Finance deals help drive up new car sales in Britain

Marion Dakers

CAR SALES in Britain have motored ahead for the 16th month in a row, outpacing the rest of Europe and providing a boost for manufacturers.

Almost 215,000 new cars were registered in June, up 13.4 per cent on the same period last year, the Society of Motor Manufacturers and Traders (SMMT) said yesterday.

These bumper sales – with gains across private, fleet and business vehicles – took the total number of cars registered in 2013 so far past 1.16m.

“While there are still potential challenges ahead, recent robust growth suggests that the market is on course to perform well ahead of 2012 levels,”said Mike Baunton, SMMT’s interim chief executive.

The industry group said attractive financing deals linked to record-low interest rates and a growing interest in switching to more fuel-efficient models had driven some of the growth.

Demand for new cars is such that the used vehicle market shrank five per cent in the first quarter of the year, according to figures from Experian.

The boom in new cars sales in Britain compares to a 20-year low in the European Union.

“The UK car market’s resilience reflects specific local conditions, especially consumers spending their PPI compensation claim windfalls, record customer discounts such as zero per cent finance and the release of demand pent-up during the recession,” said John Leech, head of automotive at KPMG.

The Ford Fiesta retained its crown as the best-selling model in Britain, with showrooms shifting 63,040 vehicles during last month.