Will car prices go down UK?

Will car prices go down UK?

Will car prices drop in 2023 UK?

No, say experts Published duration 24 January 2023 Related Topics Brexit

Image copyright Thinkstock. Theresa May's government claims Brexit could lead to an immediate crash in car prices. One industry insider says "we're all being hysterical" - but others predict more of a wait until next summer, if the UK is a no-deal Brexit on 31 October. There has been no official government advice from its Department for Transport and the Department for International Trade on Brexit-related issues - only from the Department for Exiting the EU. When asked, it refused to comment. The government has said Brexit should not put pressure on the motor industry and claimed it will continue to subsidise the industry. However, there are some doubts about the effectiveness of those promises, with one business source suggesting the government is not prepared to meet its end of the bargain. Brexit: Latest developments. Image copyright Getty Images image caption Will Brexit put pressure on the car industry? On Wednesday, Mrs May wrote a letter to European Council President Donald Tusk, claiming Britain would walk away from talks if the EU continues to "cherry pick". The prime minister said: "We have no wish to leave without a deal on the day after the UK's exit date, but we will not accept any terms or conditions that do not meet the needs of UK businesses and employees." But European Commission President Jean-Claude Juncker was unimpressed by her "threatening" language. He tweeted that he had spoken to Mrs May to reassure her that the EU had no interest in cherry-picking UK industries or sectors. As reported by the BBC, Mr Juncker told Mrs May he had advised his team to be "very careful" on how they handled Brexit negotiations with the UK. How much cheaper will cars get? A spokesman for the Department for Transport and the Department for International Trade (DIT) said the two departments were working together to plan for different outcomes from Brexit. "The UK's automotive sector has been built on success and we expect the sector to continue this growth when we leave the EU," he said. "Our focus has always been to ensure that we continue to invest in supporting a strong and competitive industry that can benefit our economy and provide a good return for taxpayers.

Should you wait until 2023 to buy a used car?

The question you're probably asking right now is, "Should I wait until 2023 to buy a used car?". If you're in the market for a used car, you probably think that a decade's time makes no difference. After all, the only difference between buying a car now and buying a car in 2023 is the price tag. And while prices of new vehicles tend to go up, the rate of increase is slower than that of inflation.

You might be tempted to think that a decade's time would make little difference. But research by Edmunds.com says that you're dead wrong.

The research showed that the cost of buying a vehicle in the next 10 years would be significantly higher than it is today. The study found that a vehicle's depreciation rate increases by 1.5% every year.

In short, buying a used car in the next 10 years will cost more than buying one now. And the price hike won't be a few dollars either.

Edmunds looked at the depreciation rates of vehicles that were purchased in 2023 and then sold in 2023, as well as those that were purchased in 2023 and sold in 2023. It found that the depreciation rates of these vehicles increased by approximately 1. And even if you buy a car in the next 10 years, your car will still depreciate at a rate of about 1.5% per year. In other words, if you wait until 2023, your car will be worth about the same as if you bought it today.

Your Mileage May Vary. You can expect your vehicle to depreciate by about 3% a year. So if you drive 10,000 miles per year, your car will lose value at the rate of about 30 cents a mile.

However, some people drive considerably more miles than others.

What will happen with car prices in the future?

will car prices drop in 2024

Are they going to continue to fall as oil prices fall or will they begin to rise? We have seen that for many years car buyers were able to choose between small and big cars but now that the price differences are so great, with some new vehicles being nearly half a million dollars compared to others, what effect can this have on buyer preferences.

In previous articles we discussed the importance of fuel price impacts on purchasing decisions, we covered the factors that must be considered when selecting a new vehicle and we looked at how the economic crisis and the change to the fuel standards have changed things. Now let's look at the impact the price differential has on individual car buyers preferences.

There is a strong tendency for motorists to try to make their car more fuel efficient by buying more expensive cars with the expectation that this will mean they will pay less in fuel costs at the pumps. This could be seen from the fact that people who are buying large SUVs are often in a position to purchase larger cars than the people buying small sedans or passenger vehicles. What is being asked in this article is whether this is an optimal choice. It might seem to be logical to buy the big car and expect it to run on cheap fuel but what happens if fuel prices were to go up? What would happen to the market for compact SUVs, big sedans and big cars and will they grow or shrink? If the market shrinks, then will the large SUV manufacturer suffer more than the smaller car companies?

Car buyers want more efficiency. When the new fleet average emission standards came into force in September 2023, many commentators were predicting that the increase in the maximum engine size would lead to fewer sales. The argument was that people would favour the larger engine, because with the same fuel efficiency they would have a better range or would have saved on the number of fill-ups and at the same time be able to fit in more passengers. This appears to be very true in the past year. According to Edmunds.com in the first quarter of 2023 about 15 per cent of new vehicles sold were heavy duty pickups and vans while only 9 per cent were light duty sedans or coupes. The other 84 per cent of vehicles sold were light duty small cars, compacts and minivans. What we may be seeing now in the USA market is an evolution from small cars to big cars.

Will car prices go down UK?

If not, should they?

New car pricing is now an increasingly polarised topic. The average car price in the UK has risen above 25,000 for the first time and we're starting to reach the end of what is likely to be another bumper decade for the motor industry.

I would say the last 10 years have been great for motoring in that the cost of owning a new car has largely fallen, in absolute terms. In fact, you can argue that the real cost has only gone up over the past few years, as many people are buying cheaper models.

Prices of existing cars have been cut and now more than ever it seems that owners can pay less to keep their car running. So the general feeling I get from talking to other drivers is that the big problem is that too many of them feel unable to afford a new car, especially at the mid-range level.

As prices in the UK have gone up, demand has become more inelastic as more and more people are being squeezed out of the car market and the UK's population isn't expected to start increasing until 2023, leaving everyone wanting even more cars. But does that mean prices have to rise as well? We can see what's happened with US car prices, which have soared, largely driven by the drop in energy prices. In the 1970s they were below 1,000, but then the oil price increased rapidly (although it was lower in 2010) leading to rapid increases in the price of existing vehicles. It went above 10,000 in 1999 and we all know how those US prices moved around once the credit crunch kicked in. The last time this happened in the UK was also after a period of oil price hikes, so we may now be at the beginning of something similar.

But it's not as simple as this. The truth is that if you want to spend the average car price on petrol and diesel, it's going to be 20,000 because that is the typical price that motorists are going to have to pay.

Of course, most will use less than this, while some - probably quite a lot of people in the UK - will find that they want the absolute maximum from their vehicle, as there is a temptation, when buying a new car, to spend your money on extra things rather than making it the best car that it could be.

WMCW Admin

Reporting on news on topics such as used car industry prices, automobile recalls, site news and updates, opinion pieces about the used car market, and other appropriate automotive information.

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