What's the news?
According to a study by car history expert Cartell.ie, Irish buyers are now spending more than ever on their new cars. In fact, for the first six months of 2018, the average price of a new car in Ireland has poked its head above the €30,000 mark for the first time ever.
To be a little more precise, the figure is €30,130, up from €29,391 for the first six months of 2017 and the total 2017 average of €29,481.
Now, these figures need a little bit of contextualising. Cartell.ie calculated the total value of new vehicles purchased in Ireland between the years 2006 and 2018 based on the recommended Open Market Selling Price (OMSP) for each vehicle and summing them up. The company divided the total value for each year by the number of new vehicles sold that year to establish the average value per buyer. Those calculations don't take into account any discounts nor special offers, nor the VRT reductions due to electric and hybrid vehicles. Equally, they don't take optional extras into account, so the margin of error probably balances out a bit.
The €30,000 figure means that we're now buying cars that are pricier, on average, than what we were buying before the economy tanked in 2008. Back in 2007, average car prices hit a high of €28,106 (actually, 2008's average was a full, whopping €2 higher, but that was a year of two halves, thanks to the motor tax changes and the early gusts of recession) before dropping like a rock to €23,940 in 2010. Now, in 2018, not only have we broken the €30k barrier, we've also blown way past the pre-crash peak.
John Byrne, Legal and Public Relations Manager, Cartell.ie said: "The buyer of a new vehicle is getting more features than ever before, more technology, more safety, for example. The buyer has also shown an appetite for other features which manufacturers are increasingly rolling out as standard such as alloy wheels and electric windows. Combined, these features increase manufacturing costs and push average values upwards. The buyer may also be opting for more expensive cars owing to more readily available lines of credit or simply because buyers are keen to buy a larger car when fuel economy and motor taxation figures have dropped so significantly across the board. Buyers have different buying habits: some will enter the market with an open mind and opt for the best available deal within their budget; while others will be keen to opt for the same manufacturer or the same model."
It seems that our love of the PCP deal is driving this inflation in new car values, as they make the monthly repayments on a more expensive model easier to stomach, while Cartell.ie also suggests that the increase in population (from 4.23 million in 2006 to 4.76 million in 2016) could indicate that families are growing, and therefore need larger, and more expensive, cars.
Other factors, including prices swelling to allow for the fitment of more standard safety equipment, and the growth in popularity of hybrid cars, which are generally more expensive, have contributed too.