New car discounts reach £16.8 million as dealers look to attract buyers

Dealers have increased new car discounts by more than 10 per cent since February, in a bid to maintain sales. The move equates to savings of £16.8 million off manufacturer list prices across the market, according to the latest research by Britain’s leading consumer champion and new car buying platform, What Car?

Analysis of the UK new car market by What Car? Target Price mystery shoppers found the average discount on a new car at the end of May stood at £2,595 – or 7.9 per cent off the average list price.

The latest May new car registrations figures from the Society of Motor Manufacturers and Traders (SMMT) shows the UK new car market is down 3.1 per cent for the year, with private registrations down by 2.9 per cent. Business registrations are down by 39.8 per cent for the year.

Dealers are offering larger discounts to counter the decline in sales, according Rachael Prasher, managing director of What Car?: “Across the UK car market, we are seeing manufacturers slash cash prices by £16.8 million. This isn’t manufacturers panicking or throwing in the towel, but using the basic economic rules of supply and demand to maintain sales volumes.”

Across all manufacturers, Citroen was found to offer the best cash discounts on its vehicles, with 12.8 per cent off the list price. Volkswagen and Seat dealers offer the second highest price reductions, at 11.5 per cent and 11.0 per cent off list prices, respectively.

Estate cars, MPVs and luxury cars came with the highest discounts, at an average of 10.3 per cent across the three segments, while the typical discount on SUVs, hot hatches and sports cars were all below 6 per cent.

Prasher added: “The differences in discounts across sectors shows manufacturers are being tactical with their approach – offering larger cash reductions in areas with less demand, while keeping prices stable in sectors they know are popular and sell well.”