The number of price cuts offered by dealers on new cars has fallen by 40% in the past three months according to figures released by independent new car transaction price monitor, CarPriceCheck.
Forecourt transaction prices fell on only 382 models (10% of total available) during July compared to 630 (17%) in May and a year high of 934 (25%) in February. Coupled to this trend, recorded transaction price rises have also slowed by 30% in the same period.
"The figures clearly indicate that new car prices have settled in the UK, perhaps even bottomed out, with dealers operating on wafer thin margins their discount activity is now directed solely by special manufacturer promotions or cut backs," said Steve Evans, CEO of CarPriceCheck. "But this does not mean that dealers are not competitive - quite the opposite. It just looks like price cuts have peaked for the time being."
The internet, however, remains a 'hot-bed' of transparent pricing activity with nearly 4,200 price movements recorded by 15 of the leading online retailers in July – 37% of those models saw a rise in transaction price, the remainder fell.
Currently, price changes from the franchised dealer network are restricted to a handful of models from one range. For example, in July, transaction prices on 35 models from the Citroen range rose by an average of 6.3% to bring available discounts down to single figures for the first time since its launch in April. However, internet retailers - ironically those supported by the larger UK dealer groups - are still delivering significant shifts in price by manufacturer.
For example, Tins may have slashed 3.5% off 199 models from the Peugeot stable, but it also increased prices on 227 Vauxhalls by an 8.8% average and delivered a 9.8% increase on 143 Nissans during the same period. A similar story was delivered by Autobytel who reduced the price of a Renault by an average of 2.13% for 112 models with some recording price cuts of up to 16% (Renault Espace).
After feverish activity in June importers remained relatively stable last month with only Eurekar and Wundercars active, with the former slashing 1.6% off 306 models – over 80% of its range.
As in previous months, transaction prices for Renault, Nissan, Peugeot, Citroen and Mercedes remained the most fluid across all channels.
The majority of activity from Mercedes centred on the E-Class range. Whereas UK dealers increased transaction prices by an average of 1.8% during the month, imported prices from Carbusters fell by 4.81% and internet retailers Carview and Tins reduced prices by 1.96% during the month.
Volkswagen, normally rigidly priced, again demonstrated the ability of UK supplied Internet retailers to deliver market leading prices with JamJar reducing 86 models from the Bora, Polo and Sharan family's by an average of 7% - with discounts as high as 16.5% on some.
Mr Evans said: "UK dealers have stabilised their pricing, manufacturers are under increasing pressure on a pan-European scale to improve prices further still, but the internet is now coming into its own as a cost effective channel to market for larger dealer groups and household brands."