Car prices could rise in 2017
New car prices could rise by 2-3% over the coming year
Motorists buying a new car in 2017 could find themselves paying more than they expect. The UK’s top motor industry body has said prices could rise between 2-3% over the next few month, due to a fall in the value of the pound.
That could mean an increase of around £400 on the price of a new Ford Fiesta Zetec, for example.
Speaking to Sky News, Mike Hawes, chief executive of the Society of Motor Manufacturers and Traders (SMMT) said: "Ultimately, a fall in sterling is going to flow through to an increase in pricing, probably in the magnitude of 2 or 3% over the coming months. I think we will see increasing prices certainly in the first quarter."
Brexit could lead to further price increases. Speaking in November, then-SMMT president Gareth Jones said British motorists could end up paying an average of £1,500 more for their next car if the UK leaves the single market.
Hawes' comments this morning came as the SMMT revealed a record number of new cars had been registered in 2016. A total of 2.69m new cars were registered, which marks the fifth consecutive year of growth.
The growth has been fuelled by a proliferation of new models on sale – more than 400 types, according to the SMMT, sold by 44 brands. The SMMT also attributes the growth to a wide range of attractive finance deals available to buyers.
Hawes said: "Despite 2016's political and economic uncertainties, the UK's new car market delivered another record performance as carmakers offered an incredible range of innovative and hi-tech models.
"2017 may well be more challenging as sterling depreciation raises the price of imported goods but, with interest rates still at historic lows and a range of new models arriving in 2017, there are still many reasons for consumers to consider a new car in 2017.
"Looking longer-term, the strength of this market will rest on our ability to maintain our current trading relations and, in particular, avoid tariff barriers that could add significantly to the cost of a new car."