Ford are preparing to raise the price of their cars by around 4% towards the end of June. This is the third time since 2007 that they have rose their car prices. The hikes began in February with a rise of 4.7%, and then again in April by 3.75%.
Ford admitted that it “may seem counter-intuitive” to raise prices during a recession, but due to the current weakness of the pound against the Euro, they said “there is no choice if we are to maintain a viable business”.
Ford stated that the pound had been stable for the last 10 years until the end of 2007 at 1.43 euros, however, now the pound has fallen, due to the recession, to 1.16 euros.
Because Ford build their UK cars in Spain and Germany, Euro countries, they had no choice but to increase prices. Before Ford rose their prices, they had been absorbing the average £3,500 that they were losing on every car sale. This has now stopped as if they wish to stay stable, they cannot keep losing money, particuarly during a recession.
Not only are these price hikes a problem during the recession but they also have an affect on the governments car scrappage scheme because these price rises will take a huge chunk out of the money that would have been saved. With the prices of all Fords cars, including the Ka, Fiesta and Focus, rising by around £600 – £750. Car buyers will be feeling less benefit of the car scrappage scheme now.

Although this is all bad news for new car buyers, people choosing car leasing over buying won’t see the price rises straight away. Even if you are not currently on a Ford lease, but you are looking, the leasing companies won’t pass on the price rises until they buy new vehicles, which, during the recession, won’t happen straight away. So this is some good news for the leasing customers, not so much for new car buyers.

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