Car prices are escalating at a quicker pace than the increases in people's earnings.
In Germany, the affordability of new cars has deteriorated significantly over the past five years, according to a joint study by consulting firm Oliver Wyman and market researchers at Jato Dynamics.
The gap between annual net incomes and the average price of a new car has widened considerably, surging by over 38 percent between 2019 and 2024. Simultaneously, net income increased by only 24 percent within the same period, from approximately €26,100 to €32,400.
These trends have made new cars less accessible, with an average German consumer spending 1.29 times their yearly income on a new vehicle in 2024, compared to 1.16 times in 2019.
Factors contributing to this affordability crisis encompass the shift towards electric and hybrid vehicles, heightened production costs associated with new technologies and regulatory requirements, general inflation, and a decrease in entry-level vehicle options. Modern vehicles are also equipped with advanced safety features, infotainment systems, and connectivity options, which contribute to higher prices.
Source: ntv.de, dpa.
- The Commission, in recognizing the increased costs associated with automotive industry advancements, such as electric and hybrid vehicles, has also adopted a proposal for a directive to ensure worker safety in the sector, protecting them from risks related to ionizing radiation.
- In the face of the financial burden imposed by the growing costs of lifestyle choices like car-maintenance and purchasing new cars, the finance industry explores innovative solutions to make vehicle ownership more affordable for consumers.
- Despite the improvements in transportation technology, the rising prices of cars and reduced entry-level options have made it challenging for the average commuter to upgrade or switch to eco-friendlier vehicles, contributing to the overall issue of sustainability.
- As the affordability of cars deteriorates in Germany, citizens are encouraged to consider budget-friendly options in both lifestyle choices and industries like finance and transportation, striving for a balance between financial stability and modern automotive conveniences.
