Target Price Market Report – June 2021
The average cash Target Price discount has fallen to its lowest ever
The average cash Target Price discount has fallen to its lowest ever level, at 6.4% or £2531 per car. A perfect trading environment has emerged for dealers with high consumer demand and a restricted, and falling, supply of new cars, plus manufacturer sales targets being either removed or reduced.
It has been more than 13 years (prior to the financial crash in 2008) since dealers have been able to exert so much control in defending their trading margins, but even then, the typically achievable transaction price saving was not forced as low as it is currently.
Our research has found pockets of exception to this trading environment, where individual dealers will still just take consumers out of the market with higher discounts, regardless of sacrificing a valuable stock vehicle or the wait for a factory order, but from an average cash Target Price perspective, the trend for discounts remains negative.
Manufacturer finance-based support is broadly unchanged at an average £1578 per car (linked to an average 4.3% PCP APR, that has increased from 4.1% last month) but this reduces the average cash Target Price by 21.3% to £1992 per car which gives a combined (cash and finance) Target Price saving per car of £3570.
With no obvious end to the production issues facing car manufacturers, lower Target Price discounts will remain for some time. While this is an unnatural market scenario that will resolve itself sooner or later, consumers should remember to shop around more than ever at this time to find the best deal possible.
Jeep dealers are currently the most generous when offering an average cash Target Price discount across a model range at 14%, followed by Renault at 13.4% and Seat at 12%.
Audi 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 2% to 5.4%.