Predicting Car Prices in 2024: Will They Come Down?

The automotive industry in the UK has always been a highly robust one; however, in the face of a unique domestic economic environment, its future is undeniably shaky. Indeed, used car values were significantly inflated last year, reflecting the increased difficulties associated with sourcing new vehicles in the UK. But will car prices come down in 2024? And what are the factors at play?

Supply Chain Challenges

One of the major influencing factors in the economic shape of the automotive market at present is a near-global one, but one which has taken on a unique form with respect to the UK in particular. Automotive manufacturing and logistics are reliant on a complex web of supply chains and haulage routes, which have been profoundly affected by geopolitical tensions and climate-related crises.

Between Russia’s invasion of Ukraine and the formalisation of the Brexit withdrawal agreement, the UK’s key import structures have folded in on themselves – making it harder for both vehicles and parts to reach us. The increased red tape associated with these supply chains has also seen prices rise, against a backdrop of rising prices for raw materials relating to shortages elsewhere. Altogether, these factors paint a bleak financial picture, in which manufacturers and showrooms pass the costs on to the consumer.

Consumer Preference

It is impossible to talk about financial predictions for the automotive industry without also acknowledging the central role of consumer preference. Motorists’ needs are ever-shifting, but shifting today more swiftly than ever. This is especially true with regard to the rise and rise of the electric vehicle, or EV.

EVs have quickly become a standard presence on UK roads, offering cheaper and cleaner travel in comparison to conventional gas guzzlers. The technology involved in their production and quality makes them more valuable than most fossil-fuelled cars, though, encouraging those that lease to invest further in contract hire gap insurance to protect that value against accidents.

The high prices that EVs command are not expected to remain, though; the high demand they enjoy will spur competitive pricing between rival brands, leading to an ‘arms race’ of pricings that ultimately favour the consumer.

Economic Recovery

In the introduction, it was acknowledged that the UK is facing unprecedented economic difficulties. While the light at the end of the tunnel may remain dim for the millions of families unable to afford essentials, the dimness of this light could pay dividends in key markets – automotive markets included. The cooling of financial activity brought on by a high-interest economy will incentivise businesses to offer better deals and discounts, in hopes of stoking a feeble localised economy.

Ultimately, the future of the UK’s car market is an extremely difficult one to predict. The dour nature of the UK’s present economic landscape implies downward pressure on vehicle prices in both new and used markets, but the increased logistical difficulties associated with vehicle import and manufacture are inexorable barriers to that pressure.