Ford are preparing to raise the price of their cars by around 4% towards the end of June. This is the third time this year that Ford have had to raise their prices. They rose in February by 4.7%, and then again in April by 3.75%.

Ford stated that it does sound strange to raise car prices during a recession, but they also said that they had no choice because of the weak pound, “there is no choice if we are to maintain a viable business”.

Ford said that the pound against the Euro had been stable for around 10 years at the end of 2007 at 1.43 euros, however, more recently the the pound had fallen to 1.16 euros.

Ford were forced to raise their car prices because most of the cars produced for the UK are manufactured in Spain and Germany. Before these prices rises occurred, Ford had to absorb the losses from the weak pound, however, they cannot continue doing this during a recession if they wish to be a stable business.

The car scrappage scheme will also be affected by the price hikes, the £2000 grant will have a huge chunk taken out by the increase in Ford prices. With the prices of Fords cars rising by around £600 to £750. The car scrappage scheme will not be felt as much buy customers when buying a new Ford.

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. This news is pretty bad for new car buyers, however, it’s weakened slightly for leasing customers.

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