Car lease prices up to 30% higher this year 6 October 2022 at 11:45PM in Motoring 25 replies 970 views

Steve182

I can only assume this is due to higher interest rates as car prices have not increased to this extent, but the cost of a new lease agreement on my own car is now 30% more than it was in December 2021.

Surely this will just kill the lease/PCH industry.

Anyone else had similar experience?

DullGreyGuy

Inflation, interest rates, poor availability of vehicles and looming recession increasing default rates... previous economic downturns havent killed it in the past so no reason to think it will now. Finance companies will just up the rates and be more selective on lending/leasing.

Herzlos

Probably supply too. You're looking at many months of waiting list for most new cars, so any leasing company that can get you a car doesn't have the same demand to be competitive. The same lack of car supply also means the manufacturers won't be giving leasing companies the same discounts on fleet purchases.

Everything is more expensive than a year ago, people will keep buying and moaning about it.

Grumpy_chap

Steve182 said:

 car prices have not increased to this extent,

I think car prices have increased to a very similar extent.
It is just that the increase is masked because the list price has not moved by that amount but the discounts are no longer there.

I will give an example of one specific vehicle - last September (2021) I was tempted by a marketing offer on a car at £36k with £4k discount making it £32k.  I did not go ahead as my rationale was that the similar offer would always be available the next month.
This month, the list price has increased to £40k (11% uplift) and there are no discounts (long waiting list) so the actual cost has risen by 25%

Car_54

Herzlos said:

Everything is more expensive than a year ago, people will keep buying and moaning about it.

Really? Even when their mortgage repayments and energy bills have rocketed and there's a recession predicted?

sheramber

But it hasn't hit their pocket yet 

I am amazed at the loaded trolleys in the supermarket.  No sign of money shortage there.

Herzlos

Car_54 said:

Herzlos said:

Everything is more expensive than a year ago, people will keep buying and moaning about it.

Really? Even when their mortgage repayments and energy bills have rocketed and there's a recession predicted?

They still need to get to work, and some people still want new cars.

Lots of people will be completely screwed in this recession, but lots of people will still have the money to buy cars.

Grumpy_chap

Herzlos said:

Car_54 said:

Herzlos said:

Everything is more expensive than a year ago, people will keep buying and moaning about it.

Really? Even when their mortgage repayments and energy bills have rocketed and there's a recession predicted?

They still need to get to work, and some people still want new cars.

Lots of people will be completely screwed in this recession, but lots of people will still have the money to buy cars.

Car prices are currently driven by high demand combining with low supply.

There is a real risk that the perfect storm is coming as manufacturers recover supply capacity at the same time as demand falls.

I also wonder how many of the cars being ordered today on a 12-month lead time will not be wanted when the vehicle is actually available?

custardy

Grumpy_chap said:

Herzlos said:

Car_54 said:

Herzlos said:

Everything is more expensive than a year ago, people will keep buying and moaning about it.

Really? Even when their mortgage repayments and energy bills have rocketed and there's a recession predicted?

They still need to get to work, and some people still want new cars.

Lots of people will be completely screwed in this recession, but lots of people will still have the money to buy cars.

Car prices are currently driven by high demand combining with low supply.

There is a real risk that the perfect storm is coming as manufacturers recover supply capacity at the same time as demand falls.

I also wonder how many of the cars being ordered today on a 12-month lead time will not be wanted when the vehicle is actually available?

This is what happened in the (I know its a strange comparison) PC graphics card market.
manufacturers coined it in during lock down and crypto mining demand creating a shortage.
They designed new cards with this market in mind.
Now crypto has crashed and the new cards are eye wateringly expensive, with a glut of current gen stock in hand.

Steve182

Grumpy_chap said:

Steve182 said:

 car prices have not increased to this extent,

I think car prices have increased to a very similar extent.
It is just that the increase is masked because the list price has not moved by that amount but the discounts are no longer there.

I will give an example of one specific vehicle - last September (2021) I was tempted by a marketing offer on a car at £36k with £4k discount making it £32k.  I did not go ahead as my rationale was that the similar offer would always be available the next month.
This month, the list price has increased to £40k (11% uplift) and there are no discounts (long waiting list) so the actual cost has risen by 25%

Tesla don't give discounts to the public so I know the purchase price of mine has increased by exactly 15%, but lease cost has gone from £500 to £650, a 30% rise.

DullGreyGuy

Steve182 said:

Grumpy_chap said:

Steve182 said:

 car prices have not increased to this extent,

I think car prices have increased to a very similar extent.
It is just that the increase is masked because the list price has not moved by that amount but the discounts are no longer there.

I will give an example of one specific vehicle - last September (2021) I was tempted by a marketing offer on a car at £36k with £4k discount making it £32k.  I did not go ahead as my rationale was that the similar offer would always be available the next month.
This month, the list price has increased to £40k (11% uplift) and there are no discounts (long waiting list) so the actual cost has risen by 25%

Tesla don't give discounts to the public so I know the purchase price of mine has increased by exactly 15%, but lease cost has gone from £500 to £650, a 30% rise.

not to the public buying 1 car because their supply has always been below demand so no need to. Commit to buy a load of them and discounts have been available.