Target Price Market Report

Discounts have stabilised this month at an average of 6.3% per car

There are signs that the market pressures that have been forcing average Target Price discounts lower are beginning to weaken.

Across our 14 vehicle segments, the average cash Target Price saving is unchanged across six segments, reduced across six segments and increased across two.

This means that the overall figure is only marginally down compared to last month, at 6.3% or £2543 per car.

This average Target Price cash saving per car drops to £1988 when a manufacturer’s finance scheme is used to buy a car, but this also triggers an added £1629 per car saving in finance deposit contributions that are linked to an average 4.3% PCP APR.

As the market adjusts to the real-world effects of post-pandemic car production issues, salespeople are having to deal with customers seriously considering a used car purchase instead of new, and with competitors upping their discounts a bit to overcome specification amendments caused by the semiconductor chip shortage.

This all starts to create an upward pressure on cash Target Price discounts which, combined with projected increases in car production output, should enable customers to start to tilt the negotiating power back to their favour again.

When and how this will happen will also be heavily influenced by any changes manufacturers make when reviewing their customer offers and finance campaigns ahead of the upcoming quarter three sales period. A clear intent to try to boost sales with a raft of improved offers, will undoubtedly trigger increased competition and boost Target Price discounts.

Jeep dealers are currently the most generous when offering an average cash Target Price discount across a model range at 13.9%, followed by Renault at 12.6% and Seat at 12%.

Citroen has recorded the highest month-on-month decrease in the average cash Target Price saving, with the typically achievable showroom discount across the model range down by 1.7% to 10.2%.