Why have spare keys become so expensive? They can now cost up to £1,000…

Did you know Hyundai charges over £600 for a replacement key for a 2023 Kona SUV?

I find it exorbitant and they refuse to answer my question as to why it is so high.

Could you shed some light on this or investigate further? I believe average prices are around £300. Gary, Watford

Freda Lewis-Stempel, This is Money’s motoring reporter, answers: It’s a moment that drivers dread: having to get a spare car key.

The reality is that car keys are devilishly expensive these days.

For many drivers in your situation, it will be painful to learn that it could cost twice as much as they had anticipated.

Unfortunately, motorists across the country are realizing just how expensive car keys have become.

Over the past five years, the average cost to get a replacement set has nearly doubled, up 40 percent, according to the website NimbleFins.

So why have replacement car keys become so expensive?

According to NimbleFins, the average cost of replacing a car key is around £340. In 2019, a replacement key would have cost just £136 on average.

These days, a key for a ‘normal’ or mid-priced car can easily cost between £500 and over £1000, as one This is Money reader discovered to his dismay.

Gary Briggs bought a used 2023 Hyundai Kona from a private seller with one key, and got a slight discount on the price because he expected to pay around £250 for a spare.

“No one told me it would cost £250, but I knew from experience that a replacement key would cost around £200. I figured it could cost up to £250 at the most,” he told us.

But to his horror, the local Hyundai dealer initially quoted him a whopping £620.72 for the key.

When I questioned this price with Hyundai’s executive team, they confirmed that the quote was accurate and further explained to This is Money the breakdown of the quote.

The price breakdown consisted of (RRP): £445.04 for the key fob and £72.23 for the folding key, bringing the total to £517.27.

Including VAT, the total price was £620.72. This was plus an additional charge of £72 for labour.

However, Hyundai offered Gary a new reduced price which came into effect on 13 June: the cost of the key fob was reduced to £307.87, bringing the total cost excluding VAT to £380.10. With VAT, Gary would still have to pay £456.12 plus the £72 labour fee.

Unfortunately for drivers, these prices are pretty standard for today’s key fobs.

Average costs of different replacement car keys:

NimbleFins recently rounded up the price of keys to some of the most popular cars in the UK.

The cheapest key was £297 for a Volkswagen Polo, while a Ford Fiesta key cost £317 and a Skoda Superb key £382.

A Toyota Yaris may be a small car, but the key will cost £448, while one of the UK’s best-selling cars, the Mercedes-Benz A-Class AMG, has a key that will cost £532 to replace.

These prices include the key and coding, but additional labour costs and VAT can still be added, further increasing costs.

However, if you think that’s too much, it can be much worse.

Car Key Solutions gathered a few quotes they had received to create a completely new key; some keys cost thousands of dollars for cars that weren’t even new.

The locksmith specialists claim on their website that they were quoted a 2016 Lexus RX 450 for £3000.

For a 2018 Toyota Prius with keyless entry, the estimate was £2,500, while a replacement key for a 2018 Range Rover Sport was estimated at £1,900.

As NimbleFins noted, there can be different prices within brand and model, even depending on the functionality of the key.

In addition, geography can influence price disparity, as can the supplier or distributor.

Is it cheaper to do it through an independent service?

We asked AA Key Assist for a quote for Gary’s key.

Gary did the same: ‘I called AA to speak to a key specialist and it was a bit cheaper.’

The AA quote given to This is Money (based on a 2023 Kona found on their website similar to Gary’s) totalled £464.98 ex VAT (£557 inc VAT).

“The quote includes a new key fob and blade, and assistance from an expert automotive locksmith from AA Key Assist,” AA said.

While it is certainly cheaper than the original £620.72 (inc VAT) Hyundai that Gary quoted, which would also have had the £72 labour fee on top, once Hyundai reduced their price the AA was slightly more expensive.

It may be cheaper to go to an independent service, but this will depend on the type of key and the model of the car.

Why is a replacement car key so expensive?

The AA told us that this high cost in the case of the Kona key is due in part to Hyundai’s technology.

‘Unlike other manufacturers, Hyundai uses a system whereby unique key types are used for each model range. Using this method can significantly improve security levels, but can also impact on the cost of replacement keys.’

Hyundai also told us that ‘technology in vehicles and associated parts has evolved significantly over the years.

“To ensure the highest security features, our keys are specially coded for each vehicle and the price of these parts is set accordingly,” a spokesperson said.

But in general, all the keys from current manufacturers have advanced technology and that is very expensive.

Toyota warns its online customers that it is the coding that “allows (the key) to communicate with your car” and the “reprogramming process costs money as strict control over the codes is needed.”

Then there are the various parts that make up the key: remote locking, keyless entry and start, a key, a transmitter, a receiver, and the physical key itself.

In response to Gary’s situation, Hyundai told us: ‘We will always review any pricing request to identify if a reduction is possible.

“We will do everything we can to help our customers and we are pleased that in this case it was possible to reduce the price of the key for this customer.”

The work experience required today is also advanced: AA’s expert car locksmith “uses the latest key cutting and diagnostic equipment” to program the new key.

Hyundai explained why there is “an element of labor involved in the price” and what it entails: “Key coding requires the retailer to connect the vehicle and key to our diagnostic equipment and download the appropriate security codes.”

Also, as with any car problem, parts may need to be ordered, and the lead time for this depends on demand and stock. This is the case with the Kona.

“Customer demand for additional keys for this vehicle model is low, eliminating the opportunity to achieve cost-of-scale efficiencies,” Hyundai confirmed.

We were told: ‘In this particular case, Hyundai UK was able to offer a lower price than that quoted by the franchised retailer.

‘While Hyundai UK sets a recommended retail price for its parts, the final retail price is ultimately determined solely by each retailer, who are free to set their own prices.’

Buying car key insurance: is it worth it?

Your basic car insurance may already cover key replacement, but if not, it’s worth getting it – you could easily end up spending a thousand dollars on a key if you lose yours.

Manufacturers will offer insurance policies that cover key replacement, as will independent insurance providers, and it is a good way to achieve peace of mind.

In 2018, the RAC found that 1 in 20 drivers had lost their car keys forever (around 2 million drivers) and 54 per cent had bought a replacement.

The RAC estimated that with the average cost of a car key in 2018 being £176, a staggering £180m was spent on new keys across the UK.

Some policies will even offer you a courtesy vehicle while you wait for your new keys, which is much more attractive than shelling out thousands of dollars.