New car prices still falling after two years

26 June 2001 #SMMT News

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

consumers want.’

Notes to editors

  1. 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.

  2. The forecast for total new car registrations this year

    is 2.25 million units.

  3. 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?

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