2017 Volkswagen Golf GTI

Opinion | Are new cars actually getting more expensive?

The new Volkswagen Golf, and the excellent revised GTI in particular, got us wondering. Just how much more expensive are new cars compared to their predecessors? 

2017 New Volkswagen Mk7.5 Golf GTI

Having already won rave reviews from both print and online media, the Mk7.5 Volkswagen Golf GTI is already attracting attention. Yet a lot of the Internet comments seem to take umbrage at one particular fact – the cost. To clarify, the new Golf GTI has a list price starting at £27,865. As with any modern car, there is the huge temptation to run wild with the extras, but that basic amount will get you a brand-new three-door GTI, with a manual gearbox. No options, no fancy technology packages, not even metallic paint. Signature GTI colours like Tornado Red will add an extra £250, with metallics needing £570. In short, it’s rather easy to spec’ a GTI which costs over £30,000. Shock, horror, Internet outrage.

The most recent time a new Golf GTI garnered such positive attention was with the introduction of the Mk5 in early 2005. After the lacklustre Mk4 effort, the all-new GTI was an absolute revelation. Tartan seats helped, too. Yet when first introduced, the new Mk5 GTI had a starting price of just £19,995. Yes really, less than £20,000, and although the amount did rise shortly afterward, that’s the value we’ve used for comparison.

2005 Volkswagen MkV Golf GTI

A difference of £7,870 equates to a substantial sounding 39.4% increase in those twelve years between 2005 and 2017! On the other hand, horsepower has gone from 197hp in the Mk5 GTI, to 230hp in the Mk7.5, a jump of only 17%. If it had followed the same pattern as pricing, new GTI models should be rolling out the factory with 274hp. So have Volkswagen left new GTI buyers shortchanged?

Well no, actually. Inflation on the cost of goods and services in the UK has risen on average by around 2.9% each year. That 2.9% figure is based on the Bank of England’s CPI information, and there is little difference when using inflation calculators that rely on RPI data instead. We’re not going to delve into A-Level economics and debate the differences here – this is a car blog, not the Financial Times.

2017 New Volkswagen Mk7.5 Golf GTI

Inflation between March 2005 and March 2017 totals roughly – wait for it – 39%. Meaning a new Mk7.5 Golf GTI costs within £75 of what the financial data tells us it should do in 2017. It also means we’re getting a better deal in 2017 with 230hp, and the continuous improvement in technology and specification that has taken place in the last decade. So the next time someone exclaims the new Golf GTI is far too expensive, feel free to shut them down with data.

We couldn’t just leave it at one car, however. The Golf GTI may happen to be a freak automotive bellwether, so we checked out the new Golf R, just to be sure. But this time we went even further back with our research. All the way back to 2002, and the introduction of the Mk4 R32. (more…)