Bargain-hunters could enjoy a new-car ‘feast’, even in a ‘hungry’ month

Published on 10 March, 2021

Overview

IT could turn out to be a ‘hungry March’ for many dealers and franchises – but possibly a ‘feast’ of a month for bargain-hunters chasing down a new car this year.

One of the reasons is that registrations rose last month due, in part, to the fact there was a dash towards the end of the month to beat the increase in prices when VAT returned to 23pc after being at 21pc since September under the Government’s stimulus plan.

There were still a lot of pre-ordered cars to work their way through the system during February. All of which went to swell the numbers that were registered.

All of that front-loading is expected to leave something of a void in the order books for this month.

I am sorry for sounding fairly gloomy, but that is what I am hearing from several sources within the industry.

Some are warning that the survival of some companies in the medium term could be on the line – with the corresponding fallout for jobs in main and downstream industries.

So dealers have to keep trying to sell cars as best they can under these severely restricted circumstances.

As you probably know by now, cars are being bought, traded and sold for some time now under the ‘click and deliver’ system which is permitted under the current lockdown.

Right now it is a matter of generating sales for this ‘hungry’ month. Which is where the ‘feast’ for bargain-hunters may manifest itself.

One of the major concessions to win your money is the announcement by some distributors that they are absorbing the difference between the previous 21pc VAT rate and the new 23pc level.

The VAT-back deal amounts to €1,500 on some models, but most likely it will come to between €500 and €600 for the average new car.

Whatever way you look at it, there’s a lot of money to be saved. But is it a good enough reason to make you decide to buy this month rather than wait for the second registration period in July?

There is no clear-cut answer. You have to weigh up the pros and cons. Buying this month gives you use (limited for now admittedly) of a 2021-reg motor for a longer period than a July purchase. But there may be more updated models arriving by July.

Buying now – while there is a large element of gloom – might mean you get a better deal not just on VAT but on trim, and perhaps an extra or two at a cut price. You will benefit from cut-throat competition and deals.

Waiting until July makes sense to see how things settle down; there will be keen competition for your money then too.

But if we are out of the heavy lockdown and public sentiment improves, greater demand may lessen the degree of deals.

As well as that, newer edition models will likely cost more as new-car prices tend to rise regardless. It is a tough call.

My advice is to get a few quotes for both periods (you can pre-order for July, I’m sure) and weigh them up.

And remember, dealers have to make a few euro to cover costs so don’t try to drive too hard a bargain.

Meanwhile, CarsIreland.ie has announced that it is teaming up with Ulster Bank’s Lombard for the 2021 CarsIreland.ie dealer awards.

The awards, now in their seventh year, recognise the online marketing efforts of dealerships across the country.