Buyers could benefit from larger discounts when car dealerships re-open

Dealerships could attempt to lure buyers back into car showrooms in June with larger discounts, new What Car? Target Price analysis has revealed.

With car retailers expected to open at the beginning of June following more than nine weeks of lockdown, a large number of potential buyers are likely to resume shopping for a new car. What Car? research suggests that 20% of in-market buyers are looking to put their money down as soon as the current period of lockdown restrictions is over, and it's this anticipated upturn in new car sales that could lead to an increase in discounts, as dealers look to close sales fast. Supporting this, the average Target Price discount on a new car is currently £3078 – an increase of 1.4% on the previous month. 

It's clear that potential buyers are keen to do a deal, too; traffic across Whatcar.com jumped by 9% last week when the government confirmed that no-contact 'click and collect' sales could go ahead. Our survey of more than 4000 consumers also revealed that the majority (68%) still want to complete their purchase in person at a dealership, while 14% said they'd prefer to discuss their next car by email, and 11% wanted to complete their purchase through a website.

While the lockdown period could result in a better overall deal for consumers, the Society of Motor Manufacturers and Traders (SMMT) has also warned that keeping car dealerships closed could be harming the economy.

The SMMT estimates the current shutdown is costing the government £61 million per day both in lost revenue generated from VAT and vehicle taxes, and the cost of keeping dealership staff on furlough. Collectively, taxes and VAT from car sales usually generates around £5.4 billion for the Treasury every year – revenue that has been decimated over the past months. In fact, new car sales for April were down by more than 97% compared with the previous year, with just 4321 new vehicles being sold in the UK last month.

The SMMT is calling on the government to open the UK's 4900-strong dealer network, saying that car showrooms are among those businesses which could put in place social distancing measures to combat the spread of coronavirus effectively. This is helped by the fact that most dealerships contain large open spaces where social distancing is possible, and that by giving customers access to new cars, those showrooms are both boosting the economy and helping people to get to work safely without relying on public transport. Additional benefits, the trade body says, include helping to get older, more polluting cars of the road, and accelerating the switch to new hybrid, plug-in hybrid and electric cars.

SMMT chief executive Mike Hawes has said the sector is "ready to return to work", and cites that "with every day of closure [representing] another day of lost income for the industry and Treasury, we see no reason to delay."

Of course, some buyers may be wary about visiting public spaces including car showrooms, even after lockdown restrictions are lifted. What Car?'s New Car Buying service allows you to research, choose and buy your car online, and all from the comfort of your own home.

For all the latest reviews, advice and new car deals, sign up to the What Car? newsletter here

The biggest discounts on our most popular cars

So what kind of savings could buyers expect to receive once dealerships re-open? Below, we've listed the biggest savings currently available on the 12 cars that buyers are currently enquiring about most frequently with dealers on our What Car? New Car Buying platform. For each car, click on the savings to find out more.

1. Volvo XC40 – Save up to £4404 

Verdict: Blends generous passenger and boot space with a quality interior and top-notch safety rating. Read the review

2. Volkswagen Polo – Save up to £1866

Verdict: Offers good interior quality, great infotainment and a comfortable ride. Discounts boost value equation, too. Read the review

Next: more discounts on our most in-demand cars >>