Special Report Cost of Motoring

Parker's lifts the lid on a fresh round of price increases from April

Research by Parker's has shown that buyers will face inflation-busting price increases on new cars from April - in some cases just weeks after similar rises.

Ford - which sells one in every five cars in the UK - will add 3.75 per cent to list prices from the start of April, just weeks after a 4.7 per cent price increase. It means a further £50 will be added to the cost of a new Ka, while the Focus Coupe-Cabriolet will be £1000 more expensive - a move predicted by Parker's earlier in March.

Other manufacturers contacted by Parker's that plan to increase prices in April by three per cent or more include SEAT, Nissan and Kia. Vauxhall and Toyota have confirmed that they are planning to rise prices, but have refused to say by how much this could be.

Manufacturers are blaming this latest rise on the increased cost of importing cars into the UK. In recent months the pound had weakened against other currencies. Car makers claim this has added huge costs to imported cars that can't be absorbed.

With VAT set to return to 17.5 per cent by the end of the year, some cars could be 10 per cent more expensive than in December 2008. That would mean a rise of nearly £1500 on a mid-spec Focus 1.6-litre Style.

These price increase announcements come just days after 23 March - highlighted by Parker's as the best day to buy a car in 2009. Part of the research behind the findings showed that new car prices would rise in coming months; used car prices have slowly been rising since the start of the year.

	Citroen
Price rise	To be announced
When	From 1 April
Last price rise	January and February totalling an average 3.5 per cent
What they say	"Everything is related to the exchange rate differentials. People might think it is wrong putting prices up when manufacturers are struggling to sell cars but the pound is just doing so badly against the euro."

	Ford
Price rise	Average of 3.75 per cent across the whole range
When	From 1 April
Last price rise	3 February by 4.7 per cent
What they say	"Over the last 18 months we have seen a 30% decline in the value of the pound against the euro and that’s hurting us and making it more expensive to bring cars and raw materials into the country."

	Honda
Price rise	Average of 3.0 per cent but varies across the range
When	From 1 April
Last price rise	January
What they say	"The reason for our increase is the fluctuating exchange rates between the yen and the pound and also the increase in costs for raw materials."

	Kia
Price rise	Average of 3.0 per cent across the range
When	From the start of April
Last price rise	December 2008
What they say	"This has come about purely as a response to the weakness of the pound, and the strength of the euro and dollar which have impacted on Kia Motors UK and the whole industry in recent months."

	Land Rover
Price rise	Varies across range with 3.0 per cent rise on Discovery, Freelander and Defender
When	From 1 April
Last price rise	September 2008
What they say	"This is an industry wide thing that is affecting everyone with most manufacturers doing the same thing because of other market pressures and we're just falling in line with that."

	Mercedes-Benz
Price rise	Average 1.5 per cent but only applies to certain models
When	From 1 April
Last price rise	1 April 2008
What they say	" The inflation rate for UK products in 2008 has been quite dramatic, and a number of competitors increased their prices in January 2009. Mercedes-Benz has worked hard to minimise these cost increases to customers. The costs of raw materials used in the manufacturing of cars, plus energy and fuel costs have risen dramatically in 2008, and only a small percentage of these are being included in the inflationary measures."

	Nissan
Price rise	Average of 3.4 per cent across the range but not on 4x4s
When	From 9 April
Last price rise	October 2008 by an average of 1.5 per cent
What they say	"The pressures from the economy are the main reasons, but everyone is being impacted in the same way. The exchange rate fluctuation doesn't help either and it's putting us under pressure."

	Peugeot
Price rise	Average of 0.6 per cent across the range
When	From 1 April
Last price rise	1.5 per cent in January on particular models
What they say	"We've all been absorbing the difference between the sterling and the euro. It is affecting the UK market more than any other."

	Renault
Price rise	Average of 1.8 per cent
When	From 7 April
Last price rise	10 February by an average of 2.0 per cent.
What they say	"The rises are all down to the current exchange rate and the weakening value of the pound against the euro."

	SEAT
Price rise	Average of 3.5 per cent across the range
When	From 1 April
Last price rise	Since January 2008 prices have gone up by 5.5 per cent
What they say	"The rises are for the same reasons as most of the other manufacturers, the current poor value of the pound against the euro."

	Skoda
Price rise	Average of 2.7 across the range
When	From 1 April
Last price rise	Last price rise was in January
What they say	"The price rise was due purely to the continuing weakness of the Birtish Pound compared to the Euro, which is affecting the entire industry in the UK. We delayed as long as we could and did all we could to minimise the impact on our customers."

	Toyota
Price rise	To be announced
When	Ongoing decision
Last price rise	27 February between of 1.0 - 2.0 per cent on particular models
What they say	"No decision has been made yet but they are likely to rise at some point in the coming months. The reasons for this is the weakening pound as well as being driven by the market prices and what our competitors are doing."

	Vauxhall
Price rise	An average of 4.0 per cent across the range
When	From 3 April
Last price rise	3 February by an average of just under 5.0 per cent
What they say	"The reason for the latest price rise is exactly the same as the previous one and that is the continuing decline of the pound against the euro."

The following manufacturers that have told Parker's they will not be increasing prices in the foreseeable future are: Volkswagen, Audi (significant spec changes could affect model prices) and BMW (prices are being revised for a change later in the year.).

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Have your say

Will price rises put you off buying a new car?

Post a comment and tell us what you think about this article.

Added: 03 April 2009 15:14

The cost of used cars will also go up, as there prices are linked. You need to look to buy a car soon

Jack Daniels, Inverness

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Added: 03 April 2009 14:55

I think the car firms are just taking the Mik. This wil stall us coming out of this mess the world is in.No one will buy new,so car manufacturers will not sell cars.Putting prices up is suicide.

Keith Mills, Worksop Notts

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Added: 27 March 2009 17:26

We are told that there are thousands of unsold new cars languishing on airfields & other similar establishments, so why import even more? I do not remember the Car companies LOWERING prices when the pound was strong,does anyone else? It's just another way to recoupe losses. What about those models that are manufactured in the UK will the price remain the same I think not.Maybe I'm being too cynical.

Brian Gorman, Cockermouth

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