The prices of Ford cars will be rising after the end of June by on average 4%. This is the third time this year that Ford have had to raise their prices. Ford rose their prices back in February by 4.7%, and once again in April by 3.75%.

Ford admitted that it “may seem counter-intuitive” to raise prices during a recession, but due to the current weakness of the pound against the Euro, they said “there is no choice if we are to maintain a viable business”.

Ford stated that the pound had been stable for the last 10 years until the end of 2007 at 1.43 euros, however, during the past 2-3 years, the pound has fallen to 1.16 euros.

Because Ford build their UK cars in Spain and Germany, Euro countries, they had no choice but to increase prices. Ford has been absorbing their losses prior to these price hikes, however, because they were losing on average £3,500 on every car sale, they can’t sustain that during a recession.

These price rises will have a negative affect on the car scrappage scheme because the money added onto the price will take a large chunk out of the £2000 government grant. With the prices of Fords cars rising by around £600 to £750. When buying a new Ford, customers will feel less effect of the car scrappage scheme.

Although this is all bad news for new car buyers, people choosing car leasing over buying won’t see the price rises straight away. Even if you are not currently on a Ford lease, but you are looking, the leasing companies won’t pass on the price rises until they buy new vehicles, which, during the recession, won’t happen straight away. So this is some good news for the leasing customers, not so much for new car buyers.