New car prices rise again, but buyers still get more for less

The list price of the average new car rose by 1.4 per cent, year-on-year, to the end of October 2005, equivalent to a rise worth £182. The findings, published by EurotaxGlass’s in the monthly Glass’s New Car Market Trends report, point to a continued modest increase in new car prices, albeit at a rate that remains below that of UK inflation as a whole (the Retail Prices Index currently stands at 2.5 per cent).

The sector that has seen the greatest increases is the lower-medium sector (Ford Focus, Vauxhall Astra, etc), with an average list price rise of 3.2 per cent, or £396, over the past 12 months. At the other end of the spectrum, superminis (Vauxhall Corsa, Renault Clio, etc) have seen list price reductions worth 1.4 per cent, or £130, on the average car.

"Current low levels of list price inflation are particularly noteworthy given the continuous improvements being made to vehicle specifications, as well as the growing physical dimensions of new cars in most sectors," comments Alan Cole, Editorial Consultant for the Glass’s Market Intelligence Service. "Buyers are effectively getting more for less. However, demand is simply not strong enough to enable vehicle manufacturers to increase prices in response to rises in steel and energy costs."

He continues, "Dealers are caught between a rock and a hard place. Retained margins of 1 per cent or less on the selling price of a new car are the order of the day, and new car profitability is still in decline. This all means there is very little room to offer further discounts on new cars and, with finance deals already very attractive, retailers have to be increasingly imaginative to secure consumer interest."

Headline figures

There have been year-on-year list price increases at or beyond the 1.4 per cent market average in the following sectors:

Lower-medium (Ford Focus, Vauxhall Astra, etc): up 3.2 per cent
Upper-medium (Vauxhall Vectra, Ford Mondeo, etc): up 3 per cent
Large Executive (BMW 5 Series, Audi A6, etc): up 1.4 per cent

Below average rises, or falls in list prices have been seen in the following sectors:

Compact MPV (Renault Megane, VW Touran, etc): up 1.1 per cent
Large MPVs (Ford Galaxy, Renault Espace, etc): up 1.1 per cent
Compact executive (Audi A4, Mercedes C-Class, etc): up 0.2 per cent
Sports Utility Vehicle (Toyota RAV-4, Land Rover Freelander, etc) down
0.2 per cent
Supermini (Vauxhall Corsa, Renault Clio, etc): down 1.4 per cent

The biggest list price changes

The single largest list price rise during October was for the Lexus SC430, which increased by £1,993 to £53,905. The greatest list price fall was for the Toyota Corolla Verso 1.6 VVT-i T2 MPV, which had a reduction of £505 to £13,297.