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Rethink for May to end roll over

Carmakers, nervous about the release of the Competition Commission report into new car pricing, have been cautious with their finance plans for the second quarter.

Many had expected the Government to call for an unbundling of finance and insurance deals to create more transparent pricing.

As a result, some have simply rolled over offers which were due to end in March. Others have set short term campaigns which will end in May.

The two key players, Ford and Vauxhall, adopted different strategies. Ford extended its programme for another four weeks.

Expect a significant new package from May 1 now the Government has released the report.

Vauxhall tried to pre-empt the findings and was wrong-footed. It now has a complex structure of cashbacks, 'customer value' packages on selected models and guaranteed equity plans which must make its business managers' brains fry. Just think: only five years ago the most complicated product around for retail customers was hire purchase.

There are some more inventive schemes around. Honda Finance has created a variation of its Aspirations PCP which is based around 0% interest. It combines the best of a 0% hire purchase with low monthly repayments because of the final payment element. Interestingly, it is available on terms up to 24,000 miles a year which will make it an attractive cash-for-cars package for high mileage company car drivers.

Peugeot is also moving down a low deposit, low payment route with its popular 206 range. Arch rivals Renault, surely the most active in finance packages, is sticking with a simple 0% hire purchase for all but a few vehicles; thus avoiding the problem of falling residual values.

Finally, it is worth noting how Rover turned to finance to pull itself back from the abyss. Dealers say now the cars are properly priced and funded they can't get enough of them.

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