UK’s new car market shows biggest increase on record in March

A total of 562,337 new cars were registered last month, which is more than double the number that were registered in the first two months of the year combined

March saw a 31 per cent surge in registrations of alternatively fuelled vehicles (Getty)

The UK’s new car market grew by 8.4 per cent in March, which marks its biggest monthly increase since records began, according to figures published by the Society of Motor Manufacturers and Traders.

The SMMT said on Wednesday that 562,337 new cars were registered last month, which is more than double the number that were registered in the first two months of the year combined.

A total of 820,016 new cars were driven off forecourts in the first quarter of 2017, up 6.2 per cent on the same period in last year and a new record for the quarter.

The SMMT said that the jump was largely fuelled by buyers snapping up new cars before the new vehicle excise duty rates came into effect on 1 April.

Under the new tax system all new cars, except for those with zero emissions, are subject to an annual flat rate charge.

“This bumper performance probably means we will see a slowdown in April, exacerbated by the fact there are fewer selling days this year given Easter timing,” said Mike Hawes, chief executive of the SMMT.

“Looking ahead to the rest of the year, we still expect the market to cool only slightly given broader political uncertainties as there are still attractive deals on offer,” he added.

The figures also underscored the current trend of drivers buying low-emission vehicles.

March saw a 31 per cent surge in registrations of alternatively fuelled vehicles, according to the SMMT. But petrol cars experienced an uptick too, growing 13.2 per cent.

Demand for diesels also increased compared with 2016 levels. Almost a quarter of a million buyers chose diesel cars, which the SMMT said was the most ever in a single month.

Paul Kaye, sales and marketing director at Close Brothers Motor Finance, a company that provides financing solutions for cars, motorbikes and vans, said that it was now important for sellers to be aware of consumer behaviour. He said that this is already perceived to be one of the biggest threats to business in the coming month.