Rising new car prices are having a huge impact on the Average Age of Cars on UK Roads. The knock-on affect of cars being more expensive to purchase new, is that millions of people are being priced out of this market. The figures speak for themselves. Of the 34 million cars on the roads, 16 million are more than a decade old. Among these cars, 10.5 million are aged over 12 years. Consumers are holding onto their cars for longer not out of choice, but because they can't afford to buy new. If you can't afford, you don't buy!
The rising price of new cars is up 129% over the past 15 years from an average of £22,868 to £52,342. But this isn’t just down to the move to EVs, COVID or the war in Ukraine. The average diesel car is now 149% more expensive than its 2009 equivalent and the average petrol 93% more. We are told these price rises are down to inflation but this is almost a 50% above inflation across the same period. Yes, everything naturally gets more expensive but the purchase of new cars is disproportionate with other consumer goods. And what does this mean for private buyers in the UK? that alongside a cost of living crisis, many families are delaying the purchase of a new car because they simply cannot afford one.
Looking at the three most popular and affordable new cars models over the last ten years, the OTR price rose for all three exponentially since the pandemic. The cost of purchasing a Ford Fiesta rose by £3,500 in five years, whereas both the Ford’s Focus and Nissan’s Qashqai rose by a staggering £10,000 in the same time scale.
Are these tactic adopted by the car industry to generate larger profits from selling fewer units, a strategy to offset lower consumer demand? Or is this simply down to the fact these cars are more expensive to produce post-pandemic? Dare I say that its more likely that the rising costs of purchasing what was previously an affordable new car, that is potentially impacting consumer demand, prevents buyers for purchasing new. There's no wonder that demand for the vehicles has dropped through the floor forcing Ford to make the decision to cease production of two of its most popular models. Furthermore, European Car Manufacturers appear sluggish to build more affordable and smaller cars, preferring to flood the market with more expensive options that deliver better profit margins.
More worryingly is that those who hold onto cars for longer may also be making other difficult financial decisions, like cutting back on much-needed vehicle maintenance. The AA report that their patrols have attended half a million more breakdowns in the past year than the previous year. Cutting back on vehicle maintenance can prove a false economy and compromise safety. Thankfully, we have a healthy second hand parts market in the UK which ensures there is a plentiful supply of guaranteed green parts for when things go wrong.
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