The cost of new cars is rising at a rate that far exceeds wage growth, making ownership increasingly expensive for UK buyers, according to an analysis by car insurance provider temporary car insurance.
Examining the most common vehicles available in both 2024 and 2025, Tempcover found that while annual earnings have increased by 5.6%, many car prices have risen significantly more. The Nissan Juke saw the sharpest price jump, climbing 12% from £20,985 in 2024 to £23,500 in 2025. This increase makes the popular compact SUV less affordable, with the price rise far outpacing wage growth.
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The Nissan Qashqai follows closely behind, with an 11% increase from £27,120 in 2024 to £30,135 in 2025. As one of the UK’s best-selling family SUVs, this price surge could make it less accessible to budget-conscious buyers.
Luxury vehicles have also seen notable price hikes. The BMW 1 Series, a premium hatchback, has risen by 8% from £28,740 in 2024 to £31,645 in 2025, making entry-level BMW ownership even more expensive.
Claire Wills-Mckissick, a car insurance expert at Tempcover, noted that rising car prices are reshaping affordability.
“The rise in new car prices over the past decade has increased the cost of vehicle ownership. For those who don’t need a car every day, short-term solutions may be a more practical and cost-effective alternative,” she said.
