The Motor Industry Review – Why are vehicles costing more than ever?
The Motor Industry Review – Why are vehicles costing more than ever?
As we start 2025, we are more aware than ever of the changing landscape within the motor industry. Post Covid we have seen dramatic changes throughout the industry not least in relation the costs.
We here at Jensen Fleet have seen a 29% increase in the purchase price of new units since 2019 with 17% of that occurring over the past 24 months. We are seeing the monthly cost of new units increase dramatically for our customers coming out of lease agreements that started in 2021/2022. Add to this the increase interest rates across the banking sector, the price per month is on the rise.
This, however, can be reduced by strong residual rates and manufacturer fleet discounts. These are helping to reduce the monthly prices for Jensen Fleet customers to keep leasing as a fantastic option for their company fleets going forward.
Other factors contributing to the increase in the purchase’s prices are as follows:
- Supply chain disruptions, although easing over the past 12 months, they are still challenging due to lack of car parts & microchips.
- Inflation, as we have seen in Ireland the cost of living has risen sharply over the past 24 months, this is also contributing to increase vehicle pricing.
- Raw Material costs such as steel and aluminium have risen, which has increased production costs which is often passed onto the consumer.
- Shift towards more expensive models, such as higher-end models and EV’s, which tend to have higher starting prices.
- Used vehicle market has seen a significant price increase, due in part to the reduced availability of new vehicles. As new car prices rise, more consumers turn to used vehicles, driving up prices in that market as well.
- Interest rates and Financing in Ireland have been rising in response to the broader economic conditions and this is adding to pricing strategies of manufacturers.
- Automaker strategies and market demand can shift on a constant basis. If there is an increase in demand for SUV’s and Crossovers, for example, we may see prices increase in those segments.
In conclusion, while it’s hard to predict specific price figures without more data, its clear that prices in Ireland are likely to increase in 2025 due to the factors listed above.
We here at Jensen Fleet will always get the best deal for our customers in this ever-changing market.
If you would like to enquire about leasing, and how Jensen Fleet can assist your business please contact us on 01-4605250 or info@jensenfleet.ie
