Growth in zero per cent finance offers may have helped April rebound

While April’s 10.4% increase in new car registrations can be partly explained by comparing it with a bad month in 2017, it’s possible the strength of offers on the table in Q2 also played a part.

There has been a quarter-on-quarter increase in 0% finance offers, from 63 in Q1 up to 69 in Q2 across 15 different franchises. It will be interesting to see if this level of 0% support continues into the second half of the year as Q4 2017 showed a much lower level – 45 offers.

There are four cars with monthly payments below £100 in the most affordable category this quarter, including the expected value cars such as the Dacia Sandero and Suzuki Celerio. However volume players Ford are also in there, with the Ka+ Zetec.

Volkswagen, Citroën and Hyundai also make it into the most affordable category, making the price of entry into those brands very accessible.

The number of no-deposit deals has reduced in Q2, down to just four with Smart continuing its offer from Q1, but there are seven offers in total with a deposit below £500. Renault’s Clio Dynamique Nav 1.2 16V 75 for a £189 deposit and £189 a month is a simple and strong offer, as is the deal on the Captur Dynamique Nav TCe 90 for a £219 deposit and £219 a month.

When looking at overall affordability, more than  half (56.4%) the offers AM has recorded for Q2 are priced below the £300 per month price point (180 deals out of the 319 total).

At the other end of the affordability spectrum, there are some brands that stand out for having a much higher rate of finance than the rest. Citroën’s C4 and SpaceTourer are both available with an offer on 9.9% APR, a three percentage-point hike over the rest of the higher rate APRs, which are all 6.9%. It’s not a percentage rate that’s echoed throughout the rest of Citroën’s range, which has 0%, 2.9% and 4.9%  offers on important volume models such as the C1, C3 and C4 Cactus.

As always, the most expensive end of the table for monthly offers is a display of prestige supercars and SUVs, but scanning further down shows a Kia Optima PHEV at £474 a month, sitting between a BMW X3 M Sport and Mercedes-Benz GLC Coupe AMG Line. It’s a premium playing field Kia is getting more and more confident in, particularly with new products such as the Stinger and a high-specification Sorento.

Despite the strength of offers available in Q2, there were still five manufacturers that recorded registrations decreases of 10% or more in April, despite market conditions that should have aided increases due to such a poor month by comparison last year.

This includes Smart, SsangYong, Infiniti, BMW and Mercedes. Of that group, the German premium volume players have been hit the hardest, as Audi had a flat month too, so it will be interesting to see where all three end up by the end of June. Out of all three, BMW has the most offers at a lower rate of finance, so that may help the efforts of the dealer network over the next 30 days.

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