We’re in the midst of recession – or are we? I can’t quite keep up with the dipping in and out. But one thing is for sure – the economic climate hasn’t stopped us splashing the cash on shiny new motors, as the latest figures from the Society of Motor Manufacturers and Traders shows that new car registrations grew by 11% in May. And with a total of 180,111 new cars shifted from the forecourts, more were sold this May than in any of the corresponding months during the previous six years. So do these stats mean we’re witnessing the green shoots of economic recovery in action?
Why the resurgence in the car market?April saw inflation fall to 2.4% - the lowest it’s been this year – but while this has undoubtedly given many households a welcome boost, it’s unlikely that it would be enough to give anyone the extra spending power to go out and buy a new car. So what could have prompted this this upturn in sales? One possibility is that people have been hanging on to their cars, perhaps because they have been feeling the squeeze and a new car has not been a realistic option, and this has delayed the regular replacement cycle. Another reason could be that more people are looking to buy newer, more fuel efficient vehicles as a reaction to the recent rise in petrol prices. Although the screen prices on such cars is usually pretty high – for instance, the ultra-fuel efficient Chevrolet Volt will set you back £35,000 – it could be that people are willing to take this initial hit in order to save money in the long run on fuel costs, road tax and possibly even car insurance. If more people are buying new cars as a longer term investment than in previous years, then we could see a permanent change in the buying cycle that will lead to longer periods of slower activity in the market - and there is anecdotal evidence to suggest that dealership footfall is already on the wane. It could also be the case that people are finding they are being accepted for better credit deals once again, be that through dealership finance deals or personal loans. New car buyers may also be dipping into their savings given that saving accounts rates are currently on the floor.
This year’s best selling cars
|May 2013||Sold||Total 2013||Sold|
|1||Ford Fiesta||9,316||Ford Fiesta||51,708|
|2||Ford Focus||7,522||Ford Focus||38,547|
|3||Vauxhall Corsa||6,634||Vauxhall Corsa||37,279|
|4||Volkswagen Golf||5,247||Vauxhall Astra||26,657|
|5||Vauxhall Astra||5,211||Volkswagen Golf||26,656|
|6||Nissan Qashqai||4,243||Nissan Qashqai||22,605|
|7||BMW 3 Series||3,828||Volkswagen Polo||18,854|
|8||Volkswagen Polo||3,201||Peugeot 208||17,166|
|9||Peugeot 208||3,083||BMW 3 Series||16,156|
|10||Audi A3||3,055||Nissan Juke||15,623|