Less than a week before the arrival of the new 03 registration plate, consumers are beginning to question the growing trend of high profile manufacturer cash-back incentives and list price cuts according to the latest car buying survey from independent monitor, CarPriceCheck.com.
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In a bid to slow falling sales and consumer fears of war in Iraq, manufacturers are pumping a potential £200m worth of headline savings into the market during March. The average buyer can look forward to initial cash savings of £1,084 on selected models according to CarPriceCheck.com.
Although consumers have welcomed the savings on offer, more than three quarters (77%) also felt it served to question just how large the profit margin actually was on new cars sold in the UK and almost half (47%) were concerned that headline savings today would simply push down used car prices making the true cost of ownership higher.
Current promotional offers include £2003 off the Chrysler PT Cruiser, up to £835 off the VW Polo, £800 off Toyota’s Corolla, £1,250 off Peugeot’s 307 family hatchback, £500-£2,000 off selected Ford models and the firm that started it all, Citroen’s now traditional offer of cashback savings of up to £2,500 across the whole range.
The findings reinforce the continued underlying disquiet and distrust amongst buyers about car prices: 87% of those surveyed still believe that prices are too high in the UK compared with Europe – up 3% from six months ago. Then, as now, the majority believe the carmakers are being “greedy” with higher than necessary list prices.
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By GlobalData“Slowing retail sales and an unusually high stock overhang over the past 3 or 4 months may have forced manufacturers into offering cash incentives to shift stock, but they’ve inadvertently shown an increasingly educated car buyer that retail list prices in the UK are still inflated,” said Steve Evans of CarPriceCheck.
He added: “It’s a natural question: if Citroen can slash up to £2,500 off its models, why can’t Peugeot – its sister company, do the same? And if VW can cut £900 off Polo models this year why couldn’t they do it last? Coupled with the uncertainty of war in Iraq, buyers are thinking they should wait a few more weeks to see how things pan out.”
The majority of consumers admit to spending between 8 to 12 weeks (61%) looking and considering which model to buy. Only 24% of consumers spend less than 4 weeks.
Over the past twelve months, data from CarPriceCheck indicates that dealer transaction prices have been forced down by 1.6% with Internet retailers displaying a smaller 0.7% fall on a basket of randomly chosen popular sellers.
However, CarPriceCheck says that evidence is growing that the import price advantage is being eroded by a weaker sterling and a European wide increase in right-hand surcharges from manufacturers. Transaction prices on the same basket of models have risen by 1.82% since February 2002.
CarPriceCheck analysed responses from 1,178 car buyers between January 20 and February 7th.
