Officially buoyant new car registrations in March have done nothing to slow the pace of further price cuts as banks, finance houses and leasing companies extend their involvement in the UK retail car market, according to independent monitor, CarPriceCheck.com.
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Defying all other economic and commercial confidence indicators, record ’03’ new-plate registrations from 1 March were quickly followed by a further 1.3% average fall in transaction prices in April (month-on-month) with available discounts as high as 23% for Ford, 24% for Vauxhall, 16% for Renault, 14% for Volvo and 17% for Peugeot finding their way onto dealer forecourts.
For example, the average UK dealer transaction price on a Ford Focus 1.8 Ghia 5dr (MRRP: £13,895) was £13,264 in April 2002. Today, the average price stands at £12,940, but can be found as low as £11,841 (15% off).
Since January 1, the transaction price of a typical £12,000 family hatchback from a UK dealer has fallen by £345 on average.
Further price cuts are expected by June, when CarPriceCheck predicts dealer forecourts will be awash with pre-registered cars.
“This will supplement the increased activity from financial institutions and leasing companies, who’ve recently turned their attentions to private buyers by establishing strategic alliances with larger dealers and offering fleet sized discounts to the public,” said a CarPriceCheck spokesman.
Norwich Union recently joined the likes of Lloyds TSB in offering cut price UK sourced and supplied new cars. For example, Lloyds TSB is currently offering a Citroen Xsara Coupe 2.0 VTS (MRRP £16,695) for £12,509 – over £2,300 cheaper than the average franchised dealer discount.
CarPriceCheck believes such deals may ease the oversupply issues continuing to face manufacturers and help answer their calls for increased volume and market share.
“There is, however, a genuine fear that consumers may lose in the medium term as used car values could take a hammering as heavily discounted models are forced into the private arena,” the spokesman cautioned.
The current spate of promotional discounting on UK supplied cars is in sharp contrast to buyers looking to buy from Europe.
The plummeting value of the pound – down over 9% since last November – has crippled the import market. Transaction prices rose by another 1.51% on parallel imported models between March and April.
“Unless there is a dramatic reversal in the currency markets, which seems unlikely, the advantage now clearly lies with UK suppliers as manufacturers look to reassert their control over the supply chain,” the spokesman said.
The clearest indication that the import advantage is fading can be seen with the rising number of former import-only retailers and car supermarkets now dealing in the discounted UK stock now surfacing in the trade.
“Many have got stung badly by factory orders placed by their European suppliers. The savings they can source from home shores, especially when buying in bulk as many supermarkets do, makes the saving from imported suppliers almost negligible at the moment,” the spokesman said.
