Buyers search for discounts as new car prices rise 38% in 10 years

New car price hike blamed on technology and diesels

Murray Scullion
Feb 28, 2018

Demand for luxury features has pushed the price of an average car up by 38% in ten years, according to figures from an automotive analysis company.

The average on-the-road price of cars has hit £33,559 in February 2018, ballooning from £24,383 in February 2008. Although these prices don't take into account money-off offers that reduce the cost of a brand new car, or deals such as scrappage schemes, it does show a shift in spending culture among buyers.

According to data analysis experts at cap hpi, these high numbers have risen because of increased technology and safety ratings associated with modern cars, and an increased desire for premium brands like Audi, BMW, and Mercedes-Benz.

Manufacturers roll out increasingly safer and technologically advanced cars as they seek to improve their product, but that means that they cost more money too.

Matthew Freeman, managing consultant at cap hpi, says: ‘The real driver of this is the changing structure of the marketplace. Over the past decade, we’ve seen more expensive models being rolled out. We see more SUVs (Sport Utility Vehicle) on our roads, and they are usually more expensive than the equivalent saloon.’

The data also reveals that premium brand cars are more prevalent than ever. For example, Mercedes-Benz had increased sales of 6.6 per cent from 2016 to 2017 in the UK.


The expansion of diesel ranges has also driven up the average price of a new vehicle, as diesels are around £1000 more expensive than the equivalent power petrol version.

Freeman adds: ‘Many brands have moved to offer a more luxurious specification mix and eliminated their entry-level specifications. This is partly a response to PCP (Personal Contract Plan) making cars more affordable, and consumers moving up to more expensive models. It’s also worth noting that those base models were not especially desirable in the used market, and had poor resale values.

‘PCP has also shifted focus from the entry price to the monthly repayment and having a model to advertise as ‘From £9,995’ is no longer a priority – cars are more likely to be advertised on their monthly payment.’


Managing Director of BuyaCar, Austin Collins, says: ‘These findings aren’t a surprise to us. Demand for the latest technology and premium eatures will inevitably increase the cost of a new car. That's why buying nearly new can save thousands of pounds, while still offering the safety and technology benefits of brand new cars.


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