Dealers are predicting March’s record sales will lead to lower sales through the second quarter of the year.
A survey of dealers by Cap HPI shows that 79% believe sales of new vehicles will slow down in Q2.
The new VED regime, introduced this month, will also have driven high levels of tactical registrations in March, according to 76% of dealers.
March saw new car registrations rise by 8.4% to become the biggest ever month for the sector with 562,337 new cars registered.
Philip Nothard, consumer and retail specialist at Cap HPI, said: “It’s clear that dealers have had a bumper first quarter with strong new and used car sales.
“However, dealers are much less bullish about new sales the second quarter.
“The push on registrations in March, driven in part by the increased VED changes, appears to be a strategic approach rather than a mass registration of low-value vehicles.”
Dealers are overwhelmingly positive about used sales in the second quarter with 77% of those surveyed expecting positive results. It contrasts to negative sentiment on new sales with only 25% of dealers expecting positive figures and 57% expecting a negative quarter.
Nothard said: “Interestingly, sentiment on the impact of new VED rates on new sales in the first quarter is divided with 51% not stating it had an impact on sales. Continued strong incentive support and healthy consumer demand, is a strong influence.”