Cars seem to be getting more and more expensive, why is this? Let’s find out

Are Cars Getting More Expensive?

Cars are expensive, there’s no two ways about it. The range and variety of cars available today is staggering, but you’re still talking about making a significant investment if you’re to purchase an automobile.

Since their invention, cars have always been pricey. The classic cars of old were reserved for a lofty few, the upper echelons of society who had the money to spare. Today, cars are everywhere, but that’s not to say they are any cheaper, with loans and payment plans making them more affordable for the average person. So, what is it exactly that makes cars so expensive, and are the prices rising? Keep reading to find out.


Cars are complicated machines. They are made up of hundreds of different parts, from the large engine to the tiny and intricate microprocessors. Many of these parts are expensive to produce and require the use of sophisticated machinery and technology to construct them.

Car manufacturing is a global industry. Certain companies and nations will specialize in the design and production of specific parts, which will then be shipped all over the world to a range of different car companies. This global economy is a finely balanced process, made up of complicated logistical procedures and long-established routes and trading agreements.

Recent world events, including the Covid-19 pandemic and other geopolitical issues, have thrown this manufacturing and distribution network out of sync, causing a domino effect that is disrupting supply and demand across the planet. Certain computer chips, in particular, have faced massive shortages, which has had a significant impact on the car and other industries. This chip shortage has only been exacerbated by other events, such as a fire at a chip manufacturing plant in Japan.

The shortage of these materials has led vendors to increase their prices, which in turn has driven up the price that consumers see at the car dealership.

Safety Technology

One of the most important things for car manufacturers is to ensure that their products are as safe as they possibly can be. Recent developments in technology have allowed car companies and designers to make incredible advancements in safety systems.

Anti-locking brakes have been around for a number of years, and were one of the first major technological developments in the field of car safety. They work by detecting pressure on the brakes and automatically reducing and reapplying this pressure to prevent the brakes and wheels from seizing up in emergency situations.

Advanced driver assistance systems (ADAS) is a term that encompasses a range of sophisticated driver safety technology that we see on many cars today. Collision detection can prevent crashes and makes use of autonomous emergency braking to stop the car without any input from the driver. Lane correction systems can adjust a car’s direction automatically if it begins to drift out of a lane, while health monitoring technology works to assess a driver’s fitness to operate a vehicle.

ADAS uses a network of highly advanced cameras and sensors that can map where a vehicle is in a physical space and identify objects surrounding it, such as buildings or other vehicles on the road. These sensors can assess the speed and direction of the car and make rapid judgements about potential collisions or other events, taking action to ensure these are avoided. This equipment is expensive, and its use in so many modern cars is one of the reasons why both car prices and car insurance rates are increasing.

Energy Costs

The world is currently in the grip of a manufactured energy crisis, with several complicated geopolitical factors to blame. Prices of oil are up both at the pumps and for companies buying wholesale, while gas and electricity prices have both also skyrocketed. This has had an effect on everyone from global brands to families and households, with implications that experts predict are set to last for years to come.

Car manufacturing is an energy intensive process. The distribution side requires fuel to vehicles to transport parts on planes, boats and trucks, while the actual process of putting the cars together also requires energy. As costs of all kinds of fuel and energy rise, car manufacturers have had to increase the prices of their products to offset this, which leads to consumers having to pay more.


The prices of all products fluctuate, influenced by a wide range of factors that are often completely out of the control of consumers. For a truly global industry like automobile manufacturing, there are a host of problems that can arise that will result in the prices of cars going up. From raw material production and distribution, to new developments in technology and rising energy costs, we’re currently seeing something of a perfect storm when it comes to conditions that are causing the prices of automobiles to rise so sharply. 

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