New cars back in fashion?

Thoughts from the trade this week; there has been a slight slowdown as people enjoyed the bank holiday which is fairly usual for this time of year. Reports from our regional guys tell us that showroom footfall eased last month, but enquiries for new cars were up. This was probably due to some very competitive deals being offered and the speculation over the scrappage scheme which put a focus on the motor trade in the national news. Small economic cars which are low mileage and of the right pedigree continue to confound the trade by making very strong money in the wholesale market, although there doesn’t seem to be the confidence that these uplifts can be transferred to customers, as one sales manager told us ”these cars are making crazy money, but someone is buying so there has to be a market for them”

There is also now a distinct feeling that with used car stock continuing to be scarce the gap is very definitely closing and buyers looking at monthly payments can be better off buying new. Indeed if customers do not ask they may still think that nearly new is the way forward and like our European friends need to be aware of both prices. It will be interesting to see the new car sales numbers for April and though they are expected to still be in the doldrums, many dealers we spoke to have said they have achieved the revised targets set for them. We think the market has just corrected itself and if you take out pre-registered and buy-back numbers the figures should represent the fact that there are still buyers in the market looking for a deal on a new car and as used car stock is set to continue being hard for dealers to source until possibly September, the prices will remain high and new cars will now certainly present a viable alternative.