The research shows that the monthly cost of leasing a basket of some of the most popular car models in the UK rose from an average of £232 in February 2017 to £253 in February 2018.
UHY Hacker Young says that a weak sterling is pushing up the cost of imports for car manufacturers. With the pound still down 14pct against the Euro compared with before the Brexit vote, manufacturers are starting to pass their increased supply chain costs on in the form of higher forecourt prices.
It adds that UK new car prices are also beginning to be pushed up by strengthening sales in European markets. In recent years, manufacturers have tended to push excess unsold stock from Europe into the more-active UK market, resulting in lower prices here. As sales in Europe have risen in recent months, some manufacturers have been able to reduce this, cutting the need for discounting in the UK.
UHY Hacker Young says that the three biggest rises in monthly cost were all among cars made by German manufacturers (see table below) – the Mini Cooper D (up 31pct), Audi A3 (up 23pct), and Mercedes-Benz C220 (up 19pct).
The firm explains that heavier discounting among prestige carmakers now appears to be coming to an end. Over the last two years, consumers have often found that cars from German manufacturers have had lower per-month price tags than mass-market brands.
It adds that these three largest increases in cost are among larger-engined diesel models, which may reflect the waning popularity of diesel. Contract hire providers are likely to be increasing the cost of leases to compensate for the falls they expect in the residual value of diesel cars.
Paul Daly, Partner at UHY Hacker Young, says, “Car leasing prices now look to be on the rise again. UK car buyers have benefitted from a period of deep discounting, but that seems to be coming to an end.”
“Long-term Sterling weakness means manufacturers are having to shift their rising supply chain costs on to consumers. Strengthening European car sales have also meant that the UK market is having to soak up much less excess stock from mainland Europe, which is also starting to drive up prices here. That is particularly true for prestige German cars – the days of leasing an Audi A3 for less than a Vauxhall Astra appear to be over for now.”
Stark evidence for HMRC pressure - 28/07/2010