Interest rates close to record lows, cashback offers, VAT at 15%, 0% finance deals, falling residuals: there has never been a better time to buy a new or used car.
A small but growing band of retailers, carmakers and journalists are starting to recognise and promote this fact and while public reaction has so far been muted, the New Year will see renewed optimism – and dealers need to take advantage.
AM is launching a media campaign to change the tone of reporting in the national press and on TV from one of doom and gloom about falling car sales, manufacturing plants cutting production and business closures and redundancies to one promoting the amazing deals that are available to retail buyers. And why there has never been – and never will be – a better time to buy a car.
Look at the facts:
- VAT cut from 17.5% to 15%.
- Three- and four-year 0% finance deals from many carmakers, including Citroën which has revived its ‘no VAT’ deal on selected models.
- Competitive PCP deals, including zero deposits.
- Interest rates currently at 1.5% and tipped to fall to as little as 0.5% in the second quarter, with some suggesting 0% is not inconceivable.
- Cashback offers from several manufacturers.
- Two-for-one offers from dealers, including Central Garage on the Isle of Wight (buy Citroën C4 Picasso, get C1 free), Broadspeed in Essex (two for one on the Dodge Avenger and Kia Magentis) and EMG Mazda in Norfolk (buy CX-7, get Mazda2 free).
On top of this, new car transaction prices are up to 10% lower than a year ago, making cars more affordable.
And a raft of low emission, high fuel efficient models could save buyers money on running costs.
Carmakers have a glut of models parked in fields which they are desperate to get out into the market. For retailers there are deals to be struck on pack purchases, while carmakers will now listen to proposals on interest-free stocking and delayed payment for cars.
AM, with support from the industry, is taking the message to the media in an attempt to encourage the public back into showrooms.
Last month, AM reported on David Waite, of Monty’s Suzuki in Sheffield, who was interviewed on his local BBC radio station about the low prices of new and used cars.
“Next year the manufacturers will put up their prices and the price of a used car will also go up – it’s never been a better time to buy a car,” Waite told AM.
His views were supported by Kieren Puffett, editor of parkers.co.uk, the car buying advice website. “If you have the cash then there is a wealth of great deals to be snapped up. Dealers and manufacturers are desperate to shift stock and have some really strong offers,” he said. “It’s hard to see how the promotions can get any better.”
Vauxhall, Chevrolet and BMW retail group Peter Vardy Ltd in Scotland is offering discount savings on local radio via its ‘Incredible Bulk’ sale. It is also attracting customers with free servicing, nothing to pay until Easter, cashbacks and 0% finance.
“The deals on new and used cars are as good as they are going to get,” said group chief executive Peter Vardy.
Waite’s point about prices rising this year is crucial – and those rises won’t just be down to carmaker actions.
With Government spending huge sums of money to try to counter the recession, analysts expect taxes to rise in 2010 to pay for it. VAT of 20% has been suggested.
For used cars, the massive drop in residual values means prices are now much lower than a year ago.
Figures obtained by AM from residuals pricing guide CAP reveal that the average value for a three-year/30,000- mile lower medium car has fallen by 20% from December 2007 to December 2008.
Upper medium cars, executive cars, MPVs, convertibles and supercars also exceeded a 20% drop while 4x4s fell by nearly 30% (see table).
Manheim’s report, meanwhile, shows wholesale used values down 21% last year, while overall average sale prices in December dipped 3.1% compared to November.
But BCA says in its latest report that used values across all sectors, while much lower than a year ago, have started to stabilise. In December they actually edged up slightly.
Let’s get the message out there: It really has never been a better time to buy a new or used car.