Tuesday 14 February 2017 11:52 am

Car prices have surged five per cent since the Brexit vote – with large SUVs up 12.3 per cent

By: Rebecca Smith

Average new car prices have risen 5.2 per cent since the Brexit vote on 23 June last year, according to industry research.

What Car? magazine said the price changes have cost the consumer nearly £2bn in just seven months, after a "perfect storm of rising inflation and the car industry's efforts to increase dealer profitability".

However, the situation does vary: luxury cars are 0.2 per cent cheaper than they were last June, while the price of executive saloons has edged up 0.8 per cent.

Prices elsewhere had soared though. Performance cars and MPVs now cost 8.4 per cent more on average, while the price of large SUVs has surged 12.3 per cent.

Read more: UK car sales hit a record high – but have we reached "peak car"?

The research analysed average retail sales price increase by segment alongside SMMT sales figures by segment.

Part of the increase is thought to be down to the Brexit vote aftermath with a weakened pound impacting the cost of importing cars and the raw materials used in their production.

The magazine said the rises are also in keeping with a longer-term trend where manufacturers have gradually cut discounts and withdrawn many of the most appealing 0 per cent and low-rate interest finance deals, as they look to ramp up their profit margins.

Vehicles costing under £200 a month now make up 9.9 per cent of the market, compared to 13 per cent seven months ago, with the same deposit in each case.

Read more: Brexit may finally be affecting UK car sales

“We knew average prices were going up, but rather than a gradual rise, our research has shown that there has been a perfect storm of elements that has conspired to create a big bang in price hikes,” said What Car? editor Steve Huntingford. “Fortunately, the aggressive sales targets that many dealers have mean you can still get a great deal if you buy from the right place."

Last month, SMMT boss Mike Hawes said he expected firms to start increasing prices across their model ranges as they accounted for the fall in sterling.

What Car?'s best new car discounts by segment