New car registrations are at their lowest levels since 2013, so what is behind this latest trend?
These figures were released in the last few days by SMMT – the Society of Motor Manufacturers and Traders – and show that 2.31 million new cars were registered in 2019, a drop of 2.4% from the previous year. Compare this to 2.69 vehicles in 2016. The SMMT forecast a continued decline in 2024 of around 1.6%.
The decrease was anticipated, as this is a decline that has been going on for a couple of years now. The main cause for lack of customer confidence is the rather onerous legislation surrounding car emissions, the complexity of this legislation or customers’ inability to follow it, and a more than natural caution about electric and hybrid technology. Motorists seem to be adopting a ‘wait and see’ approach to new vehicles. A lot of people are still renting vehicles because they are unsure. Those looking for luxury cars like Rolls Royce are often renting using companies like OneClickDrive.com. For industry manufacturers, the fallout from Brexit and the hiatus of the last three years since the referendum have had more than a little to do with it.
If you want to bag a bargain, then you could do worse than aim for the prestige end of the diesel market, which has almost collapsed in the last two years, shrinking down to about 25% of overall car sales. You may find yourself restricted under new rules from various city centers and central town locations, but that might not matter to you depending on your motoring behavior. Or, you could take advantage of new technology and go for a hybrid or EV as uptake on these vehicles is still very low and forms a tiny percentage of the overall market share. Interest is increasing but proportional to the number of overall registrations, so, in effect, the uptake is still worryingly small.
Motor manufacturers are under huge pressure to move the market across to the new technology as EU rules bite this year coming into full effect in 2024, which means all new cars must comply with very strict emissions regulations. Brexit is not expected to make any difference to this as the UK government is fully committed to a full transfer from petrol and diesel vehicles by 2050. The SMMT believes that in order to comply with these latest regulations by 2024, the market share for EVs would have to reach 27%, whereas currently, it is resting at a very lowly 1.6%. If you add in hybrids to EVs, then you are looking at 56% market share up from its current level of 7.6%.
Why is the motor industry still so concerned about Brexit?
You might think it would be the impact of new EU emissions regulations, which the UK government intends to embrace even though Britain is set to depart from the Union very shortly. In fact, it is the uncertainty over trade deals which is muddying the waters and the impact that this could have on the movement of cars across the channel and the importation of car parts. Delays are one fear and expensive import tariffs. Some pundits think that now Brexit is definite, more confidence and stability will return to the car industry, but almost an equal number think the looming crisis over a no-trade deal Brexit is still casting a long shadow. So, if you are rubbing your hands with glee and think you can snap up a new car bargain, take a read through our checklist and make sure you really are a savvy buyer.
Know your depreciation – new cars depreciate hugely in the first two to three years but some more so than others.
Buy at the right time – a little canny knowledge about how the car industry works could put you in line for a bargain on the forecourt. Usually, motor dealers have to meet certain targets, which are calculated on a quarterly basis, so the end of March, June, September, and December. If you buy towards the end of a quarter, a dealer may be more prepared to barter and make you an offer if they are struggling to meet their quarterly targets. Don’t fall into the trap of waiting until the last day of the quarter as bonuses and incentives will dry up if the dealer has already met their targets at an earlier point. If you do pitch it just right then expect good offers on finance packages, tempting deposit contributions and lots of freebies
Avoid the new number plates – there tend to be more buyers around when the new plates are issued, and so you are less likely to land a good deal. On that note, you can create your own number plate at showplatesexpress.com
Buy out of season – buy your 4×4 in the summer and a convertible in the winter, there are generally fewer customers around
Check out incentives carefully – for example, discounted insurance packages which can be offered as a sweetener may actually be the same price as those available to you from other sources, perhaps even more. Don’t assume that just because something is offered as part of a package that it is good value for money. Equally, a dealer contribution towards a servicing package may cost them nothing but could tie you into something far more expensive than you would pay at the local garage. Under EU regulations, dealerships cannot insist that you return to them to have the car serviced, and their costs are always much higher than other alternatives. Don’t tie yourself into a three or four-year deal because they have chipped in some money as it could still end up costing you much more in the long run
Barter – if you are in the driving seat, literally, then don’t be frightened to really push hard for money off. Customers for new cars are in a really strong position at the moment and even with what seem like really good offers, and you can often persuade a dealership to go just that little bit further to clinch the sale.
