Green car sales fall as grant is cut

The reduction of a grant for those driving electric and hybrid cars has led to a fall in sales of such vehicles, according to new figures.

The number of people applying for the Plug-In Car Subsidy for new cars has fallen to its lowest level for two years, after the grant was reduced from £5,000 to £2,500, from March this year.

The figures, released by the RAC Foundation, showed that only 4,200 drivers applied for the grant in the second quarter of the year, down significantly from the 17,500 motorists who applied for it in the first quarter of the year.

The increase in sales in the first quarter was indicative of drivers rushing to get their hands on new green cars ahead of the grant reduction.

Dealership owners will, of course, be disappointed by these latest sales figures for hybrid and electric cars. Some may want to alter their stock offering to reflect the fact that environmentally friendly cars have fallen out of favour with drivers. Changing stock can be a wise move in response to variations in the market, but dealers should always make sure they update their traders combined insurance to include their new stock.

Steve Gooding, the Director of the RAC Foundation said: "The cost of green cars is pivotal to their take-up and the market will remain acutely sensitive to changes in price, whether that is driven by manufacturers or ministers."

"Given that a 5p charge for a plastic bag changed the shopping behaviour of millions, it should be no surprise that when thousands of pounds are at stake drivers are very shrewd about their buying decisions," he added.