Inflation does not stop: Carmakers give 4-month guarantees on prices

The growing inflation in Europe is wreaking havoc on the car market, to the point that some German brands only guarantee the cost of the vehicle up to four months after purchase.

The current runaway inflation in certain markets is forcing many automakers to raise the prices of their vehicles. This means that, if you buy a model from BMW, Mercedes,  Volkswagen, or Kia, among others, they will only guarantee your purchase price during the first four months after signing the purchase contract. This is what the German media Automobilwoche points out, which has had contact with some managers who have confirmed this. 

This is a setback for many potential buyers, since, with the delivery times that are considered for some models, the delivery will likely take more than four months, and therefore it implies an increase in prices for the vehicles in question. 

The economic data referring to the CPI in Europe for last October have recently been published. They show that the general average rose above 10.7%. Countries such as Germany (11.6%), Italy (12.8%) or the Netherlands (16.8%) are well above the percentages presented by Spain, where the INE has estimated inflation of 7.3%, thus being one of the countries in the eurozone with the lowest growth rate. This price rise, of course, has been reflected in the price of cars throughout the market. 

Mercedes eqe

The growing rise in car prices, among other things, is triggered by a rise in the price of raw materials, something that makes it difficult for car brands to make reliable predictions for the coming months. That is why some manufacturers only guarantee the purchase price for four months after signing the contract.

From a group of German dealers, they have defended themselves by ensuring that they “must protect themselves financially”, since if a product costs more and more to acquire, their profit margins fall, and this is something they cannot afford, since “invoices keep coming and you have to pay for them.” They also affirm that there are other reasons for the increase in the final price of cars, and that is that interest rates also increase significantly in the case of acquiring a vehicle through renting or purchasing financing. 

According to the German newspaper Automobilwoche, BMW understands the situation of the affected customer and in the event of a price increase of the model already purchased, they offer said customer the possibility of canceling the purchase contract, although they do not talk about the possible conditions for this cancellation. , such as the loss of the ticket or other details. At Mercedes, they are somewhat less accommodating and only allow affected customers to terminate the contract free of charge if the price of the vehicle in question has increased by 3% or more.

BMW iX

Volkswagen and KIA are somewhat more accommodating. If a delivery date is specified when purchasing a Volkswagen, price protection applies. But if customers place an order with a dealer that has sold out, Volkswagen confirms the order but does not give a final delivery date. In this case, customers have to agree to each round of price updates, of which there are two or three a year with increases of around 3%. In the case of KIA, the South Korean brand offers seven months to maintain the contract price; after that period, reserves the right to make price adjustments.

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