The significant fall in new car sales in February has suggested a more difficult selling environment for dealers and greater pressure to offer more attractive finance packages and price discounts on new cars. John Cradden reports.
Car registration figures for February were down by 18.8 per cent on the same month last year, and 5.5 per cent for the year so far. The fall took many by surprise after January sales recorded an increase of 6.6 per cent, albeit on the basis of a significant number of pre-booked sales.
However, others say that sales for February last year were higher than average because of those wishing to beat the 1 per cent VAT rise implemented in March 2002.
Whatever the story, most dealers who spoke to The Irish Times agreed that the selling environment is at least slight negative, particularly with war in Iraq. One dealer said that customers are now much more "switched on" to what represented a good deal.
However, this has not translated into a great many attractive finance deals or significant cash discounts from dealers, and the most attractive ones are usually those sanctioned by manufacturers or distributors. Furthermore, most of these were due to run out by the end of March, so if you're reading this and you're in the market for a new car, you've probably missed out on a couple of good deals.
For example, Fiat dealers were offering 0 per cent finance on Puntos and Stilos. Citroën has slashed forecourt prices of nearly all new cars in its range by up to €2,500. The C3 has been cut by €1,500, the Xsara by €1,750, the Picasso by €2,250 and the C5 by €2,500.
However, Opel has been running a 2.9 per cent finance deal on all Corsa and Astra models since the beginning of March. The finance will be funded over three years, but will not extend to the Astra Coupe and Cabrio.
A number of manufacturers, including Volvo, Ford, Toyota, and Citroën have opted to absorb the 5 per cent VRT increase for cars in the 1,901-2,000 cc engine bracket. This move, which has resulted in a saving in price on some two litre engined cars of up to €3,000, is a significant one.
It's tempting to see this as a cynical ploy to shift more cars but, given the financial cost to distributors of absorbing this increase, the intrinsic worth of such a move as part of a continuing campaign against the VRT tax can't be discounted. Volvo Ireland, for instance, has complained that this latest VRT increase was "not well thought through, as it had no environmental benefit and will simply result in distorting the marketplace".
Other deals currently on offer include a five-year roadside assistance package (for the price of two years) for all Seat cars, and a free €200 summer holiday voucher for those who call in to test drive any new Nissan.
After all of the above, the trail of attractive deals runs very cold. Few individual dealers have been tempted to offer much above the standard manufacturer package.
Stephen Byrne of Annesley Motors says that demand for popular models such as the VW Golf consistently outstrips supply, although from time to time there may come some special offers for the VW Polo. Foster Motor Company in Dublin is offering a VW Polo with for €59.99 a week over a five-year period. The car's €15,020 retail price has been discounted by €945, but a €999 deposit is required (although trade-ins are accepted).
Up until the end of last month, Esmonde Motors was offering an 8.25 per cent APR for up to five years (the usual rate is about 9.9 per cent) on any new Ford with free road tax, two years free RAC cover, two years unlimited mileage warranty and free tank of fuel and floor mats.
Sales director Michael Purcell says that the reason for the special offer is that the dealership has sales targets to meet for the first three months. He also said that the selling environment has been "difficult", but points out that Ford sales continue to hold steady at the head of the Irish new car sales chart at 12 to 13 per cent of the market.
Deals such as those from Esmonde are worth scanning the ads for. The advice for those in the market for a new car is perhaps to wait until the end of financial quarters - March, June, and September - when some dealers may have stock they need to shift in order to meet quarterly sales targets. In addition, the second half of the year is when car sales slow considerably, so look out for more dealer-specific offers then.
If you're prepared to forgo the delights of the new car interior smell, the nearly new car market is doing particularly well, dealers say. Similar finance deals are available on these cars as new ones.
Purcell says that Esmonde is always on the lookout for used cars, the newer the better. Barry Teeling of Teeling Motor Company (Citroën) also reports a resurgence in the used car market, with demand especially strong for cars no older than a 00 reg. This is particularly the case as many buyers of new cars will trade up after two years. He said many dealers are prepared to pay "over the odds" for nearly new cars, such is the strength of demand.