan in industries such as thermionic valves. But you only have to look at areas such as solar panels to see this at work.
Remember though that cost reduction does not necessarily mean cheaper products, although me paying £850 for a 32in tv some years ago looks daft now. But when it comes to price anybody who has bought an Apple product might understand the distinction between cost and price. But then Apple don’t compete in terms of volume/market share, but that is another discussion.
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I accept all the points raised but stand by my assertion.
A New Ford Fiesta with a discount for £21,000 is a complete rip off.
I don’t blame Ford or the dealer.
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I accept all the points raised but stand by my assertion. A New Ford Fiesta with a discount for £21,000 is a complete rip off. I don’t blame Ford or the dealer.
Yes it is.
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I accept all the points raised but stand by my assertion. A New Ford Fiesta with a discount for £21,000 is a complete rip off. I don’t blame Ford or the dealer.
It's not a rip off if so many people are prepared to pay it to have one when there is ample alternative choice, having created a model people desire so charge what you like basically, VW have the same magic touch with Golf.
No one is forced with menaces to cough up as with taxes or the TV licence.
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I accept all the points raised but stand by my assertion. A New Ford Fiesta with a discount for £21,000 is a complete rip off. I don’t blame Ford or the dealer.
As it stands that is a meaningless statement. The current Fiesta price list (recommended on the road) ranges from £16140 to £26500.
FWIW even the base model (Trend) is a well specified package with standard items that would have been expensive extras a few years ago. Ford need to sell their cars in a competitive market so presumably that is what their buyers want.
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About a month ago, i mentioned how I had looked at the price of a brand new Suzuki Ignis around the end of 2018, and the price was £9,999. Then a month ago, shocked to see the new price has gone up to £13,999 for the lowest spec model.
Looked again today, and the price has gone up again to £14,249, so another £250 increase in just one month ( 43% in 2 years).Also they have the both new prices for the outgoing swift model for £14,500 and the brand new swift for a whopping £17,750.
Small cars which say 10 years ago, may have been £8000- £10,000 now doubled in price,crazy.With a pandemic with no end in sight, economic chaos and now to add to it all, a no deal brexit,you would have thought huge never ending price rises would be the worst policy ever in order to increase flagging demand
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