New car prices continue to soar

New cars are more expensive than ever, with some surging upwards of 25 per cent from their manufacturer’s list price just a couple of years ago.

And the unprecedented hike in Australia’s new car prices – driven by increasing materials, manufacturing and shipping costs associated with the global supply chin crisis, which is also leading to unprecedented customer waiting times – is hitting some of the most popular models hardest.

Analysis by carsales shows the vast majority of new cars have increased in price over the past two and half years.

We looked at about 40 models priced below $150,000 and found all had experienced price increases in the last two years.

Of 20 popular models we’ve listed below, 19 increased in price by between 3.2 and 28 per cent.

While the Tesla Model 3 has had three price rises over the past 12 months, it is still cheaper than it was two and a half years ago, making it the exception for our analysis period.

For many models, the increase in actual transaction prices – what a customer pays to drive the car off the showroom floor – will be even higher, due to stock shortages pushing up dealership asking prices and delivery charges and, in turn, the price of near-new models.

So for comparative purposes, the prices quoted here are the manufacturer’s list price and exclude dealer and on-road costs.

Our exclusive price analysis paints a stark picture for buyers shopping for a new model in a market still struggling to keep up with demand.

Many mainstream models have extensive waiting lists, giving gives manufacturers confidence to increase their prices, and inflation in Australia and globally is at its highest level in decades.

And in some instances, due to the lack of new-car stock, the prices being paid for used cars like the Toyota RAV4 Hybrid, Tesla Model 3, Toyota LandCruiser and Volkswagen Tiguan are higher than their new prices.

So, clearly, at least part of the market is prepared to bear higher prices – something that would no doubt be discussed by car company executives when setting prices.

And if there’s some reprieve for those upgrading their car, they’ll at least be able to get a solid trade-in price due to record used vehicle values.

Amplifying the price increases on new cars are the lack of deals on so many models.

It wasn’t long ago that you could shave thousands off the official drive-away price. These days that’s simply not happening, with many popular models (the biggest deals appear to be at the luxury end of the market).

In some instances, buyers are being told the car they ordered months earlier is now more expensive, as is expected to happen with the Toyota LandCruiser 70 Series, sales of which have been halted while Toyota Australia tries to shorten a waiting list stretching out to 2024.

Some brands will argue price rises are due to added equipment. But that’s something that’s happened in the car industry for a century, often with modest or no price increases.

And in many cases – including the Mercedes-Benz C-Class, Ford Ranger, Toyota LandCruiser 300 Series, Isuzu D-MAX and Nissan QASHQAI – brands have introduced a new-generation vehicle, which at least partially justifies a price hike.

In other cases, brands have ditched what was previously the entry-level model. With the Volkswagen Tiguan 110TSI, for example, the cheapest version is now the Life variant with more equipment. And in other cases manual transmissions are being axed, upping the base price. But in both cases the fact remains you could once buy a particular model for much less.

Despite the upwards trend, there was a slight reprieve for buyers of some new models on July 1, when the luxury car tax threshold increased from $69,152 to $71,849.

So some models from luxury brands as well as the Toyota LandCruiser 300 Series, for example, came down in price slightly last month.

Still, with only a few rare exceptions, in almost all cases you’ll be stumping up more for a new car than you would have back in 2020.

* Prices exclude on-road costs

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