Don’t count on a new vehicle discount

Would you pay complete price tag for a new auto?

Most purchasers are ready to haggle to get a great deal in the auto showroom – and for years motorists have enjoyed generous discounts of up to 20% or more.

But the days of big discount could be numbered as dealers slash the savings on offer you to customers. The average discount at the end of February was 9.4%, compared with 10.3% just 6 months ago, according to figures from What Car?’s Target Price tag team.

The discounts can make a large difference to cash-strapped buyers.

Take the new Ford Concentrate. The recommended price tag is £13,995 for a basic model. If the dealer gives a discount of 8.3%, you could spend £12,554. But if the discount is only 9.4%, the automobile will cost £12,680, or £126 much more.

Size matters

You can secure the largest discounts if you are buying an executive, luxury or open-prime automobile. In truth, the savings obtainable on the leading-end cars have really gone up month on month by .7%.

It’s motorists who prefer (or who are restricted to) little cars who are not so fortunate. The discounts have dropped from 79% to 7.6% on compact models. But purchasers of chunky SUVs are similarly squeezed, with savings slumping from 7.9% to 7.1%.

Viva Volvo

If you want to know the UK’s most significant discounter, it’s the Swedish auto manufacturer Volvo, providing an typical of 14.7% off its models.

Renault is also generous, with average discounts of 13.6%. So also is BMW, with an average saving of 13.2%.

With discounts in decline, it is even far more crucial to shop about – including between marques – in search of the largest savings.

But why are savings shrinking?

Driving demand

It’s all down to provide and demand. Properly, primarily demand.

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The credit crunch put the dampeners on demand for new cars. A lot of men and women could hardly afford to spend their gas bill, never thoughts splash out on a new set of wheels.

But consumer confidence is steadily growing, supported by a stronger economy and healthier employment figures.

Today’s a lot more confident customer has fuelled a surge in demand for new vehicles, culminating in new vehicle sales hitting a 10-year higher of far more than 2.5 million in 2014.

Of course, if we are keen to buy automobiles, dealers don’t need to lure us into the showroom. Hence the disappearing discounts, particularly for well-known cars.

Difficult occasions

Jim Holder, editor of What Auto?, says: “We have always encouraged purchasers to haggle to get a good deal, but buyers should be aware that it’s going to become much harder to come away with a substantial discount in the coming months.

“There are nonetheless some sectors, such as executive and luxury automobiles, where a very good deal can be negotiated, but the signs from some of the most common segments of the market show that companies are starting to stand firmer on their prices.”

Don’t count on a new vehicle discount

Do not count on a new car discount

Would you spend full cost for a new auto?

Most purchasers are prepared to haggle to get a very good deal in the auto showroom – and for years motorists have enjoyed generous discounts of up to 20% or a lot more.

But the days of large discount could be numbered as dealers slash the savings on provide to consumers. The typical discount at the end of February was 9.4%, compared with 8.3% just 6 months ago, according to figures from What Vehicle?’s Target Price team.

The discounts can make a huge distinction to money-strapped customers.

Take the new Ford Concentrate. The advisable price tag tag is £13,995 for a simple model. If the dealer offers a discount of 10.3%, you could pay £12,554. But if the discount is only 9.4%, the automobile will cost £12,680, or £126 much more.

Size matters

You can secure the greatest discounts if you are getting an executive, luxury or open-prime car. In truth, the savings accessible on the prime-finish automobiles have truly gone up month on month by .7%.

It’s motorists who favor (or who are restricted to) little automobiles who are not so fortunate. The discounts have dropped from 8.9% to 7.6% on compact models. But buyers of chunky SUVs are similarly squeezed, with savings slumping from 7.9% to 7.1%.

Viva Volvo

If you want to know the UK’s largest discounter, it’s the Swedish car manufacturer Volvo, supplying an typical of 14.7% off its models.

Renault is also generous, with typical discounts of 13.6%. So as well is BMW, with an average saving of 13.2%.

With discounts in decline, it is even much more critical to shop around – including amongst marques – in search of the most significant savings.

But why are savings shrinking?

Driving demand

It’s all down to supply and demand. Properly, mainly demand.

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The credit crunch put the dampeners on demand for new vehicles. A lot of people could hardly afford to spend their gas bill, by no means thoughts splash out on a new set of wheels.

But consumer self-assurance is steadily growing, supported by a stronger economy and healthier employment figures.

Today’s a lot more confident consumer has fuelled a surge in demand for new automobiles, culminating in new car sales hitting a 10-year higher of more than 2.5 million in 2014.

Of course, if we are keen to buy automobiles, dealers don’t require to lure us into the showroom. Hence the disappearing discounts, particularly for well-liked cars.

Hard instances

Jim Holder, editor of What Automobile?, says: “We have constantly encouraged purchasers to haggle to get a great deal, but buyers need to be aware that it is going to turn out to be considerably tougher to come away with a substantial discount in the coming months.

“There are nevertheless some sectors, such as executive and luxury vehicles, where a good deal can be negotiated, but the signs from some of the most popular segments of the market place show that makers are starting to stand firmer on their prices.”

Do not count on a new car discount

Will MyLicence end ‘proof of no claims discount’ nightmare?

The Motor Insurance Bureau (MIB) and Driver Vehicle Licensing Agency (DVLA) have joined forces to deliver MyLicence, a scheme designed to aid the crackdown on car insurance fraud – a problem that adds an estimated £33 on to the price of every motor policy.

And while this will undoubtedly be music to the ears of honest motorists everywhere, what might make for an even sweeter sound is the plan to do away with the need for motorists to keep and send a hard copy of their proof of no claims discount (NCD).

This part of the scheme isn’t due to go live until next year though, so before we look into that, let’s see how MyLicence is currently working for insurers and honest motorists alike.

Why do we need MyLicence?

Recent DVLA statistics reveal almost a quarter of motorists (23%) fail to accurately disclose their driving record, including declaration of any driving disqualifications.

And while 16% of policyholders under-declare convictions, 7% somehow manage to over-declare, both of which would invalidate their car insurance.

So the MyLicence scheme has been introduced to enable insurers to offer policies based on facts rather than relying solely on driver declaration.

Cross referencing

It does this by using each motorists driver licence number (DLN) to cross-reference the details held by insurers with that held by the DVLA to confirm driving entitlements, endorsements and penalty points.

This means insurers will be better equipped to assess quotes, determine risk levels and provide insurance at an appropriate and accurate price without having to rely so heavily on assumptions and declarations.

The scheme has been a work in progress since 2010 and is just another step in the ongoing process to digitise the data held by the DVLA and other motoring organisations, a process which should benefit motorists and insurers alike.

Honesty the best policy

Huw Evans, Director of Policy and Deputy Director General, Association of British Insurers (ABI), said: “MyLicence is good news for honest motorists. It will speed up the application process, help insurers, brokers and comparison websites to better identify potential frauds, and keep motor insurance premiums as competitively priced as possible.”

And if this can help cut the rising cost of car insurance then it should be welcomed by honest motorists the land over.

As should the plans to do away with having to get a hard copy of proof of NCD – but in reality this could just open up a whole can of worms…

‘Proof of NCD’ strife

It’s well over a year since we published Get proof of your no claims discount and we still get loads of comments from motorists who are struggling to obtain proof of NCD from their previous insurers.

In some instances motorists are even having their current policy cancelled because they can’t provide proof of NCD to their current insurers.

And so the plans to do away with the need for hard copies of proof of NCD will solve this particular headache. But it could also blow the doors wide open on the inconsistent allocation of NCD among insurers.

Entitlement issues

How come? Well, if your new insurer only recognises a maximum of 5 years’ NCD, then you’ll only be able to have 5 years’ NCD on your next policy.

So even if you had say, 9 years’ NCD under the old policy, if your current insurer only recognises 5 years, you’ll instantly lose 4 years’ entitlement.

And it gets worse if you make a claim and, as is usually the case, lose 2 years’ NCD. You’d then see your entitlement fall from 9 years to just 3, which would come as a nasty surprise if you were expecting to go into your next renewal armed with 6 years’ NCD.

Industry standard

We asked the MIB and the ABI whether an industry standard would be introduced for NCD allocation. They said there are no plans to do so as claims history forms an important part of the overall pricing structure, and no claims discounts are regularly used to attract and retain customers for annual policies.

Will MyLicence end ‘proof of no claims discount’ nightmare?