Car prices start to fall

Monday, July 25, 2005

New car prices are falling for the first time this year, according to the What Car? Price Index.

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Cars are on average 1.4% cheaper than they were 12 months ago, according to the Index, which has been monitoring new car prices for the past seven years.

Since the beginning of the year, new car prices have risen steadily compared with 2004. However, a recent 11% drop in sales to private buyers has caused new car prices in many categories to begin falling.

Steve Fowler, What Car? group editor, said: 'Disappointing sales in the first half of 2005 have prompted car manufacturers to look closely at their pricing. Consumers are thinner on the ground than in previous years, and those who do want to buy are well informed and know how to drive a hard bargain.'

According to the What Car? Price Index, most types of car are cheaper today than they were a year ago – and prices for 4x4s have slumped the most. Buyers shopping for a 4x4 are likely to pay 2.5% less than they would have done a year ago.

Overall price change of new cars (July 2004 – July 2005)
• City cars (eg Ford Ka, Kia Picanto) -1%
• Superminis (eg Renault Clio, Vauxhall Corsa) -0.4%
• Small family cars (eg Peugeot 307, VW Golf) -1%
• Family cars (eg Ford Mondeo, Vauxhall Vectra) -1.6%
• MPV people carrier (eg Citroen C8, Renault Espace) +0.3%
• 4x4 (eg Land Rover Freelander, Toyota RAV4) -2.5%
• Compact executive cars (eg Audi A4, BMW 3 Series) +3.9%
• Executive cars (eg Jaguar S-type, Mercedes E-Class) -0.8%
• Luxury cars (eg BMW 7 Series, Lexus LS430) +1.3%

A large range of deals and incentives has been launched to encourage motorists back into showrooms. Click on the link to see a round up of the offers. Don't forget to check the What Car? Target Price for any new car you're considering – this is the most you should pay for a new car.