Why is the price of a new Ferrari so high?

Costco shoppers are spending £10,000 on a new sports car but their initial impulse will not be to pay that much for it. 

According to data from Fintech Week, the average new car price in the UK is £28,500, and a third of them are new to the UK. 

So if you bought a £40,000 car in 2014, you’ll have paid around £1,000 more than you would have done on an entry-level car, according to data published by Fintecom. 

What is this price gap?

Fintechnow found that the average UK price for a new car rose by a third from 2014 to 2016. 

But that’s not all. 

The average price of an entry level car increased by a whopping 20% between 2014 and 2016.

Why is this so? 

There are two reasons for the price gap. 

Firstly, Finteca is looking at the average price per unit of data. 

For example, if a car was sold for £40k in 2014 but only for £30k in 2016, then the price difference would be £30. 

That means the difference between the average cost of a car in 2016 and the average purchase price would have been £15. 

Fintecoms data suggests that these two factors are important to explain the price differences. 

Secondly, Finkys data shows that the most expensive cars in the country are not new or used, but rather expensive to buy. 

These are cars that have had an overhaul, which is something that is normally reserved for top-end cars. 

In fact, Fiskers most expensive car was only sold in one country. 

It is worth noting that there are several factors at play here, such as the type of car you want to buy, whether or not you are a Fintacom customer, and whether or the car has been given a full overhaul. 

If you buy a used car, the cost difference between new and used car is not as significant, but it still means that you have paid more than the average car buyer. 

While you may be able to afford a new used car for less, that doesn’t mean that you are getting the best value for your money. 

With the average prices of new cars in London increasing, and with Finteco now reporting that the UK market is dominated by luxury cars, the trend is set to continue. 

Which is why you should consider whether or how much money you should be spending on your car. 

Check out our latest car shopping guide. 

Want more finance advice?

You can find out how to save money with our guide to the best deals on the best car deals available. 

Read more from Fintelecom

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