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Which? Car accuses manufacturers of hiking up prices

Which? Car believes manufacturers have hiked up prices to absorb the £1,000 they must contribute for the Government’s scrappage scheme.

The consumer magazine does admit that there are also more complicated pressures which have effected the rising prices that some manufacturers have introduced, including raw material costs and unfavourable exchange rates.

Which? highlighted the Ford Fiesta as having one of the highest price changes up 14% to £13,195 in comparison to £11,570 in October 2008.

Vauxhall believes it has been wronly implicated in Which? Car's selection of manufacturers that have tried to absorb the scrappage scheme discount.

It said the focus on its Vauxhall Insignia 1.8 SE’s 14% price increase since launch was "very misleading and selective".

It said the Insignia only accounted for 3% of scrappage scheme trade-ins and the lion's share of sales had been taken with the Corsa, Astra and Agila models.

Bill Parfitt, GM UK’s chairman and managing director, was quick to nip the accusation in the bud: “Vauxhall has wholeheartedly embraced the scrappage scheme, which has boosted the flagging UK market to good effect. We have sold a total of 7,276 cars since the incentive was announced, but we have made no moves whatsoever to compensate for the £1,000 contribution we make to the programme.

 “It’s true that we, along with many other manufacturers, have raised our prices this year, but this was before the scrappage scheme was announced on May 18. In fact, our February 3 increase pre-dated the scrappage scheme by more than three months. The only reasons we have raised prices are a severe weakening of the pound versus the euro, and a sharp increase in the cost of raw materials, such as steel.”

Not all cars have seen big increases in price. The Hyundai i30 has only gone up in price by £35 since September 2008 and Volvo has dropped the price on its XC90 by £950.

Which? Car is recommending consumers to consider nearly new cars rather than new cars to get cheaper deals and some offset of the depreciation on a new car.

Richard Headland, editor, Which? Car, said: “Most buyers are being attracted by the £2,000 discount on a new car, and the scrappage scheme can offer some good deals.

“But with new car prices being hiked up, the scheme can be a false economy. A pre-registered or one-year-old car may offer an even better deal.”

Which? Car put together its own table tracking the price of new cars. To download the full table click here.

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