Saturday, June 29, 2024

Is 2023 the year for a car upgrade?

Is 2023 the year for a car upgrade?

Let’s face it, things haven’t been entirely plain sailing as far as the UK economy and car market are concerned over the last few years. With all that in mind, would this be a totally mad time to commit to a new car? Or is now as good a time as any for you to upgrade and treat yourself to something new?

Whether you are considering a new car, or seeing what used cars are in your budget and fit your needs then these are the factors you need to bear in mind.

Car prices are on the up

It’s not just housing, the contents of your supermarket shopping basket and pints of beer that are on the rise – the average price of a new car has been steadily heading northwards. As a general guide, the ever-popular Ford Fiesta rose by around £5,000 in three years and the family-favourite Nissan Qashqai went up by more than £6,000 over the same period.

There are several reasons for this, and it isn’t just manufacturers deciding to charge a bit more for their cars.

Inflation in the UK has been on the rise in general, which has its own impact on the car market. The exchange rate means that buying vehicles from abroad is more expensive, while the increased interest rates mean that borrowing money will cost more too.

New car supply still tight

The war in Ukraine, the knock-on impacts of the global pandemic and even fires at factories. All these are reasons behind a real tightening in the supply of new cars over the last few years. It’s not that people didn’t want to buy cars, there simply weren’t as many available, with registrations down by notable amounts compared to the pre-pandemic period.

Things are thankfully on the up, with supply constraints starting to ease as 2023 progresses. Sales are up year-on-year for at least nine months in a row, although they haven’t reached 2019 levels yet.

Fewer used cars around

Remember the early days of the pandemic when almost everything shut down? In those months barely any cars were sold, and those that were went out to key workers and little else. It took a few months for car dealers to reopen and longer still for new-car sales to recover.

The impact of this is still ongoing, as this means that anyone wanting a three-year-old car won’t have the same options available to them compared to a few years ago. As there were no new cars sold in that period, the two- to four-year-old cars that those new cars would have replaced never headed into the used-car market either.

There were also MOT extensions granted during the pandemic, so some cars didn’t get their annual check-ups at the originally planned time. Thankfully this seems not to have had a big impact on pass rates – the fact that lots more people started working at home and drastically reduced their mileage and therefore the demand for their cars.

When is the best time to buy a new car in 2023?

If you are committed to buying a car this year, then when is the best time to do so? The increase in new car sales suggests that things are moving in the right general direction, but it might still be better to wait until later in the year if you aren’t in a desperate need to switch as supply continues to ease. As things stand, prices are still strong and finance deals will be costly too.

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