Target Price Market Report – December 2020
There is a palpable sense across many sections of the motor trade that an unintended consequence of the Covid-19 pandemic has been an unprecedented opportunity for dealers to wrest back control of the negotiating process and recoup some much needed profitability.
The desire to do so among the retail motor trade has been there for some time, as profits had been maintaining dangerously low levels for too long.
And so it transpired that as cars became harder to source (both new and used) and car manufacturers reduced or removed dealer sales targets consumer demand increased.
This perfect scenario, for dealers smart enough to see it, and well equipped enough to take advantage of it, has resulted in an average 19.8% relative terms drop in the typically achievable cash Target Price discount over the course of the pandemic.
Consumers can currently expect to negotiate an average cash Target Price saving of 7.3% or £2855 per car across our Target Price inventory.
Only one of our Target Price segments (luxury cars) has a cash Target Price discount higher that at the start of the pandemic (up 8.5% in relative terms) while segments including city cars, coupes, family cars, MPVs and large SUVs are reporting an average drop over the same period of more than 27% in relative terms
Car makers are continuing to support dealers’ sales efforts with finance Target Price incentives. The average PCP APR is currently 4.2% with a corresponding average £1605 per car available as a finance deposit contribution.
Skoda dealers are currently the most generous when offering an average cash Target Price discount across a model range at 13%, followed by Seat and Smart at 11.9% and 10.5% respectively.
Skoda 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 6.8% to 13%.
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