Drivers spending more than ever on new cars
WE are spending more than ever on our new cars with the average price increasing this year to more than €33,000, according to an new indepth report.
That is an increase of nearly €10,000 in the past 10 years – an average annual hike of around €1,000.
According to an analysis carried out for the Irish Independent by vehicle data and history expert Cartell.ie there are several reasons for the increase.
They include that motorists are: Opting for better equipped cars and costly vehicle types such as SUVs and Crossovers.
There appears to have been greater disposable income and/or more accessible lines of credit – such as Personal Contract Plans (PCPs) which account for increasing proportions of deals.
Buyers want more spacious cars. Cartell.ie says the big increase in population has likely swayed more people with younger children to buy a vehicle with additional space.
As cars have become more sophisticated they have become more expensive to make. For example they have to comply with ever more stringent Euro NCAP crash and safety ratings – as well as remaining competitive with rivals.
Buyers expect higher specification items as standard such as larger alloys, on-board technology, Advanced Driver Assistance Systems (ADAS) – all of which increase the cost of a vehicle.
The increased demand for electric and hybrid vehicles brings with it higher prices as they have more expensive technology on board.
In undertaking the study which reflects not just higher prices but higher expectations form our motors, Cartell.ie looked at the average Open Market Selling Price (OMSP) of all new cars bought between January and October every year between 2003 and 2020.
The results show that the price for a car bought in 2020 was €33,287. This is the third successive year that average values topped the €30,000-mark, starting with €30,161 in 2018 and €31,536 in 2019.
The biggest growth area over recent years has been in the €30,000 to €40,000 price bracket. It now makes up 32pc of the total market and is the second most popular bracket overall.
This lies just behind the €20,000 to €30,000 price band which constitutes 34pc of the total. This range has plunged from accounting for 53pc of cars bought in 2012.
Reflecting higher prosperity, higher-end cars in the €40,000 to €60,000 bracket have increased in popularity since 2018. They make up 19pc of the market – up from 12pc in 2018.
Jeff Aherne of Cartell.ie said: “These results show that buyers are willing to purchase more expensive cars. Vehicles are tech-heavy now with manufacturers offering multiple technological enhancements. This is undoubtedly contributing to the price. Cars are also laden with safety features which increase the cost of manufacture.”
He concluded: “Ultimately the buyer is prepared to buy more expensive vehicles and the availability of various different finance offerings may also be playing a role in this.”