Research by What Car? magazine reveals that car prices have rocketed by more than 5% since the EU referendum

A ‘perfect storm’ of rising inflation and the car industry’s attempt to increase profitability following last year’s Brexit vote has led to a soar in car prices.

That’s according to research revealed this morning by What Car? magazine - which found an average price rise of 5.2% for new cars over the last seven months.

What Car? says the situation does vary between sectors, with large SUVs being the hardest hit as prices increase by a hefty 12.3%.

Those in the market for a luxury car will actually have seen prices drop by 0.2%, but performance cars and MPVs have rocketed by 8.4%.

“We knew average prices were going up, but rather than a gradual rise, our research has shown that there has been a perfect storm of elements that has conspired to create a big bang in price hikes,” said What Car? editor Steve Huntingford.

The magazine believes the price increases are partly thought to be a by-product of the EU referendum result, which triggered a plummeting pound that hit the cost of importing cars and raw materials.

Brexit isn’t entirely responsible, however - as longer-term trends reveal manufacturers are cutting discounts and withdrawing tempting finance deals in an attempt to boost profit margins.

This means cars costing less than £200 per month - the ‘holy grail’ for many buyers, says What Car? - now make up less than 10% of the market, compared to 13% before the Brexit vote.

To help buyers fight back against rising car prices, the magazine has launched a new online marketplace which reveals the best deals available.

“The aggressive sales targets that many dealers have mean you can still get a great deal if you buy from the right place,” added Huntingford. “Our new car buying marketplace saves you the hassle of shopping around, letting you configure a car to your desired spec and then directly compare prices from dealers in your area.”