January has been an extremely strong month for car sales, with a 2.3 per cent increase in registrations recorded, according to the latest figures from the Society of Motor Manufacturers and Traders (SMMT).
The main driver of the growth, according to many industry insiders and onlookers, was buyers attempts to purchase cars before the changes to the vehicle excise duty, which will make a number of cars more expensive to run from April this year.
The SMMT explained that the number of low-emissions cars sold in January was up by a staggering 20 per cent ahead of the tax changes, which will particularly impact the cost of owning green cars. Currently, and until the end of March, low-emissions vehicles are tax free and will be in the future.
Those purchasing eco-friendly cars after the 1 April tax change deadline will have to pay a flat rate of £140 per year to tax their vehicle after a slightly lower rate in the first year of ownership.
The actual number of vehicles sold over the first month of the year was 174,564, which is the largest number since 2005.
Chief executive at the SMMT, Mike Hawes, said: “2017 got off to a good start in the new car market, buoyed by a great range of new models which are safer and cleaner than ever before.
“It’s encouraging to see alternatively fuelled vehicles benefiting from this positive growth, reaching a record market share.”
Talking about the year to come more generally, he added: “After record growth in 2016, some cooling is anticipated over the coming months, but provided interest rates remain low and the economy stable, the market is in a good position to withstand its short-term challenges.”
Dealers looking to cash in on what is likely to be a continuing hot market for eco-friendly vehicles, such as electric or hybrid cars, could increase their exposure to this market by stocking a higher number on their forecourts and in their showrooms. Anyone looking to change their stock offering in the coming months needs to ensure they update their traders combined insurance to include each and every new vehicle.