Car finance price rise SHOCK – Brexit causes policies to skyrocket by thousands
Car finance price rises have increased by as much as 49 per cent since Britain voted to leave the European Union
New research has revealed that the changes are costing drivers £98 more a month, or as much as £4,606 over the course of a full contract.
Sterling has also plummeted in value from more than 1.3 euros to the pound in May 2016 to barely 1.1 euros in February 2018, reveals Parkers.
This change in costs has caused Personal Contract Purchase (PCP) finance costs for numerous cars to skyrocket.
Parkers estimate that monthly payments have shot up by as much as 49 per cent. As a result, monthly payments have increased at a rate of one-and-a-half times faster than cars’ cash prices.
This cost is putting pressure on household budgets when they’re coming to the end of the contract.
Chris Lloyd, Parkers Finance Editor, explains: “With more than 90% of privately purchased cars being financed, potentially millions of drivers could be in for a shock when they come to replace their car.
“Consider the fact the average UK household spent £900 more than it earned in 2017, and hundreds of thousands of families could find themselves priced out of the new car finance market – with the inability to stomach higher monthly bills and no savings to put down a bigger deposit to shrink the instalments.”
PCP finance costs have been impacted the hardest most recently because the monthly costs are based upon the difference between the car’s cash price and their predicted value at the end of the contract.
Therefore, drivers signing up now are paying more every month for the same vehicle.
The research found that owners of a supermini could face paying £34 every a month and expect to pay £234 in 2019 compared to £200 in 2017.
Cheaper cars are also rising in price rapidly with one model increasing from £76 to £113 per month in two years – a 48 per cent increase.
Lloyd continues: “Parkers research reveals that costs are increasing so fast that drivers who are tied into finance contracts currently may not be able to afford to finance the same car next time around (assuming the same contract terms).
“A Fiat Panda city car that would have set you back £119 per month two years ago is now £153 per month for new customers – despite being one of the oldest small cars still on sale and scoring a zero-star safety rating.
“Sign up for a new Panda today, therefore, and that same car could cost you an additional £1,580 over the four-year contract compared with someone who signed the contract in January 2017.”
If you buy a BMW 1 Series you could end up paying £98 more every single month compared to someone who purchased one 18 months ago.
What this translates into is a price increase of £4,606 over the term of contract.
Keith Adams, Parkers editor adds: “We’re facing a period of economic uncertainty, whatever form the Brexit process takes.
“If you’re looking to buy a new car, do your best to make sure you get the best deal you can.
“Yes, prices are rising, but carmakers also want your business, and will be open for business.
“Make sure you make the most of this – and also make sure you don’t bite off more than you can chew.”
The changes in finance costs of five cars between 2017 and 2019
- Cost per month – 2017: £119
- Cost per month – 2019: £153
- Difference over full contract: £1,580
BMW 1 Series
- Cost per month – 2017: £200
- Cost per month – 2019: £298
- Difference over full contract: £4,606
Vauxhall Mokka X
- Cost per month – 2017: £276
- Cost per month – 2019: £317
- Difference over full contract: £1,438
- Cost per month – 2017: £297
- Cost per month – 2019: £324
- Difference over full contract: £951
- Cost per month – 2017: £259
- Cost per month – 2019: £229
- Difference over full contract: -£619
Here are some tips to get the best deal on your car finance policy
- Push for a cash discount before talking about finance
- Make sure you get a finance discount – known as a deposit contribution
- Choose an in-stock car for more scope to haggle
- Ask the dealer to throw in extras like a service plan
- Get quotes from more than one dealership
- Do walk away if you’re not getting a good deal
- Give yourself plenty of time at the showroom
For the original article from The Express, please visit them here.