Fleet News

New car prices 'have fallen as far as they are likely to'

NEW car prices in Britain have fallen as far as they are likely to according to motor industry experts. Only short term special marketing programmes are likely to deliver any further reductions with media speculation of further price cuts of 30 - 40% dismissed as 'nonsense.'

Paul Everitt, head of policy at the Society of Motor Manufacturers and Traders, said: 'The price cuts which are going to happen have happened. It seems very unlikely that we will see substantial falls. It is only by reducing the cost of production or distribution that the industry can deliver lower prices and that cannot be done quickly. It would be commercial suicide to reduce prices by around 30 - 40%. If that were to have happened, a manufacturer would have moved by now and capitalised on the PR. It will not happen.'

And Bill Carter, editor of Glass's Guide AutoProvision, said: 'Headline prices have changed but transaction prices have not. All we are seeing is offers such as free servicing and insurance disappearing and Vauxhall has already started unbundling free services.'

The monthly Alliance & Leicester Car Price Index shows in the 12 months to April 2000, new car prices fell an average 5.9%.The fall was led by city cars (down 10.8% year-on-year) followed by compact executive (down 10%) and, for the first time since the Index's inception, every vehicle category was cheaper than a year ago.

CAP Motor Research's Index shows this month new car prices were down an average 1.2% compared with June last year. However, the Index also claims prices of superminis, MPVs and 4x4s increased year-on-year by 0.5%, 0.1% and 0.3% respectively.

Among manufacturers which are presently advertising special promotions are SEAT (up to £1,480 off selected cars), Honda (£1,200 off an Accord 1.8 VTEC SE), Mitsubishi (£1,000 cashback on a Shogun Pinin), Suzuki (up to £1,631 off selected vehicles), Peugeot (special offers on special edition 106 and 206 models), Rover (£900-£2,600 off 25, 45, 75, MG and Minis), Citroen (special offers on various models) and Volkswagen.

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