If you’re in the market for a new car to replace yours, you’ve probably noticed that prices have gone up quite a bit since the last time you wrote a car check. It’s not just an impression as car prices have skyrocketed in recent years, especially in the city car segment.

The non-governmental organization “Transport and Environment” recently published a study that found a significant increase in the prices of the cheapest car models from the five main European manufacturers, well above the rate of inflation. According to the association, prices for these vehicles have increased by an average of 41% per year since 2019which is almost twice the cumulative rate of inflation over the same period.

A surge in prices that affects the city’s residents

The T&E study looked at price changes for popular models such as the Peugeot 208, Seat Ibiza and Renault Twingo. The results are quite instructive, with an increase “almost 6,000 euros” in four years which is equivalent to an increase of 37 to 56% depending on the model.

This surge in prices is not limited to models advertised as ‘affordable’, but also segments above, including the Mercedes A-Class and B-Class, which saw price increases of 38% and 37% respectively over the same period.

Why such increases?

This increase in prices for small cars is significantly higher than inflation, despite the arguments put forward by manufacturers. The latter claim that this price increase was necessary due to the introduction of the Euro 7 anti-pollution standard, incurs an additional cost of 200 euros per vehicle. However, T&E believes that this rationale is insufficient to explain the significant price increase.

Another argument advanced is the proliferation of technology on board our cars, technology that is becoming mandatory to pass safety tests with flying colours. In the case of the Mercedes mentioned above, the brand justifies itself in a more transparent way, specifying that the entry-level models today are much better equipped as standard compared to those sold a few years ago, for a simple reason. that customers for this type of car rarely, if ever, buy cars without options or with little equipment.

Record profits for producers

Anna Krainska, spokesperson for transport and the environment, accuses European manufacturers of using the inflationary context for “raise prices above inflation to significantly increase own profits”. The numbers speak for themselves, because European carmakers report ‘record profits’ of €64 billion in 2022. This situation raises the question of the need for such price increases, especially since producers were able to maintain their profitability.

The consequences of this sharp increase in prices for the cheapest vehicles are particularly worrying for consumers. Many motorists, especially those looking for affordable models, are facing sudden and significant increases in costs that could jeopardize their access to individual mobility.

Overall, it’s not necessarily the new EVs “under €25,000” that should make a difference at this level, “€25,000” has obviously become the new base price in terms of communication to indicate that the car is available. However, less than ten years ago you could still find new cars for under €10,000 (such as the Citroën C1 or Peugeot 108), whereas today signing a check for under €15,000 for a new car is a miracle, even for a Dacia , unless you really go for a base model like the Sandero.

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