New car sales surge

New car sales grew at their fastest rate for two years last month. Although the economy fell back into recession, buyers flocked to dealers, taking new registrations up 9.3 per cent to 143,884, new Society of Motor Manufacturers and Traders (SMMT) figures show.

It’s 2012’s fifth consecutive monthly increase – and is being fuelled by retail rather than fleet buyers. Private sales are up by 26.4 per cent on 2011 – and the results are so good, the SMMT has revised its forecast for 2012 sales up by 30,000 to 1.97m.

John Leech, from financial services company KPMG, said car sales had fallen significantly in previous recessions, and put this down to a number of factors.

“Firstly, dealers report that consumers are playing catch-up as they become less concerned about job insecurity,” said Leech. “Secondly, this year has seen a big push by car manufacturers with a higher than normal release of new models. They’re offering large discounts, too.”

Zero per cent finance deals have also played a big role. The Finance and Leasing Association reports that in the second quarter of the year, 73.4 per cent of new cars were paid for using dealer finance – a rise of 27 per cent.

As our table shows, the Ford Fiesta held on to its crown as Britain’s most popular car in July.