Target Price Insights – New Car Discounts
Target Price this month: Analysis of new car incentives
· The average cash Target Price discount has remained broadly unchanged at 8.2%, or £2856 per car, because dealers appear to have accepted that ever-increasing discounts in a slow market are unlikely to significantly boost sales and will more likely set up unsustainable new year discounting expectations among customers.
·With annual sales targets largely now either met or unachievable, many dealers were looking to retain some much-needed profitability in any December orders taken.
· The average finance Target Price support from car manufacturers is down by 2.8%, month on month, to £1809 per car, based on a typically available 4.6% APR PCP offer.
· Twelve car brands are currently offering interest-free PCP deals, with Ford, Volvo and Toyota leading the way with 289, 92 and 79 deals respectively across their line-ups.
· The best typically available finance deposit contributions are £3921 per car from Audi, £2998 from Jaguar and £2500 from Jeep.
· Car buyers can currently take advantage of typically achievable cash and finance Target Price savings of £4665 per car, but this figure might fall significantly in the new year if there is a release in pent-up demand.
· The highest available average cash Target Price discounts across a model range remain unchanged, with Citroën dealers currently the most generous at 16.9%, followed by Seat at 14.4% and Nissan with a 12.7% saving.
· Smart has recorded the highest month-on-month increase in the average cash Target Price saving, with the typically achievable showroom discount across its model range up from 13.2% to 13.7%.
The average cash discount across the family car segment is 7.9%
· The average cash discount across the family car segment is 7.9%, or £2063 per car – just below our corresponding all-segment average. This represents more than £2.1 million worth of available savings if all the cars in our family car inventory were purchased at their cash Target Prices.
·With many models facing stiff competition from small cars and small SUVs, we’d expected to see higher levels of cash discounting. But with many dealers still struggling to raise profitability to sustainable levels and manufacturers not wishing to be seen as distress selling, we have instead noted an increase of more than 12.7% over the last quarter in the average finance Target Price saving – currently £1451 per car.
· This saving is represented as a finance deposit contribution that can be accessed when buying via a manufacturer-backed PCP deal at an average APR of 4.1%.
· This means a total saving of £3514 is typically available on a family car. Interest-free finance is available from five car makers, with Ford, MG, Peugeot, Toyota and Volvo offering such deals on their respective Focus, ZS, 308, Corolla and V40 models.
· The average cash discount in this segment is currently 6.6%, or £3123 per car. This is more than 20% higher, in relative terms, than the lowest corresponding figure recorded in the past 12 months.
· As one of the segments that was most resilient to discounting pressure, this change highlights what a tough year 2019 has been for dealers.
· Volvo, Mercedes-Benz and BMW are offering the highest cash savings, with an average discount of 9.7% (£5719 per car) on the XC90, 9.0% (£5437) on the GLE and 8.9% (£4855) on the X4 respectively.
To find the best deals on new cars, visit: www.whatcar.com/new-car-deals