Car finance deals fuel biggest ever market
New car buying in the UK hit record levels last year due to low interest rates, attractive car finance deals and increased consumer confidence. There were 2.6 million new car registrations in 2015, an increase of 6.3% on 2014 and the highest ever recorded.
The previous record year was 12 years ago in 2003 when 2.579 million new cars were sold. This is only the fourth time in history that the market has surpassed 2.5 million vehicles in a full year.
Of the overall total, some 1.4m units were fleet and business registrations, a rise of 9.8%, and another new record. Fleet and business sales were responsible for over 54% of all new registrations in 2015, with the remainder coming from private motorists.
Four years of growth
The latest figures mark four years of consecutive sales growth, with the UK car market having posted increases in all bar one of the past 46 months.
The figures were further boosted by a highest ever performance in December, which saw 180,077 new cars registered – up 8.4% on the same month last year and another new record.
Private demand saw an increase of 2.5% for the year overall and a 10.9% gain in December, as motorists took advantage of the great deals available.
Across the market, increases in volume were reported for all types of fuel in 2015, with petrol and diesel registrations up 8.4% and 3% respectively.
For the years as a whole, petrol sales finishing slightly ahead of diesel sales at 1,283,857 units (48.8%) compared to 1,276,871 (48.5%) The market share for diesel cars fell by 1.6% from 50.1% of the previous year while the share for petrol cars increased by 1.0%.
Alternative fuel demand grows
Demand for alternatively fuelled vehicles grew 40.3% last year, securing the biggest ever market share at 2.8% for a year as more buyers than ever before looked at buying green, more environmentally friendly vehicles.
Some 72,775 alternatively fuelled vehicles were sold in 2015, compared to 51,853 in 2014. Amongst these, plug-in hybrids experienced phenomenal growth, with volumes more than doubling, while pure electric vehicles saw an uplift of around 50%.
The Society of Motor Manufacturers and Traders (SMMT), the trade association of the vehicle manufacturers said that new car buyers had taken advantage of attractive finance deals and low inflation to “secure some of the most innovative, high tech and fuel efficient vehicles ever produced.”
Small cars continued to be most in demand, with the nation’s three best sellers being the Ford Fiesta, the Vauxhall Corsa and the Ford Focus.
Top ten cars by sales in 2015
Finance deals remain strong
With many great finance deals available, vehicle finance was very popular throughout 2015 and demand remained very strong.
The most recent figures from the Finance Leasing Association show that in the 12 months to the end of October 2015, private consumers bought 961,523 new cars worth £15.7bn using point-of sale finance through new car dealerships, a 9% year-on-year increase.
And for the same period, UK businesses bought 510,810 new cars on finance, a 6% year-on-year rise.
How to take advantage
With so many positive indicators, now might be the perfect time to invest in a new car, with four in five new car purchases currently made on some form of finance.
Many private motorists acquire a new car through personal contract purchase (PCP) plans, which account for 70% of all new car finance deals.
Under this method, the buyer puts down a deposit, pays a monthly figure for a set period, typically two or three years, and at the end of the term hands the car back to the dealer or buys it for a pre-agreed price.
It’s simple, easy and there are currently some amazing deals available – which is why it’s so popular.
What other options are there?
For businesses of all sizes, business car leasing is often the answer as it provides known monthly costs with no residual value risks.
Maxxia has a range of special offers for businesses on a variety of vehicles, including 4x4s, saloons and carefully selected executive options from manufactures such as Alfa Romeo and Mercedes.
There is even a dedicated website – businesscarleasing.com – which has details of the best deals in the market and which can supply any make or model of car.
Some of these deals are available for a limited time only, and packages can be tailor-made to suit every need, including varying mileage allowances and payment profiles.
Another option for individuals could be personal leasing, which can offer a financially viable alternative to purchasing a new car outright, as again there are no worries about the cost of depreciation – one of the highest costs associated with buying a new car.
Maxxia also offers a personal leasing scheme at www.myleasedeals.com where there is the opportunity to browse a huge range of personal leasing offers for some of the very latest new models in the market.
What about car salary sacrifice schemes?
One increasingly popular method of providing a new car is one being offered by growing numbers of employers through the organisation’s benefits package.
By surrendering a set amount from their salary each month, upon which no Income Tax or National Insurance is paid, employees can elect to lease a brand new car.
Such cars come with all-inclusive packages, so that employees do not have to worry about insuring, taxing, or servicing the vehicle themselves. This also has the added advantage of helping employers meet duty of care issues and making potentially significant financial savings.