In September of this year, new UK car sales peaked at their highest monthly total for five and a half years. This means that car sales have increased for 19 consecutive months – displaying positive growth in the market place.
The Society for Motor Manufacturers and Traders (SMMT) said 403,136 new cars were registered in the UK, a rise of 12.1% compared to the same month in 2012. Whilst September is characteristically a strong month for car sales, SMMT believe that the latest 63-plate attracted new buyers.
Of these sales, cars made in the UK accounted for one in seven and with 20,600 vehicles sold, Ford’s Fiesta remains the UK’s top selling car. Vauxhall’s Corsa comes in at second place with 14,500, followed closely by the Ford Focus with 14,295 sales.
The SMMT’s chief executive, Mike Hawes, said: “The UK market is reflecting growing economic confidence. Robust private demand has played a major role in this growth, with customers attracted by exciting, increasingly fuel-efficient new models which offer savings in the cost of ownership.”
The growth also reflects buyers returning to the market after the financial uncertainties of the recession. Whilst car-owners statistically replace their vehicles every three years, the economic downturn saw many spending on repairs rather than cashing out on a new car. Furthermore, it’s been three years since the vehicle scrappage scheme ended, so cars bought then would be around three years old and due for a renewal.
Alongside these factors, it’s also believed that the type of financing deals available have boosted sales and attracted new buyers. The ability to lump together payments with servicing and vehicle excise duty has been highly effective, not the mention the cost of car insurance falling at its fastest rate in 20 years.
In fact, the latest AA British Insurance Premium Index showed that the average cost of annual cover fell from £648.61 at the end of September 2012 to £568.32 at the same time this year. When asked why insurance was becoming cheaper, Simon Douglas, director of AA Insurance, said the car insurance market has become intensely competitive.
These days, the UK car market is the second biggest in Europe after Germany and so far this year, UK buyers have bought 1.79 million new cars, compared with Germany’s 2.22 million. The gap between the two has shrunk 6% since this time last year.
Richard Lowe, an analyst at Barclays, said: “Attractive finance packages are offering consumers more clarity on running costs, which even with a more promising economic outlook is an important factor for those on a budget. As we head into the quieter months, I suspect we’ll see sales hold firm, keeping the UK market zooming ahead of our European counterparts.”