Dealer discounts have remained static in the last three months (March to May), despite a struggling new car market, according to a What Car? Target Price report.
UK car sales figures have fallen by 6.8% in 2018, with 1,079,049 sold to the end of May, but average cash discounts across the industry have remained flat at 8.3% – equal to £2,581.
Steve Huntingford (pictured), What Car? editor, said: “Despite market pressures our Target Price report has revealed that as an industry, dealers aren’t slashing prices to tempt buyers in in the face of a sales dip.
“And as demand for diesels continues to wane, deals on electric cars have actually started to shrink since March.”
“This could be a sign that they are looking to ride the market out until it stabilises or a clear indication of a manufacturing slowdown and models coming to the end of their life ahead of a switch to WLTP-approved models in September.
“However, it’s interesting to see the batch of low volume sellers who are still offering big discounts as they look to increase their market share. To combat the threat of these makers, big sellers Ford and Volkswagen are fighting back with lucrative deals, too.”
Q1 March to May: Top 10 manufacturer discounts versus market share
Q1 March to May: Top discounts by sector
Based on mystery shops, Target Price is designed to ensure a fair price for consumers but avoids the ‘race to the bottom’ for retailers.
The analysis of 7,500 different models on sale in the UK since the arrival of the 18-registration plate has revealed dealers have not been tempted to cut prices to attract buyers.
The What Car? Target Price was lower than the manufacturer on-the-road list price on all but 218 cars, but consumers were unable to get improved deals in May compared with March despite market pressures.
The report revealed Seat and DS dealers were offering the best savings in May.
The French premium brand averaged a discount of 13.06% with Seat at 12.98%.
Of the 15 companies offering above average discounts, nine had a market share of less than four per cent, showing the calculated push to convince buyers to switch brands.
Market leaders Ford and Volkswagen were still offering some of the biggest discounts as they look to hold onto their position at the top of the best-sellers list.
“As you would expect, dealers who are struggling with a 30.6% fall in diesel sales in 2018 to May, are offering the equivalent of an extra £888 (8.8% compared with 7.9%) off list prices compared with their petrol versions.
“At the same time, deals offered on plug-in hyrids and electric vehicles were down by an average of 2.1% in the quarter – as sales of alternatively-fuelled vehicles have increased year-on-year by 36.1%,” said Huntingford.
What Car?’s Target Price calculates a fair price for consumers to pay for any model as part of its What Car? New Car Buying service. It’s compiled by a team of expert mystery shoppers who haggle for deals across the UK.