New car prices have risen by an average of 38% since 2008, according to an analysis by cap hpi.
The average offered price of a new car rose from £24,383 in February 2008 to £33,559 in February 2018.
Although additional technology features contributed to push up prices of vehicles, cap hpi said this was not the main drive for the rise.
Instead, its analysts attributed it to changes in the structure of the marketplace, from a more varied mix of vehicle types to an expanded diesel offer. Diesel-powered cars are on average £1,000 more expensive than their petrol counterparts.
Matthew Freeman, managing consultant at cap hpi, said: “Over the past decade, we’ve seen more expensive models being rolled out. We see more SUVs on our roads, and they are usually more expensive than the equivalent saloon.”
“Many brands have moved to offer a more luxurious specification mix and eliminated their entry-level specifications. This is partly a response to PCP making cars more affordable, and consumers moving up to more expensive models.
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“It’s also worth noting that those base models were not especially desirable in the used market, and had poor resale values.”
He added that, since PCP has become the main means of acquiring a car, entry point prices did not have to be kept at an absolute low to entice customers anymore.
“PCP has shifted focus from the entry price to the monthly repayment and having a model to advertise as ‘From £9,995’ is no longer a priority – cars are more likely to be advertised on their monthly payment.”