March 2017 was the biggest month to date for new car registrations as a new number plate and changes to Vehicle Excise Duty (VED) encouraged car buyers to part with their cash.
Figures from the Society of Motor Manufacturers and Traders (SMMT) show that a whopping 562,337 new cars were registered last month, up 8.4 per cent on the same month last year.
The SMMT said the rise was down to consumers and businesses “seizing the chance” to buy cars before new VED rates came into force on 1 April. Under the new system all new cars, except for those with zero emissions, are subject to an annual charge.
In the first quarter of 2017, more than 820,000 new cars were driven off forecourts, a new record and 6.2 per cent up on the same period last year.
The SMMT said car-buyers are “increasingly looking” to invest in low-emission technology. In March there was a 31 per cent rise in registrations of alternatively-fuelled vehicles. Sales of petrol cars grew by 13.2 per cent and demand for diesels also increased, despite diesel falling out of favour with consumers recently.
Dealership owners can adjust the mix of stock they offer in their showrooms to reflect changes in consumer attitudes and many will consider offering more alternatively-fuelled vehicles on their forecourts. If you are considering making these kinds of changes, notify your motor trade insurance provider to ensure your entire stock of vehicles is covered under your policy.
Mike Hawes, SMMT chief executive, said: “These record figures are undoubtedly boosted by consumers and businesses reacting to new VED changes, pulling forward purchases into March, especially those ultra-low emission vehicles that will no longer benefit from a zero-rate fee.
“This bumper performance probably means we will see a slowdown in April, exacerbated by the fact there are fewer selling days this year given Easter timing.
“Looking ahead to the rest of the year, we still expect the market to cool only slightly given broader political uncertainties as there are still attractive deals on offer.”
The positive performance comes after the SMMT warned about the UK automotive industry’s trading position after it withdraws from the EU.
The body is calling on the government to ensure that the sector plays a central role in negotiations so that it secures a tariff-free deal.
The SMMT said that if no deal is secured by the time the two-year Brexit negotiations are up, World Trade Organisation rules would automatically kick in, a move the organisation estimates would add £1.8 billion onto the cost of fully assembled cars exported from the UK.