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Manufacturers' offers put pressure on nearly-new

Carmakers were this week planning their final-quarter marketing campaigns against a background of considerable uncertainty. Sales in the past three months have been strong and customers are buying because they believe prices are low and deals are good.

The terrorist attacks in America may have dented confidence but dealers report the underlying demand for new cars remains strong. Product shortages mean many orders will be carried over into October but interest rates are the lowest for 30 years and borrowing money is cheap.

With new cars so affordable on finance, sales of nearly-new are being affected. Sir Peter Vardy told the Reg Vardy annual meeting that with more affordable new vehicles, the group was achieving growth significantly ahead of national figures. Some customers were purchasing new rather than used vehicles – a trend he expected to continue. It is a trend carmakers will want to encourage.

So the indications are that many of the programmes running through the late summer will be rolled forward, at least for another month until a clearer picture of consumer confidence emerges. In effect, that means marketing programmes such as 0% finance, low deposit PCPs and free insurance are likely to continue.

Companies using such programmes to greatest effect are Citroen, Nissan and Ford. The national advertising for Citroen unashamedly promotes its cashback offers and low rate finance deals, making the Picasso and Xsara ranges look extremely good value.

But it is not just the volume carmakers who see benefit in finance plans. The national advertising of a low rate PCP for the Bentley Arnage Red Label may be more symbolic than anything but at 6.6% APR the rate is competitive enough to make even millionaires think twice.

Trade in an executive car as a 50% deposit on a Jaguar X8 and you have nothing more to pay for two years.

HIGH STREET LENDERS (36-MONTH LOANS)
Loan Amount Lender APR Monthly Repayment
with PPP
Monthly Repayment
Without PPP
£2,000* Abbey National 15.9% £78.27 £69.18
Barclays 17.9% £82.70 £70.98
HSBC 17.9% £81.88% £70.89
Lloyds-TSB 19.8% £83.35 £72.16
NatWest 20.9% £84.09 £73.44
£5,000 Abbey National 10.2% £182.22 £160.75
Barclays 15.9% £201.07 £173.26
HSBC 13.9% £193.98 £168.68
Lloyds-TSB 15.9% £198.35 £173.03
NatWest 12.9% £190.68 £166.54
£10,000 Abbey National 8.8% £356.76 £315.51
Barclays 13.9% £390.71 £337.98
HSBC 10.9% £371.89 £324.52
Lloyds-TSB 15.9% £396.69 £346.07
NatWest 10.9% £371.56 £324.51
£15,000 Abbey National 8.8% £535.14 £473.26
Barclays 11.9% £568.98 £494.14
HSBC 9.9% £549.50 £480.33
Lloyds-TSB 15.9% £595.04 £519.10
NatWest 9.9% £549.98 £480.34
Source: Automotive Management**

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