New cars to now cost higher

The prices of new cars are now increasing and the first raise was observed last year in the fourth quarter of the financial year 2010. But he increasing prices are not due to the booming economy, experts believe that the rising prices are not due to the booming economy but car dealers have increased prices considering the new vehicle emission tax in the third quarter of the financial year 2010. But Mr. Mike von Höne, the chief executive for TransUnion says he did not expect the prices to increase in 2010. He said as observed car prizes increase each year and the rise is mainly observed in the fourth quarter with a hike of 4.7 percent and an overall hike each year is observed to be 4.3 percent. But there was an exceptional price increase in 2009 which made him believe that the prices should not go up this year in 2010.

But the figures by Econometric revealed higher figures. Econometric calculates the price of the vehicle before any discounts or promotional deals and compares the growth based on these prices. So according to them the prices of new cars increase by 6.06 percent every fourth quarter of the year whereas last year this figure was observed to be 7 percent.Though TransUnion and Econometric both observed an increase in the prices of new cars TransUnion also said that the cars of used cars continued to fall further. Used cars are not able to hold their value even though the prices for the new cars increase. Mr. Mike von Höne said that this may be due to the increasing stock of used cars. He says that the number of used cars is increasing each day giving the consumers more choice in the same category. Thus the demand and supply ratio being in favour of the consumers has made the prices drop even further.

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