Consumers Win As The Cost Of A New Car Falls By 10%

What Car? can reveal that, on average, new car prices have fallen by 10% over the past seven years. The What Car? Price Index has closely monitored price fluctuations of new and used cars in the UK for the past seven years.

The magazine’s latest survey shows that sharp competition and keen discounts have slashed the cost of a typical new car by a tenth - despite inflation rising by 17.5% between June 1998 and June 2005.

Steve Fowler, What Car? group editor, said: "Low prices on the forecourt today were sparked by a combination of the Competition Commission’s 2001 ruling that UK prices were too high, and a weak market for small cars and superminis - the two largest categories. Dealers are having to cut prices to prop up sales.

"UK buyers can get a seriously good deal on the forecourt today and, if they shop around, do their homework and haggle, they could pay up to 19% less for a typical city car than they would have paid seven years ago."

The What Car? Price Index shows that the only types of car to suffer increased prices over the past seven years are the compact executive market (cars such as the BMW 3 Series and Mercedes C-Class) and luxury car segment (Audi A8 and Jaguar XJ). Every other type of car is cheaper to buy new today than it was seven years ago.

Prices for controversial 4x4 off-roaders have fallen by 13% over the same period, contributing to their popularity. Sales of 4x4s have jumped from 98,757 (or 4.4% of the market) in 1998 to 179,439 (7% of all new car sales) last year.

Overall Price Change Of New Cars (June 1998 - June 2005)
City cars (eg Ford Ka, Kia Picanto) -19%
Superminis (eg Renault Clio, Vauxhall Corsa) - 8%
Small family cars (Peugeot 307, VW Golf) -11%
Family cars (Ford Mondeo, Vauxhall Vectra) - 5%
MPV people carrier (Citroen C8, Renault Espace) -11%
4x4 off-roaders (Land Rover Freelander, Toyota RAV4) -13%
Compact executive cars (Audi A4, BMW 3 Series) + 2%
Executive cars (Jaguar S-type, Mercedes E-Class) -11%
Luxury cars (BMW 7 Series, Lexus LS430) + 3%

Examples of new-car price cuts over the past seven years include the popular Ford Ka, Vauxhall Astra and VW Golf ranges. In June 1998, the cheapest in each range cost £8020, £11,745 and £11,995, respectively. Today they cost from £7095, £10,995 and £11,845.

With record sales in recent years and more consumers being tempted by low prices on forecourts, the number of nearly new cars available has increased dramatically, bringing prices down correspondingly. The What Car? Price Index records that average prices of one-year-old nearly new cars have fallen over the past seven years by 29%.

Overall Price Change Of Nearly New Cars (June 1998 - 2005)
City cars (eg Ford Ka, Kia Picanto) 39%
Superminis (eg Renault Clio, Vauxhall Corsa) 30%
Small family cars (Peugeot 307, VW Golf) 24%
Family cars (Ford Mondeo, Vauxhall Vectra) 34%
MPV people carrier (Citroen C8, Renault Espace) 32%
4x4 off roaders (Land Rover Freelander, Toyota RAV4) 27%
Compact executive cars (Audi A4, BMW 3 Series) 23%
Executive cars (Jaguar S type, Mercedes E Class) 40%
Luxury cars (BMW 7 Series, Lexus LS430) 29%

Steve Fowler said: "Given the longevity of manufacturer warranties together with the low prices available today, buying a nearly new car can be a very sensible decision for consumers."

24 June 2005 Staff
 
 

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