New car sales fall for a fifth month as buyers still wary

SALES of new cars in the UK fell again in November despite a looming VAT rise in January.

Registrations were down 11.5 per cent to 139,875 compared with the same month last year, according to figures from the Society of Motor Manufacturers and Traders (SMMT).

That represented the fifth consecutive monthly fall after the end of the scrappage scheme – which helped to inflate figures – in May.

The VAT rise, which is due to come into place in January, has so far failed to trigger a rush of buyers to take advantage of the lower rate.

However, stripping out previous car sales linked to the scrappage scheme, the SMMT claimed underlying sales were up 14 per cent.

Diesel car sales continue to overtake those of petrol cars, accounting for 53 per cent of the market in November.

SMMT chief executive Paul Everitt said: “Registrations are expected to fall next month, but demand may benefit from motorists looking to avoid the January VAT rise.

“Next year will continue to be challenging as consumer spending tightens and the government’s austerity measures take effect.”

Sales for the first 11 months of 2010 now stand at 1,907,029 – a 3.4 per cent rise on the January to November 2009 period.

The SMMT expects car sales to be up two per cent overall next year, to be boosted by a strong December.

However, it is forecasting a five per cent drop next year. The SMMT said there had been an upturn in the sale of fleet vehicles.