What Car? magazine has uncovered evidence that car dealers and manufacturers are offering car buyers cash discounts of £16.8 million to attract them into showrooms.
The consumer magazine claims that discounts have risen by more than 10% since February in a bid to support sales as new car registrations slipped to a 3.1% year-to-date decline to the end of May.
According to research which feeds into the magazine’s Target Price consumer guidance Citroen was found to offer biggest savings across all models and fuel types, with an average discount of 12.8%.
Meanwhile, What Car? Target Price mystery shoppers found the average discount on a new car at the end of May stood at £2,595 – or 7.9% off the average list price.
Rachael Prasher, managing director of What Car?, said: “Across the UK car market, we are seeing manufacturers slash cash prices by £16.8 million.
“This isn’t manufacturers panicking or throwing in the towel, but using the basic economic rules of supply and demand to maintain sales volumes.”
Dealers are offering larger discounts to counter the decline in sales, according What Car?
While Citroen was found to offer the best cash discounts on its vehicles, Volkswagen and Seat dealers offered the second highest price reductions, at 11.5% and 11% off list prices, respectively.
Estate cars, MPVs and luxury cars came with the highest discounts, at an average of 10.3% across the three segments, while the typical discount on SUVs, hot hatches and sports cars were all below 6%.
Prasher added: “The differences in discounts across sectors shows manufacturers are being tactical with their approach – offering larger cash reductions in areas with less demand, while keeping prices stable in sectors they know are popular and sell well.”