The UK Car Market: Prices and Costs of New and Used Vehicles
The UK car market is one of the largest in the world, with over 2.3 million new cars registered in 2019 alone. Despite the ongoing impact of the COVID-19 pandemic, the demand for new and used cars in the UK has remained strong, with many buyers taking advantage of the government’s temporary reduction of the value-added tax (VAT) on new vehicles.
This article explores the current prices and costs of new and used vehicles in the UK, as well as providing some frequently asked questions (FAQs) to help guide potential UK car buyers.
New Car Market in the UK
According to the Society of Motor Manufacturers and Traders (SMMT), the average price of a new car in the UK in 2020 was £33,559. This figure includes VAT and other taxes, as well as any additional fees such as delivery charges or optional extras.
The SMMT breaks down the pricing of new vehicles by different segments, with the smallest segment being the city car, which has an average price of £12,687. At the other end of the scale, luxury saloons have an average price of £72,308.
However, it’s worth noting that many new car prices can vary widely depending on the make and model of the vehicle. For example, a brand new BMW 3 Series could cost around £28,000, while a new Lamborghini Aventador could cost more than £270,000.
Costs of Financing a New Car
In addition to the purchase price, there are other costs associated with financing a new car in the UK. These could include:
– Interest rates: If you take out a car loan to finance your purchase, you’ll likely be charged interest on the amount borrowed. Rates can vary depending on the lender, your credit score, and other factors.
– Deposit: Some car finance agreements may require you to pay a deposit upfront, which can range from a few hundred pounds to thousands, depending on the cost of the car.
– Monthly payments: If you take out a car loan or lease agreement, you’ll need to make regular monthly payments to pay off the balance of the loan or lease.
– Insurance: In the UK, it’s a legal requirement to have car insurance if you’re driving on public roads. The cost of insurance can vary widely depending on factors such as your age, driving history, and the make and model of the car.
Used Car Market in the UK
The UK used car market is also significant, with around 7.9 million used cars sold in the country in 2020, according to the SMMT. The average price of a used car in the UK in 2020 was £12,270.
As with new cars, the price of used vehicles can vary widely depending on factors such as the make and model, age, and condition of the car. For example, a used Vauxhall Astra could cost around £5,000, while a used Porsche 911 could cost more than £40,000.
Certified Pre-Owned Vehicles
One way to reduce the risk of buying a used car with hidden faults or issues is to look for certified pre-owned (CPO) vehicles. CPO cars are typically vehicles that are less than a few years old, have low mileage, and have been thoroughly inspected and refurbished by the manufacturer or a dealer.
CPO vehicles are often more expensive than normal used cars, but they may come with extended warranties and other benefits that can provide peace of mind to buyers.
How long does a new car in the UK typically last?
According to the SMMT, the average age of a car on UK roads is around 8.2 years. However, many cars can last much longer if they’re well-maintained.
Can I negotiate the price of a new car in the UK?
You may be able to negotiate the price of a new car in the UK, particularly if you’re buying towards the end of a quarter or financial year when dealers may be looking to hit sales targets. However, some manufacturers and dealers may have fixed pricing policies that limit your ability to negotiate.
Is it better to buy or lease a car in the UK?
The decision to buy or lease a car in the UK depends on your individual circumstances and preferences. Leasing a car can often offer lower monthly payments and a brand new vehicle every few years, but you’ll never own the car outright. Buying a car involves higher initial costs, but you’ll eventually own the car and will have the flexibility to sell or trade it in whenever you choose.
What documents do I need to buy a car in the UK?
To buy a car in the UK, you’ll typically need to provide a form of ID (such as a passport or driving licence) and proof of address (such as a utility bill). You may also need to provide proof of insurance and a valid MOT certificate for the car if it’s over three years old.