VED tax changed on April 1st; it is predicted to have pushed sales beyond 40,000 last month

New car sales figures are heading for a record March as an anticipated 40,000 motorists brought forward their planned purchases in order to avoid Vehicle Excise Duty changes which came into affect on the 1st April 2017.

With figures for the month due this week, some estimates predict that the biggest-ever March sales total will have been recorded in the UK, with up to 550,000 new cars being registered. That would be an increase of around 6% compared with March 2016, when 518,707 new cars were registered.

Car dealers are using the VED rises in their sales pitches to potential customers, particularly the large number of car buyers currently on PCP finance deals, which have the flexibility to allow owners to exit a contract early and sign up for a new, lower-tax car.

The VED changes affect cars costing more than £40,000 to the tune of hundreds of pounds a year, meaning that some drivers might save well over £500 over a two-year PCP deal by switching to a car with a lower VED rating.

Everything you need to know about VED

The sales distortion caused by the new VED system is likely to have repercussions throughout the year, with month-on-month drops in new car registrations expected in April, May and June.

The industry continues to predict that full-year new car registrations will fall in 2017 as Brexit takes effect and economic confidence drops. The Society of Motor Manufacturers and Traders is predicting that a total of 2.54 million new cars will be registered this year, compared with 2.69m last year. There are also concerns that interest rates will rise, pushing up the cost of car finance.

Distributors who had to forward-order production late last year will also cut back supply during the remainder of the year and that will push down registrations.

Last month’s new car sales boom follows one of the quietest Februarys for more than half a decade.

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Comments
7

4 April 2017
Now just watch the new car market collapse! Nobody in their right mind would buy a car that last week was £20 to tax but this week £140, the used car market will boom over the next few months and the brand new registrations, other than business vehicles, will probably be at an all time low, of at least the lowest they have been since the 08 crash!

4 April 2017
Cageman86 wrote:

Now just watch the new car market collapse! Nobody in their right mind would buy a car that last week was £20 to tax but this week £140, the used car market will boom over the next few months and the brand new registrations, other than business vehicles, will probably be at an all time low, of at least the lowest they have been since the 08 crash!

Yes, and watch it get blamed on Brexit.

4 April 2017
Cageman86 wrote:

Now just watch the new car market collapse! Nobody in their right mind would buy a car that last week was £20 to tax but this week £140, the used car market will boom over the next few months and the brand new registrations, other than business vehicles, will probably be at an all time low, of at least the lowest they have been since the 08 crash!

An additional £120 a year! Something has gone very wrong in ones life if you cannot afford that.

4 April 2017
Yes he put the stamp duty so high to discourage second homes,private landlords unless you are one of his mates with 12 properties and exempt and this stup change that will stop many people from up and downsiznig,mobility for jobs and this pathetic ill thought out tax whereby you gain if you buy a v8 Mustang as under £40k but lose out if you buy a supermini or want metalic paint on a Discovery Sport thus going over the £40k threshhold,to think he gets £13500 per day as onre of his jobs with Blackrock make me sad that the world is the way it is.Certainly Osborne can make the personal wealth just shows what the boys network with Cameron and Blair etc is like.

4 April 2017
+1

4 April 2017
My son works in a new car dealership. He said more cars were registered by the dealer than in previous months but otherwise, March wasnt as good a month as they expected for new buyers. Same across other dealerships he has contacts in.

289

4 April 2017
....this may be because, despite all the articles on/in the news, and manufacturers websites .....public awareness of the new VED was low. But with all the pre-reg at least those who have only just woken up will get a second bite of the cherry.

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