Car prices still rising despite euro pledge

11:02am Wednesday 5th December 2001

CAR prices rose slightly this year after Government attempts to narrow the gap between the cost of cars in the UK and the cost of cars in the rest of Europe.

The average price of a new family car rose by £180 in 2001, but car buyers should expect a further 2.1 per cent hike in transaction prices during 2002 according to independent price monitor, CarPriceCheck.

Manufacturers' on the road list prices increased by nearly two per cent but the added costs, like registration, delivery, and 12 months road fund licence meant the actual cost of buying a car increased by 1.28 per cent.

As a whole, the UK car market, which takes into account franchised dealers, internet retailers and European importers, recorded a one per cent rise in the actual cost of buying a new vehicle.

Steve Evans, CEO of CarPriceCheck, said: "Car prices have yo-yoed all year. On average a fifth of all models available on UK forecourts go up or down every month. The net effect has been a small rise."

He added: "Generally speaking though, dealers have been sharpening their pencils throughout the year offering competitive deals to the consumers where and when they can. There have been good months to buy, and some bad months."

Mr Evans said the pressure put on dealers to offer cars at a more competitive rate was a reason behind the small rise in prices.

He said: "The big concern is the pinch dealers are feeling in order to remain competitive. Based on this year's figures, sales may be up, but profit margins have effectively been reduced by just over 8 per cent on a new car."

He added: "Over time, this level of discounting may not last, and with global pressures on the motor industry mounting, the signs are that transaction prices will increase by around 2.1 per cent during the course of next year."

Exchange rate pressures pushed prices of imported cars from Europe up by one per cent.Price of a new family car up by £180 according to watchdog and set to increase further CAR prices rose slightly this year after Government attempts to narrow the gap between the cost of cars in the UK and the cost of cars in the rest of Europe.

The average price of a new family car rose by £180 in 2001, but car buyers should expect a further 2.1 per cent hike in transaction prices during 2002 according to independent price monitor, CarPriceCheck.

Manufacturers' on the road list prices increased by nearly two per cent but the added costs, like registration, delivery, and 12 months road fund licence meant the actual cost of buying a car increased by 1.28 per cent.

As a whole, the UK car market, which takes into account franchised dealers, internet retailers and European importers, recorded a one per cent rise in the actual cost of buying a new vehicle.

Steve Evans, CEO of CarPriceCheck, said: "Car prices have yo-yoed all year. On average a fifth of all models available on UK forecourts go up or down every month. The net effect has been a small rise."

He added: "Generally speaking though, dealers have been sharpening their pencils throughout the year offering competitive deals to the consumers where and when they can. There have been good months to buy, and some bad months."

Mr Evans said the pressure put on dealers to offer cars at a more competitive rate was a reason behind the small rise in prices.

He said: "The big concern is the pinch dealers are feeling in order to remain competitive. Based on this year's figures, sales may be up, but profit margins have effectively been reduced by just over 8 per cent on a new car."

He added: "Over time, this level of discounting may not last, and with global pressures on the motor industry mounting, the signs are that transaction prices will increase by around 2.1 per cent during the course of next year."

Exchange rate pressures pushed prices of imported cars from Europe up by one per cent.

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