Why are car prices going up?

A few weeks ago, whilst enquiring at my local Mazda dealer about a CX-5, I was informed that there would be a £200 price increase in 2014 and also a newly introduced £200 supplement for "Stone" leather interior instead of "Black" on Sport models. So, a £400 increase for the model & specification I was looking at.

Twelve months ago, one British Pound would buy 140 Japanese Yen. Today, it will buy 175. This seems bizarre - surely UK prices of Japanese cars should be dropping, not going up?

Asked on 3 January 2014 by Colin (Scotland)

Answered by Honest John

That isn't the way it works. Supply and demand is the way it works. A manufacturer will always try to maximise what he can get for his vehicles in all World markets where he sells them. But there may still be discounts via people like www.drivethedeal.com

So before giving up on a Mazda CX-5, compare the value for money with the competition. Honda CR-Vs are generally still dearer.

Tags: buying a new car

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