65-plate sales boom expected – but will sales match figures?

On the day 65-plate registrations are released, reports are predicting a record month for new car sales in the UK.

However, experts are warning that the real number of cars being driven off the forecourt may not match up to the figures claimed.

The forecasted rise in new car registrations for September comes after a 9% year-on-year increase in new car orders for July and August.

Experts believe this will be the 42nd consecutive monthly increase in new car registrations – but the situation is being complicated by the number of the pre-registered cars.

‘Growing distortion’

Glass’s head of valuations, Rupert Pontin, said: “Pre-regs are not a bad thing in themselves but they do create a growing distortion in the market.

“Customers need to see a sensible pricing difference between new cars, nearly new pre-regs and older vehicles.

“The flood of pre-regs creates substantial downward pressure on older vehicle values, which are falling.”

Finance deals on new cars have fuelled sales, but there may now be little room left for growth in this part of the market.

The boom in PCPs at risk?

The increasingly popular Personal Contract Purchase finance scheme, or PCP, may also be at risk, added Pontin.

“We have seen an ongoing explosion in PCPs but manufacturers are having to make them ever more attractive in order to continue to sustain growth in the market.

“At some point, we will reach a situation where no matter how much manufacturers provide support in terms finance, customers will stop signing new leases.”

It is also thought that government cuts will leave buyers will less to spend on new cars, although this effect will take time to filter down.

“It could be that in the final quarter of this year, we start to see the new Government’s austerity policies take effect,” said Pontin.

“There was some interesting sleight of hand in the Chancellor’s Summer Budget but most people will find themselves with less disposable income, which could affect their next car choice.”