Car registrations accelerate to best February since 2004

The UK car industry has recorded its best February for new car registrations since 2004, reports The Financial Times.

A report by the Society of Motor Manufacturers and Traders (SMMT) found that around 83,395 cars were registered in February 2015. This was an 8.4 per cent year-on-year rise. The industry as a whole also notched up a record year in 2015, with industry experts citing the reasons for the strong performance as weak inflation, low fuel prices and cheap credit.

Business may well be good, but if you are adding more stock or higher priced vehicles to your showroom, be sure to check both your motor trade insurance and road risks insurance policies to ensure that you are covered.

While these results suggest that the UK car industry is recovering extremely well from the financial crisis around 2008, senior economists warn that the faced-paced growth is not likely to last.

Meanwhile, Volkswagen, whose reputation has been damaged by the emissions scandal in 2015, has seen its new car registrations fall 13 per cent compared with results last year.

Samuel Tombs, economist at Pantheon Macroeconomics, said: “High consumer confidence, lower petrol prices and cheaper unsecured credit have enhanced the attractiveness of car ownership, but these drivers will be less supportive of sales growth in 2016.

“Borrowing costs are likely to edge down in response to the recent decline in market interest rates, but they are unlikely to fall as sharply as they did last year.

“Meanwhile, consumer confidence has begun to fall and will be depressed further when the fiscal squeeze intensifies in April and inflation picks up.

“Growth in car sales, therefore, looks likely to moderate, contributing to a slowdown in the overall consumer spending recovery this year.”