The Coronavirus Epidemic Caused A Sharp Increase In Car Prices, And There Was No Turning Back

Small car prices rose by 34 percent between 2018 and 2024, and in the compact car segment, inflation was as high as 36 percent, consulting firm Jato found, studying the German, French, Italian, and British markets.

The biggest price jumps were in the coronavirus years from 2020 to 2022 (remember the chip shortage and reduced production). One of the price drivers is the market’s continued love for SUVs. For a crossover, customers now pay on average about 7,700 euros more than for a classic sedan of comparable size. In 2018, the difference was 2,000 euros.

Another factor is electrification. Electric vehicles tend to be more expensive than comparable internal combustion engines, thus contributing to the overall increase in average prices. Especially in the segment of small and compact cars, the growing number of electric models has reinforced the inflationary trend because manufacturers usually bring them to the market with better equipment.

Experts call the phenomenon of inflation in the auto industry price migration. Accordingly, the cheaper models now cost as much as the more expensive variants did a few years ago. Classic small cars, for example, are now at the level of small SUVs from 2018 and 2019. According to the study, all this indicates that the market is fundamentally changing: small cars, once conceived as a cheap entry-level option, have reached the level of earlier high-end vehicles.

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