Statistics show that the car buyers' confidence is sinking rapidly since the car sale figures have decreased in the month of September 2008. New car registrations in the UK have gone down by 21.2% and 330,295 new vehicles were registered during this month.
But what are the reasons behind this drastic drop in the car sale figures?
Credit Crunch
Experts suggest that one of the main reasons for the car sales drop is the general credit crunch that is being felt across the economy. As customers need to re-gain confidence in the market before making new purchases. In fact the car leasing market has been affected as potential buyers are more cautious with their spending. It is no surprise then that the luxury car segment has suffered the most with manufacturers like Aston Martin showing sales lowered by 67%. The economy cars segment, which is considered more of a necessity, is still keeping steady. Car leasing offers the solution to most of the worries that people have when changing their car and these "in built solutions" are why despite the down turn in new car sales car leasing is still on the increase.
New Taxes
The planned taxes increase that come into play at the end of the year are another potential reason why car sales have dropped in the month of September 2008. The automobile industry has urged the UK government to step in with solutions to overcome this problem by reforming these taxes. Those pleading on behalf of the automobile industry request the government to rethink their ‘new vehicle exercise duty system' in light of the lowest ever sales recorded in the so called ‘bumper' month of September. The system does appear to be flawed and appears only to be confusing drivers and local councils as they try and create legislation around congestion, parking and other town centre matters.
Increased Fuel Prices
The fuel prices increase has also affected new car sales. It is predicted that the demand for alternative fuel and greener car options will increase. Since the new tax system is based on CO2 emission, buyers are looking for fuel efficient cars.
September registered the lowest ever car sales since 1999. The auto industry expects that the government reforms will reduce these problems and correct the situation as soon as possible. In the meantime it seems that car leasing is the better alternative to an outright car purchase.