The monthly payment figure for new cars has increased by up to six times the national inflation figure, depending on brand and model, analysis by the What Car? Target Price team has shown.
The monthly price increase for personal contract purchase (PCP) finance – overwhelmingly the most popular way for UK consumers to buy a car – shot up 12.4% on average between September 2021 and September 2022.
Across all 2469 new car deals surveyed, the average monthly cost rose from £479 to £538.
However, eight brands hiked their PCP prices by more than 20%, Peugeot topping the list of mainstream brands with a 36% increase.
Meanwhile, Renault, Mini and Dacia showed the most restraint with rises of 4%, 3.5% and 2.3% respectively.
That monthly payment figure has jumped up faster than the average rise for list prices over the same period at 12.4% vs 8.8%, and is a better indicator of how much extra consumers are actually paying for new cars, explained Pat Hoy, head of the What Car? Target Price mystery-shopping team.
That’s because car makers have massively cut back on the discounting that traditionally brought down the monthly cost. At the same time, they hiked list prices – to an average £44,372 this month – as well lifting interest rates on the loans to finance the PCP and cutting dealers' sales bonuses, which also helped drive discounting.
“All of these in varying degrees pushed up prices across car brands and models, and all of it is bad news for consumers,” Hoy said.
The What Car? team analysed 48-month PCP deals with 15% customer deposit and including any discount offered.
After Peugeot, the mainstream brands showing the biggest price hikes included Jeep (+30), Skoda (+22%), Honda (+20%) and Vauxhall (+20%).
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