Saturday, 10 June 2023

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Car buyers: how to steer through the labyrinth of choice

Ben and Pamela Thomas

For Ben and Pamela Thomas, the decision over whether to buy an electric car was decided by a stray roof tile. 

When a storm dislodged the ceramic projectile that wrote off their trusty VW Polo, they began the search for a new model, and were keen to try their first electric vehicle. Yet more than a year later, they are still waiting. 

At first, they waited months for an electric Hyundai, only for the factory to cancel the order weeks before delivery. 

Then a broker they knew emailed, having found the same model — also brand new — in stock. 

The lease deal allowed them to “try” the battery car for two years, says Ben Thomas, while the low running costs and environmental benefits appealed to the retired hospital manager.

Finally, in two weeks, they will get the chance to use the electric charger they installed in their Surrey home last spring. 

Their purchase reflects the experiences — and frustrations — of millions of UK motorists who navigate the car-buying process. Decisions such as whether to buy electric or not, selecting a new or used model and which of the myriad finance products to use for the purchase have turned the process into a labyrinth of choices. Added to this, recent production delays have caused hold-ups for even the most determined buyer.

And just as new vehicles become more expensive — with costly electric cars gaining in popularity — persistent inflation is sapping consumers’ spending power, while rising labour and material costs and higher interest rates threaten to push up car loan charges. 

Waiting game: Ben and Pamela Thomas have been waiting for their new electric car for a year © Daniel Jones/FT

New or used? 

Last summer the manufacturing industry was struck by a combination of semiconductor shortages and Covid-related shutdowns in Chinese plants that supply intricate engine parts. Global carmaking slowed to a trickle. 

This led to months-long waiting times for even the most unexciting car models, and spilled over into unexpectedly high demand for second-hand cars. In the UK, as in many markets, the phenomenon propelled used car prices above the level of new models.

This turned the industry’s golden rule — that cars shed value the moment they drive off a forecourt — on its head, and ushered in a harvest season for the dealership industry.

Car traders, used to eking out profit margins with canny trading, simply had to take delivery of new models, wait a week or so, and…

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