UK: Car prices fall slightly over five years as repair costs soar
The price of new cars in the United Kingdom reportedly has fallen by more than 9% over the past five years, while the cost of vehicle repairs has risen nearly 40%, according to figures published on Friday.
The Daily Telegraph said the Alliance & Leicester car price index suggested that buyers were paying an average of just over £13,000 for a new vehicle in June, compared with £14,397 in June 1999.
Purchasers of "nearly new" cars fared even better, the paper added. Over the five years, the price of one-year-old vehicles fell 22% (typically about £3,000) and three-year-old vehicles by nearly 25%.
The types of new car enjoying the greatest price decrease have been small "city cars", down 18% over the period, and people carriers (aka minivans, down 15%), the report noted.
The only category to move against the trend has been 4 x 4 off-roaders (aka SUVs) which have edged up 3% in the two and a half years since they entered the index, the Daily Telegraph said.
The paper said Alliance & Leicester is withdrawing from sponsorship of the index as it believes car prices are no longer so high-profile an issue as in 1999 when many UK models were 20% more expensive than identical cars in continental Europe.
Greater flexibility for dealers and importers and currency changes have narrowed the gap, the paper said.
Assessing other motoring costs over the same period, the bank reportedly found that petrol prices had risen 16% in cash terms while the cost of repairs and maintenance had soared by 38%, three times the level of general inflation.
Despite the drop in prices, the proportion of weekly household expenditure devoted to car purchase rose from 4.7% in 1995 to 6.6% last year, the report noted, adding that this was attributed to the increasing proportion of households possessing more than one car.
What Car? magazine is to take over the price-monitoring mechanism, which it said had "proven its worth" by assisting consumers to make better informed choices in sales showrooms, the Daily Telegraph said.