New car registrations in the UK in 2023 are identical to that in 2012, despite the overall population growing 9.2%. A large part of the reason, we feel, is price inflation, with the average car price increasing 44% to £41,738 per unit in 2024, whilst national incomes are trailing +35% in nominal terms.
In fact, these numbers understate true price appreciation of European vehicles, for example, the cheapest Golf in 2012 had a RRP of £16,330, whereas, it now starts at £27,035 – a 65% jump in just 12 years! Overall price increases have been dampened significantly by the introduction of cheaper Eastern European Chinese and Korean imports.
As a result, many owners are preferring to hang on to their current vehicles rather than upgrade, which incidentally, is a global trend. It could also help to explain why the proportion of those aged 17-20 holding a driving licence has fallen from 48% in the early 1990s, to below 30% presently. Reflecting increased regulation, insurance, government fees and alternate opportunities given by the arrival of new technologies (e.g. micromobility options).
