THE AVERAGE price of a new car has increased by 38 per cent over the course of the past decade, according to Cap HPI.
Analysis conducted by the automotive data company shows that the average amount of money customers pay for a new car rose from £24,383 in February 2008 to £33,559 in February 2018.
In the past 10 years, there has been a massive leap forward in the technology that is fitted to cars, with features such as satellite navigation, self-parking, autonomous emergency braking and adaptive cruise control now commonplace among the latest models.
However, Cap HPI argues in its data analysis that while the advancement of automotive technology is undeniable, manufacturers fit many of these features to these cars as standard in order to make their products more competitive, so this likely isn’t the reason for the increase in cost.
In addition, the data shows that there are more premium brand cars across every segment and that these brands are experimenting by creating new segments. The overall expansion of diesel engines has also been a factor, as these units cost an average of £1,000 more than their petrol equivalents.
Matthew Freeman, managing consultant at Cap HPI, said: ‘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 on our roads and they are usually more expensive than the equivalent saloon.
‘Many brands have moved to offer a more luxurious specification mix and eliminated their entry-level specifications. This is partly a response to PCP 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.’
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