Car price inflation

[ingenieur]

Following on the heels of the long thread on 'how do people afford cars these days' I was wondering if there are any stats for car price inflation?

Can it be proved that with the introduction of PCP causing people to take up pay-monthly car ownership in a bigger way than ever before that prices for new cars have inflated more than the prices of other things?

Having not researched it, anecdotally therefore, it seems to me that prices have really rocketed in the last 10 years. Am I imagining it or is it really happening?

[Crumpet]

It doesn’t help that prior to the semi-conductor shortage list price seemed to be just a random number plucked out of the air and discounts of up to 25% brought them down to sensible levels. Seems like the discounts have now gone and list prices have shot up for a double whammy.

I’d say that 2015-2019 cars were ridiculously cheap - too cheap.

[ingenieur]

Crumpet said:

I’d say that 2015-2019 cars were ridiculously cheap - too cheap.

Potentially, my anecdotical experience of new car prices dates from 2010 to 2016. Not really looked much since then as I've been out of the industry since.

[ecsrobin]

My red GR Yaris was £34,375 in 2020 today list price went up for the 2nd time in 6 months to £36,530 (I believe this is the same for the whole Toyota UK range).

Obviously the bigger problem is you can’t actually buy one today.

So a 6% increase on RRP in 18 months.

[FA57REN]

"The contribution from second-hand cars has also changed over recent years. For example, it rose from an upward 0.01 percentage points in April 2021 to 0.36 percentage points in February and March 2022, before falling back to 0.25 percentage points in May 2022."

https://www.ons.gov.uk/economy/inflationandpricein...

[Puzzles]

Looking at my old daily from 10 years ago the new price works out at a 4% increase per year

[ingenieur]

ecsrobin said:

My red GR Yaris was £34,375 in 2020 today list price went up for the 2nd time in 6 months to £36,530 (I believe this is the same for the whole Toyota UK range).

Obviously the bigger problem is you can’t actually buy one today.

So a 6% increase on RRP in 18 months.

Hard to judge on the basis of a new model as there isn't a long history to look at.

There's some prices on here from 2010: https://www.parkers.co.uk/car-advice/2009/parkers-...

BMW 5 series from £28,165. The cheapest new 5-series on Autotrader today is £46,455 RRP. That's a percentage increase of 65%. Is that generally in line with inflation or a disproportionate increase?

[Lil_Red_GTV]

One I was complaining about on another thread (because I'm bitter I can't afford one) is the Ford Mustang GT. Launch price in 2015 was £32,995 (although I believe they put it up a bit not long afterwards). That would be £36,800 today according to the Bank of England's Inflation calculator. Actual price? £50,075.

[Dingu]

ingenieur said:

Hard to judge on the basis of a new model as there isn't a long history to look at.

There's some prices on here from 2010: https://www.parkers.co.uk/car-advice/2009/parkers-...

BMW 5 series from £28,165. The cheapest new 5-series on Autotrader today is £46,455 RRP. That's a percentage increase of 65%. Is that generally in line with inflation or a disproportionate increase?

I doubt your 2010 5 series is that comparable in spec or size to the 2022 one. So obsessing over inflation is misleading in a way.

[VS02]

Dingu said:

I doubt your 2010 5 series is that comparable in spec or size to the 2022 one. So obsessing over inflation is misleading in a way.

The F10 was only the last generation, kit was mostly the same as a bargain basement G30 will have nothing on it as standard bar an infotainment system and some pleather (Sensatec) seats. BMW are very stingy.

Edited by VS02 on Friday 1st July 14:13

[Leon R]

ingenieur said:

ecsrobin said:

My red GR Yaris was £34,375 in 2020 today list price went up for the 2nd time in 6 months to £36,530 (I believe this is the same for the whole Toyota UK range).

Obviously the bigger problem is you can’t actually buy one today.

So a 6% increase on RRP in 18 months.

Hard to judge on the basis of a new model as there isn't a long history to look at.

There's some prices on here from 2010: https://www.parkers.co.uk/car-advice/2009/parkers-...

BMW 5 series from £28,165. The cheapest new 5-series on Autotrader today is £46,455 RRP. That's a percentage increase of 65%. Is that generally in line with inflation or a disproportionate increase?

If anything it is a better way to judge since it isn't a different generation of car.

[ingenieur]

Dingu said:

ingenieur said:

Hard to judge on the basis of a new model as there isn't a long history to look at.

There's some prices on here from 2010: https://www.parkers.co.uk/car-advice/2009/parkers-...

BMW 5 series from £28,165. The cheapest new 5-series on Autotrader today is £46,455 RRP. That's a percentage increase of 65%. Is that generally in line with inflation or a disproportionate increase?

I doubt your 2010 5 series is that comparable in spec or size to the 2022 one. So obsessing over inflation is misleading in a way.

Do you really think so? I'd say a 2010 5 series and a 2022 5 series should be a similar size as BMW would keep the model in the same size class. Spec wise 2010 spec will be less technologically advanced compared with 2022 spec. But I think it's still a like for like comparison. The 2010 audio and satellite navigation would be more basic in the earlier car but both cars would have 'an audio and satellite navigation system'. And don't forget in 2010 you more than likely had an optical disc transport (i.e. DVD player) separate in the luggage area for the removable media... so potentially more costly compared with the dashboard system in the current car?

[VS02]

ingenieur said:

Do you really think so? I'd say a 2010 5 series and a 2022 5 series should be a similar size as BMW would keep the model in the same size class. Spec wise 2010 spec will be less technologically advanced compared with 2022 spec. But I think it's still a like for like comparison. The 2010 audio and satellite navigation would be more basic in the earlier car but both cars would have 'an audio and satellite navigation system'. And don't forget in 2010 you more than likely had an optical disc transport (i.e. DVD player) separate in the luggage area for the removable media... so potentially more costly compared with the dashboard system in the current car?

However I highly doubt that people are actually paying £46k for a base spec 5 series. These days the margins for haggling are much higher for cash than 12-13 years ago… I reckon the actual price to buy it would be about £37-38000.

And leasing and PCP deals make that even cheaper.

There’s a brandnew car with options on it available for £41000 which is still a ridiculous for a 4 cylinder diesel car that will be worth nothing in 7 years but seems fair based on the RRP.

[AlexGSi2000]

I have run older BMW 5 series' as daily drivers for almost the past decade, have swapped and changed when the time felt right.

I have had a few e39s, and onto my 2nd e60 - never paid more than £3k which was for my current "59" 520d sport, purchased March 21' - which I thought was a great deal (ULEZ sale).

Now, I really quite fancy an f10 530d touring, but at the moment, decent ones start from around £15+
I wonder when they will fall into bargain basement cars like the e39s and e60s did, or if they ever will?
Even decent e39s and e60s now seem to be worth more over the past year.

[ingenieur]

VS02 said:

ingenieur said:

Do you really think so? I'd say a 2010 5 series and a 2022 5 series should be a similar size as BMW would keep the model in the same size class. Spec wise 2010 spec will be less technologically advanced compared with 2022 spec. But I think it's still a like for like comparison. The 2010 audio and satellite navigation would be more basic in the earlier car but both cars would have 'an audio and satellite navigation system'. And don't forget in 2010 you more than likely had an optical disc transport (i.e. DVD player) separate in the luggage area for the removable media... so potentially more costly compared with the dashboard system in the current car?

However I highly doubt that people are actually paying £46k for a base spec 5 series. These days the margins for haggling are much higher for cash than 12-13 years ago… I reckon the actual price to buy it would be about £37-38000.

And leasing and PCP deals make that even cheaper.

There’s a brandnew car with options on it available for £41000 which is still a ridiculous for a 4 cylinder diesel car that will be worth nothing in 7 years but seems fair based on the RRP.

For the purposes of making a comparison you have to imagine the 2010 price isn't discounted either.

[ingenieur]

Leon R said:

ingenieur said:

ecsrobin said:

My red GR Yaris was £34,375 in 2020 today list price went up for the 2nd time in 6 months to £36,530 (I believe this is the same for the whole Toyota UK range).

Obviously the bigger problem is you can’t actually buy one today.

So a 6% increase on RRP in 18 months.

Hard to judge on the basis of a new model as there isn't a long history to look at.

There's some prices on here from 2010: https://www.parkers.co.uk/car-advice/2009/parkers-...

BMW 5 series from £28,165. The cheapest new 5-series on Autotrader today is £46,455 RRP. That's a percentage increase of 65%. Is that generally in line with inflation or a disproportionate increase?

If anything it is a better way to judge since it isn't a different generation of car.

The point is you can only get historical price data for the duration that model has been produced. I don't think there was an equivalent to the GR Yaris in 2010. I know they've had warmish Yari before but the new one is quite different. You could compare the prices of the ordinary Yaris if you could find data for both periods.

[Lil_Red_GTV]

I don't think you need precisely comparable cars with identical spec to draw conclusions about car price inflation. If the entry point for a particular size or class of car has risen substantially, that is inflation in car prices, regardless of whether newer cars have new tech on them (which purchasers may or may not actually want).

Also, the cost of things like sat nav and touchscreens should come down over time, balancing out the cost to some extent. Mandated active safety measures may be a different story and if those are pushing up the price of cars, that is itself noteworthy (and a legitimate concern from the perspective of affordability).

[Lil_Red_GTV]

This is ONS data on new car price inflation by year:

https://www.ons.gov.uk/economy/inflationandpricein...

I'm not a stat nerd, so may have misunderstood (happy to be corrected), but this seems to show that we are currently in a spike, and that 2010 and 2018 were also particularly bad years for new car price inflation. From about 1998 to 2003 cars got cheaper, which may be why it seems so painful since then.