Are Car Prices Increasing, and Why?

Jack Dreyer | Tuesday 21st December 2021 3:11pm

Couples browsing cars

If you’re looking to buy a car, chances are the price of it will be much higher than a few years ago — and not just because of the usual rate of inflation.

In 2021, it is undeniable that car prices are on the rise, and quickly too. But why? Is it just new cars that cost more? Are used cars also rising in price? What about classic cars?

Over the past few years, the car market, like many things, has suffered an unprecedented amount of change due to a combination of the COVID-19 pandemic and international relations. Could this also have impacted the sale price of vehicles?

Read on to find out just how much car prices have risen in recent years, and what could be the cause.

Rising car prices: the facts

The price of the UK’s most popular cars have risen by 57% since 2019, research by the AA suggests. There is no ignoring the sudden surge in car prices — used and new.

Used Cars

This September saw the average sale price of used cars increase by a whopping £822, up from the previous month.

Taking the humble Ford Fiesta as an example, research from the AA shows how 3-5-year-old Fiestas that were valued at £7,448 in 2019 now cost an eye-watering £9,770!

New Cars

If you’re looking to buy a new vehicle, it’s even worse, we’re afraid.

In a long-term study, ??vehicle financing company,, discovered that some new vehicle prices have more than doubled since 2011. Their appropriately named ‘Carflation study’ has found that new car prices are rising 5x as quickly as the UK’s average wage.

Perhaps shockingly, it was found that the Peugeot 3008 had one of the largest ‘carflation’ rates, at 117%. In 2011, it was possible to purchase one new from £17,195; today, however, the same car could set you back £37, 310.

Since it’s clear that cars are getting more expensive — both in recent months and recent decades—it’s time to ask ourselves: “why?”

Why are car prices increasing?

While there are countless reasons why car prices are increasing so rapidly, to state the obvious, it is namely due to a lack of supply and a surge in demand.

Why are used car prices so high?

Simply put, used car prices are so expensive at the moment because of the lack of demand for new cars. As we will go on to explore, new cars are becoming increasingly unavailable, which means more and more drivers turn to used or ‘used like new’ cars as a last resort.

Why are new car prices so high?

This one is not quite as easy to answer. One of the driving factors behind the drop in new car availability (and the subsequent surge in new car price) is the worldwide shortage of computer chips.

Reaching a historically low level of availability, the specialist computer chips required in cars are becoming increasingly difficult to get, naturally making the vehicles with them worth more.

These chips — also known as semiconductor chips — started to become scarce at the beginning of 2020 when the COVID-19 pandemic forced manufacturers to temporarily close their factories. Many manufacturers thought that the pandemic would result in decreased spending on the type of technology that uses these chips; however, the opposite occurred.

In the various lockdowns over the past year, sales of computers with these chips boomed, leaving few leftover for the transport industry. And cars, well, can’t be made without them. They not only control the entertainment and screens, but are also responsible for the airbags and safety systems.

Aside from this, there is also a global shortage of cobalt, aluminium, and copper, the valuable materials used to make new cars.

Throw into the mix the steady rise in the sophistication of consumer vehicles and you’ve cooked up a recipe for disaster. Drivers are wanting more and more technologically-advanced, stylish, and comfortable vehicles, which aren’t going to be cheap.

What can you do to avoid high car prices?

So, with all that being said, it looks like it might be worth hanging on to your old banger for a while longer. To help your current car stay in working order for as long as possible, the experts at your local Kwik Fit centre have plenty of servicing and maintenance options available.

Be it regular servicing, tyre checks, MOTs, engine oil and filter changes, or even new tyres, our experts can help you avoid having to pay the new car prices by looking after your existing vehicle.

If you have any questions about car maintenance tips or services, read through the expert advice on our blog or get in touch.

Any facts, figures and prices shown in our blog articles are correct at time of publication.

registration plate

Please enter your postcode to see availability information from your local Kwik Fit centre.

Exclusive Online Pricing

We are committed to offering customers our most competitive prices on tyres and more. Read about our exclusive online pricing.

Locate A Centre

Kwik Fit has over 600 centres across the UK including Northern Ireland, many of which are open 7 days a week for your convenience.


We offer a series of FAQs to help you learn more about our services or your vehicle.

Customer Care

0800 75 76 77
You can reach our customer care team 6 days a week from 9:00am to 6:00pm on Monday and Thursday, 8:30am to 6:00pm Tuesday, Wednesday and Friday, 8:30am to 5:00pm Saturday, and 10:00am to 4:00pm on Bank Holidays.