How are new car prices trending?

pinkteapot

Does anyone here follow new car prices? I’m curious whether they’ve shot up like used prices, and if there’s any clues to the outlook given inflation forecasts. 

We buy brand new, paying cash not finance, and aim to keep cars 8-10 years (longer if they stay reliable - mine has just hit 10 years and currently no reason it won’t go a couple more at least). 

To that end, we put an amount into savings each month that gives us the cost of the cars in 7 years (just in case we get a rubbish car that we want to change earlier). We’ve found this costs a lot less per month than being in the finance cycle. However, that money is in cash savings so obviously a terrible interest rate that is now miles behind inflation. If new car prices have really run up since Covid, or are going to, we need a new savings strategy! (Or just to be aware we need to keep the cars going longer before we can change).

anniecave

Yes I've noticed the difference in used prices.  My 9 year old car is definitely worth a lot more than a 9 year old car would be a few years ago, even factoring in the mileage.  I've never bought new before though as I've always looked at the initial depreciation on the first 3-4 years and figured no thank you!   New car prices are affected by a very different set of factors than say for example retail prices. There's a shift away from petrol and diesel towards renewables which probably makes it tougher to estimate.  What does it currently look like based on your 7 year strategy to buy a new petrol/diesel car or to replace similar to what you have?  

pinkteapot

Fair point re the shift from petrol/diesel to electric making things more unpredictable…

I suppose then there’s also the question of whether electric cars (which our next cars may be) actually have an 8-10 year lifespan, or whether they’re designed with the whole 3-4 year PCP cycle in mind… Does the battery life die over the years like my phone battery?

I know new cars aren’t MSE at all, but it’s lovely not to worry about how well it’s previously been looked after, and I once went MSE by avoiding the first year depreciation (the worst) with a one-year-old 11k miles car, and it was a complete disaster. It had endless electrical faults. Having since had new cars, I realised no-one in their right mind gets rid of a car after just 1-2 years unless there’s something seriously wrong with it, because of the depreciation. It’s also lovely to have a good few years (hopefully) of hassle-free driving before the repairs start. It’s a luxury but we’ll do it if we can afford it. And I console my MSE guilt-voice with the fact we keep them a good while.  

DrEskimo

pinkteapot said:

Fair point re the shift from petrol/diesel to electric making things more unpredictable…

I suppose then there’s also the question of whether electric cars (which our next cars may be) actually have an 8-10 year lifespan, or whether they’re designed with the whole 3-4 year PCP cycle in mind… Does the battery life die over the years like my phone battery?

The comparison with mobile batteries is quite flawed since despite being fundamentally lithium-ion batteries, the chemistry, management and way they are operated and completely different.

For starters, nearly all (the early Nissan Leafs are an example of the exception here) have battery cooling systems which ensure they operate at ideal temperatures, all managed by the cars Battery Management System (BMS). The second is that the much larger size means the manufacturer typically builds in a 'buffer' where the gross useable capacity is less than the cars net battery capacity. This means you are never truly charging and discharging from 0-100%.

Case in point, I have 3 EVs in my family (first gen Renault Zoe, second gen Renault Zoe and a Tesla Model S) and all between 5-6yrs old and have no noticeable battery degradation.

DanDare999

pinkteapot said:

Fair point re the shift from petrol/diesel to electric making things more unpredictable…

I suppose then there’s also the question of whether electric cars (which our next cars may be) actually have an 8-10 year lifespan, or whether they’re designed with the whole 3-4 year PCP cycle in mind… Does the battery life die over the years like my phone battery?

I know new cars aren’t MSE at all, but it’s lovely not to worry about how well it’s previously been looked after, and I once went MSE by avoiding the first year depreciation (the worst) with a one-year-old 11k miles car, and it was a complete disaster. It had endless electrical faults. Having since had new cars, I realised no-one in their right mind gets rid of a car after just 1-2 years unless there’s something seriously wrong with it, because of the depreciation. It’s also lovely to have a good few years (hopefully) of hassle-free driving before the repairs start. It’s a luxury but we’ll do it if we can afford it. And I console my MSE guilt-voice with the fact we keep them a good while.  

The big hire companies get rid at 6-9 months with nothing wrong with them. Customers like a newer car when they hire so it makes business sense. 

400ixl

Some examples of new car price rises over the last 3 for the top 10 model sellers

Make and model	Derivative	2022 OTR price	2019 OTR price	Percentage increase
Vauxhall Astra	Design 1.2-litre (110 PS) petrol manual compared with SE 1.2 (110PS) petrol manual	£23,805	£18,895	26%
Nissan Qashqai	Visia DIG-T 140 mild hybrid compared with Visia 1.3-litre DIG-T 140 petrol manual	£24,555	£19,595	25%
Ford Fiesta	Three-door ST Line 1.0-litre (100PS) EcoBoost petrol manual	£20,770	£17,415	19%
Fiat 500	Pop 1.0-litre petrol mild hybrid compared with Pop 1.2-litre (69hp) petrol	£14,235	£12,010	19%
Kia Sportage	'2' 1.6-litre T-GDi (148bhp) petrol manual  compared with  ‘2’ 1.6-litre GDI petrol manual	£26,745	£22,770	17%
Toyota Yaris	Icon 1.5 petrol hybrid automatic	£20,820	£18,190	14%
Ford Focus	ST Line 1.0-litre (125PS) EcoBoost petrol manual	£25,045	£22,145	13%
Vauxhall Corsa	SE Edition 1.2-litre (75PS) petrol manual compared with SE 1.2-litre (75PS) petrol manual	£17,380	£15,550	12%
Peugeot 2008	Active Premium 1.2-litre PureTech 100 petrol manual compared with Active 1.2-litre PureTech 100 petrol manual	£22,300	£20,150	11%
Volkswagen Golf	Golf Life 1.0-litre TSI (110PS) petrol manual  compared with  Match 1.0-litre TSI (115PS) petrol manual	£24,430	£22,135	10%

Herzlos

They shot up after Brexit, and again after Covid. They'll presumably come back down again at some point when supply and demand level off.

So the pricing is pretty bad, but the used prices make new ones seem better in comparison.

If you don't need to change car yet, then don't.

pinkteapot

DrEskimo said:

pinkteapot said:

Fair point re the shift from petrol/diesel to electric making things more unpredictable…

I suppose then there’s also the question of whether electric cars (which our next cars may be) actually have an 8-10 year lifespan, or whether they’re designed with the whole 3-4 year PCP cycle in mind… Does the battery life die over the years like my phone battery?

The comparison with mobile batteries is quite flawed since despite being fundamentally lithium-ion batteries, the chemistry, management and way they are operated and completely different.

For starters, nearly all (the early Nissan Leafs are an example of the exception here) have battery cooling systems which ensure they operate at ideal temperatures, all managed by the cars Battery Management System (BMS). The second is that the much larger size means the manufacturer typically builds in a 'buffer' where the gross useable capacity is less than the cars net battery capacity. This means you are never truly charging and discharging from 0-100%.

Case in point, I have 3 EVs in my family (first gen Renault Zoe, second gen Renault Zoe and a Tesla Model S) and all between 5-6yrs old and have no noticeable battery degradation.

Thanks! This is all good to hear. I’m hoping my car (currently 10 years old) lasts long enough that electric range is up to what I want before I’ll switch (a reliable 450 real-world miles including in cold weather). I’ve not looked recently so next you’ll tell me they’re already doing that.

And thanks for the figures, 400ixl. Not as bad as I feared. And we do sell or trade-in our old cars so of course if second hand prices are better then that offsets any price increase for the replacement. 

Grumpy_chap

It's not just list price changes but also movement of incentives.

Last September I saw Lexus ES at £36k with £4k discount making £32k.  I did not buy because "there is always another offer along".

Now supply chain constraints, the same car is £40k list and no discount 

pinkteapot

Grumpy_chap said:

It's not just list price changes but also movement of incentives.

Last September I saw Lexus ES at £36k with £4k discount making £32k.  I did not buy because "there is always another offer along".

Now supply chain constraints, the same car is £40k list and no discount 

That's interesting... With our current cars we haggled a significant saving off list on one by going between two local dealers and also using a quote from an online dealer. (The other car we cheated - we had it as a company car and bought it at the end of that four-year lease, so we've had it from new but paid second hand price). Interesting if the typical percentage discounts to list price have fallen.

MX5huggy

Do you run 2 (or more) cars at the same time? I can’t see why you think you need 450 real world range, when it becomes available you’ll be paying a fortune for a battery you’ll never need to use. 

I’ve run an Octavia I bought new 13 years ago got a deal from Drive The Deal the purchase cost spread over the 13 years is minimal, going used would have been a comprise. I got the engine I wanted in the current model with the extras that I wanted, year old stuff was not significantly cheaper.

Now waiting for an Enyaq no deal to be had, but I’ve fixed the price so while inflation is eating savings it doesn’t matter to my savings because I’ve spent them Delivey expected in April. I didn’t have to wait for the car I could have taken the used one off the forecourt it was only 9 months old with 7000 miles and £10000 more than list.