Time to upgrade your family car?

Thinking about replacing your family car? Before you get too carried away looking at used cars for sale or cruising the local dealerships, it might be wise to consider whether now is the right time to buy. The UK car market has been in turmoil for several years – so let’s consider why, and what that might mean for your next car purchase.

Why is the UK car market so unusually weird right now?

There are three main factors here: Brexit, the ongoing impact of the coronavirus pandemic, and the global economic downturn. Add the war in Ukraine, and it doesn’t take a genius to work out that things are far from normal.

The individual and compound impact of these things is having a profound effect on car sales.

What’s the impact?

The short answer is that the supply and availability of cars – both new and used – is much scarcer than it used to be. This means long waiting lists for new cars and consequently reduced stock of quality used cars.

This alone would drive up prices.

Factor in the increased cost of manufacturing and the tricky economic outlook – not least rising interest rates – and you’ll almost certainly be paying more for a newer car now than you would have done three years ago. And if you’re shopping for a brand new one, you should probably be prepared to wait longer for it.

Is there any good news?

If you do opt for a newer car, you’ll find safety levels, standard equipment, in-car technology and performance are all constantly improving. For many people, this will make a newer car more satisfying to own.

In most instances, newer cars offer improved reliability as well. Though the increasing technical sophistication of newer models can also make them more difficult to repair – often entire electronic modules now need replacing, rather than individual components.

Buy wisely, however, and day-to-day running costs are also likely to lower. Just remember to factor in the increased cost of the vehicle itself when making your calculations.

Should I buy an electric car?

You need to be realistic about your requirements before jumping aboard the electric bandwagon. There’s a lot of pressure to suggest that this is the only way forward right now, but electric cars don’t work for everyone.

The biggest issue here is that the electric car charging network isn’t keeping up with the increased number of electric cars on the roads – which means at peak times you can be queuing for ages to access a public charger.

Electric cars also still take longer to recharge than petrol or diesel models do to refuel, while the rise in the cost of electricity means they are no longer dramatically cheaper to run, either (though there are signs of improvement here).

Driving range per charge is also often substantially lower than an equivalent petrol or diesel model can manage on a tank of fuel, with the exception of some expensive premium models.

Placing an electric car into the context of family life, can make even something simple such as a trip to Ikea more difficult – let alone a long-distance journey to a holiday destination.

On the plus side, electric cars do produce zero emissions in motion, helping to improve local air quality. And they can still be cheap to run via an electric-car-friendly domestic electricity tariff.

So, is it time to upgrade the car or not?

Taking all of the above into account, probably the most critical thing is that none of it is going to change significantly any time soon. Prices are not suddenly going to fall back down to pre-pandemic values, and interest rates are unlikely to return to anything like the ultra-low levels of recent years.

Similarly, there’s no reversing Brexit. Demand is likely to exceed supply in a lot of areas of the car market for some time to come, meaning long waiting lists for the most popular models and strong used pricing for the same.

None of this means you shouldn’t upgrade your car – but it does change the terms. Expect to pay more and wait longer, or redefine your choices. Some manufacturers are managing demand better than others, and if you have several models in mind for your next purchase, availability may now be an even more important consideration than previously.

Meanwhile, new entrants into the car market – especially from Chinese carmakers – continue to offer aggressive pricing in order to attract customers away from established brands.

The bargains are still out there, you just have to search for them harder or consider unexpected alternatives now.