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Target price: BMW drives luxury car discounts high

AM has teamed up with What Car? Connect, the data marketing and insight service, to produce a monthly look at used car sales and target price data.

The latest analysis looks at the premium end of the market – luxury cars.

The average 'target price' discount for the luxury car segment is currently 16%, which is 5.9% higher than the 10.1% all-segment average.

That makes luxury cars What Car?’s most discounted model category, being 3% clear of executive cars and 4.5% ahead of estate cars.

Luxury cars have also seen the biggest average 'target price' discount rise over the past year, of no less than 42%. 

This significant increase has largely been driven by BMW, with factory bonuses of as much as £20,500 per car.

And that’s in addition the dealers’ usual trading margin.

Unlike their key Audi and Mercedes competitors BMW allow these bonuses to be used for cash discounting, as well as finance deposit allowances and contract hire payments.

The highest individual model discount goes to BMW with a 36.4% (£23,719) saving on the ActiveHybrid 7 SE.

Top five average 'target price' discount

BMW 7-series   30.3% / £21,368
VW Phaeton  15.7% / £8653
Audi A8   13% / £8780
Jaguar XJ  12.8% / £9211
Mercedes S-Class 7% / £5011

Volkswagen is offering £7,000 discounts on the Phaeton in addition to any dealer discount, while Audi has targeted its incentives more narrowly, offering an £11,200 finance deposit on Sport Executive models only.

But Lexus and Mercedes choose not to scrap for share in this way, their dealers confidently restricting discounts to between 6% and 7%.

It’s unusual to see such high discounting of luxury cars, especially as there’s usually less pressure for sales in this segment.

Prestige makers are normally keener to protect residual values and their brand.

But poor sales across the rest of Europe have probably pressured the recovering UK market into absorbing some excess production. With no indications that discounting is about to reduce, buyers should be able to enjoy significant savings for the rest of the year.

> What Car? Connect

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