The average price of a new car fell again in May, according
to figures from the Alliance and Leicester Car Price Index. Down 7.9 per cent
last month, the latest drop confirms more than two years of falling prices in
the new car market.
Since the first monthly analysis of price trends was published
in July 1999, the Alliance and Leicester Index has not recorded a single month
in which new car prices have risen. Each report has confirmed a downward trend,
with the biggest drop in December 2000 when the average retail price dropped
by a massive 10.4 per cent, compared to a year earlier.
The latest fall comes as new car registrations are booming
in the UK. Since the start of the year, total sales have risen by three per
cent, driven by a surge in demand from private buyers. Demand from private buyers
has risen by more than 18 per cent, with 516,901 cars sold in the first five
months compared to 437,864 units in the same period last year.
SMMT chief executive Christopher Macgowan said, ‘Consumers
are not stupid. They know how and where to get the best deal. As prices continue
to fall, UK franchised dealers are clearly the favoured option for most people.
The local franchise offers extremely competitive prices, with the added peace
of mind that comes from strong aftersales support and this is clearly what sophisticated
Notes to editors
- New car registrations by private buyers from January to
May accounted for more than 49 per cent of total sales compared to 43 per
cent last year.
- The forecast for total new car registrations this year
is 2.25 million units.
- The Car Price Index is independently verified by the Centre
for Economics and Business Research (CEBR) and is produced by the Alliance
and Leicester in association with What Car?