Analysis of new car incentives this month
Target Price: This month’s Analysis of new car incentives
• Our recent research data suggests that consumer demand is outweighing industry desperation to sell cars resulting in a month-on-month decrease in the average cash Target Price discount from 8.4% (£3078 per car) to 7.9% (£2959 per car).
This reverses the emergence of an upward trend in showroom cash savings that we identified last month and highlights just how volatile and unpredictable the new car market is at this time.
• Some manufacturers have temporarily removed sales targets and the additional registration bonuses that usually accompany target-based sales performance, and have told dealers to just sell within their standard trading margins.
So without the pressure of having to meet sales targets and without as many added cash incentives from manufacturers to deploy, it is unsurprising to see some dealers almost choosing the terms under which they’ll sell cars with the inevitable negative effect on Target Price cash discounts.
• The Target Price PCP giveaway value from manufacturers has marginally improved, with the average APR trimmed by 0.2% to 4.2% and the average finance deposit contribution per car up by £24 to £1689.
Our view is that manufacturers are more interested in focusing their efforts on dealer sales targeting and cash and finance trading support into making quarter three of 2020 the period that will define their recovery from the Covid 19 shock.
• There are now eight manufacturers offering a 0% APR PCP option with Mazda, Suzuki and Vauxhall leading the way with this deal available on 100%, 86% and 83% of their respective on-sale models.
• Citroen dealers are the most generous when offering an average cash Target Price discount across a model range at 13.1%, followed by Seat and Volkswagen at 11.9% and 11.8% respectively.
• Mitsubishi has recorded the highest month-on-month increase in the average cash Target Price saving, with the typically achievable showroom discount across the model range up by 5.9% to 10.6%.