And it means the UK is now Europe’s second biggest car market, sitting just behind Germany.
So why were so many of us splashing out on new motors at a time when austerity driven belt-tightening was apparently the order of the day? And can new car sales motor on through 2014? Let’s take a look…
Why did new car sales soar in 2013?
December 2013 was the 22nd consecutive month that UK car sales continued to rise, and the increasing demand for new cars has become one of the more obvious pointers towards the UK’s recovering economy.
And it’s a situation that is at odds with the rest of Europe, where sales have been in decline for the last six years – surprisingly, Spain was the only other major European market to see an increase in sales, thanks largely to a nationwide scrappage scheme.
So why is the UK bucking what appears to be a Continent-wide trend?
It seems that a combination of cheap credit deals – personal loan rates fell to their lowest ever levels last year – and increased consumer confidence are two of the major reasons behind the continued sales growth.
Industry figures show that three-quarters of sales to private buyers involve a financing package of one kind or another, and analysts have also singled out mis-sold PPI refunds as another contributory factor (the average pay-out of £3,000 would make for a decent down payment for a new car).
Over the coming weeks, and leading up to the release of the new ‘14’ number plates on March 1, we’ll be looking at the best ways to finance a new car purchase, so keep an eye out for that, regardless of whether or not you’ve received a bumper PPI pay-out.
It’s not only a new found confidence and access to credit that has boosted the new car sales figures, as the types of car we’re buying could also be a factor…
Changing face of UK car sales
A change in buying patterns, possibly fuelled by the ever-increasing price of petrol and diesel, has seen motorists move away from the upper medium classed vehicles – for instance, Audi A4, VW Passat or BMW 3 Series – and instead go for more fuel-efficient ‘super-minis’, which now account for 36% of all sales.
This is highlighted by the fact that the Ford Fiesta was last year’s top selling car, and five of the top ten sellers were super-minis. The only upper medium class car to make the top ten was the ever-popular BMW 3 Series, which was the UK’s seventh best seller.
And green machines are slowly but surely getting a foothold in the market as sales of hybrid and plug-in (pure electric) cars rose by 17.5% in 2013.
If you’re considering a hybrid, check out the video below…
Will sales motor on through 2014?
Forecasts predict that UK car sales will continue to increase throughout 2014, but the rate at which they do will be largely dependent upon the rate of PPI payouts in 2014 and the availability of good finance deals – if both of these slow down, then this is expected to have a direct effect on the number of new cars sold.
And growth could also slow down if manufactures turn their attentions to the European market – which is also expected to pick up next year – and no longer feel the need to offer incentives to the UK market.
So, if you’re thinking of buying new, March 1 could be the ideal time. Watch this space!