New car prices rise under cover of VAT rise

Price rise ? That's just down to Dave's extra Vodka.

Well, I’ll go to the foot of our stairs, as my Dad might once have said.

It turns out that instead of absorbing this month’s VAT rise to keep car sales moving along, car makers have managed to sneak a price rise in to the equation in the hope punters will just blame the Con-Dems for the price rise, and not notice the extra bit sneaked in. But CAP noticed.

It seems that over two thirds of car makers managed to sneak a price rise in when they revised list prices this month in light of the increase in VAT to 20%. The average rise was £142.74, which might not seem a lot but actually adds up to an extra £200 million taken off new car buyers over the course of a year. Not exactly loose change.

European car makers seem to be the biggest culprits in this unofficial price rise bonanza by sneaking in hefty rises. By contrast, Japanese and Korean car makers had an average price rise of just £10.

With inflation now pushing 4% you can’t really blame car makers for seeking a price rise. Just a shame they reverted to stereotype, put on their best Arthur Daley sheepskin, drew heavily on their cigar and pinned the blame on the taxman.

Some things never change.

Source: CAP

By Cars UK