The UK’s new car market grew by 8.4% in March, making it the biggest month for UK car sales since records began.
The Society of Motor Manufacturers and Traders (SMMT) said the record performance came as buyers seized the chance to buy cars before the new vehicle excise duty (VED – an annual tax known as ‘road tax’ in the UK) rates come into force.
From 1 April, under the new system all new cars, except for those with zero emissions, are subject to an annual flat rate charge.
Some 562,337 new cars were registered in March, more than double the number in the first two months of the year combined. Some 820,016 new cars were sold in the first quarter of 2017, up 6.2% on the same period in 2016 and setting a new record for the quarter.
Following the recent trend, consumers are increasingly looking to invest in the latest low-emission technology, with March seeing a 31.0% surge in registrations of alternatively fuelled vehicles. Petrol cars experienced a notable uplift too, growing 13.2%, while demand for diesels also increased compared to the previous year, with nearly a quarter of a million buyers choosing them – the most ever in a single month.4
Fleets and businesses were the big contributors to market growth in March, with registrations up 12.6% and 11.9% respectively, though demand from private buyers also grew, with registrations climbing 4.4% to reverse the decline in demand seen during the previous month.
Mike Hawes, SMMT Chief Executive, said: “These record figures are undoubtedly boosted by consumers reacting to new VED changes, pulling forward purchases into March, especially those ultra-low emission vehicles that will no longer benefit from a zero-rate fee.
“This bumper performance probably means we will see a slowdown in April, exacerbated by the fact there are fewer selling days this year given Easter timing. Looking ahead to the rest of the year, we still expect the market to cool only slightly given broader political uncertainties as there are still attractive deals on offer.”
Simon Benson, Director of motoring services at used car website AA Cars, said: “Last month saw a flood of buyers rushing to beat the new vehicle excise duty charges that kicked in at the start of April, making March the biggest ever month for the UK’s new car market.
“Fleets – hit hardest by April’s tax changes – fuelled the sector’s growth last month as the biggest contributor to new car registrations, driving it up by a significant 12.6%.
“Meanwhile sales of alternative fuel vehicles, including some models which as of this month will no longer benefit from a zero-rate fee, grew by almost a third (31%) last month.
“This reflects recent AA Cars research, which shows that purchasing intentions for electric and hybrid vehicles has doubled over the last two years.
“Of course, the repercussions of this rush could mean that the new car market will see a considerable slowdown in the coming months – which could prove to be a boon for used car dealers.”
Registrations of new cars in the United Kingdom – By Marque