Fleet car registrations drop 13% as VED changes introduced

4 May 2017

Fleet and business registrations of new cars have fallen 12.86%, in the month that new higher VED rates were introduced.

Registrations of corporate cars fell from 105,771 last April, to 92,164 in 2017, according to the latest figures from the SMMT.

In total, 152,076 new cars were registered in April, a -19.8% decline - while private registrations fell 28.4%

April's figures come after what was a record performance in March when buyers seized the chance to source cars before the VED rates came into force.

Overall, 562,337 new cars were registered in March, more than double the number in the first two months of the year combined. Fleet and business accounted for 288,586 units – 51% of the market – which was a 12.5% increase on the 250,000-plus cars reported in March 2016.

Mike Hawes, SMMT chief executive, said: "With the rush to register new cars and avoid VED tax rises before the end of March, as well as fewer selling days due to the later Easter, April was always going to be much slower. It’s important to note that the market remains at record levels as customers still see many benefits in purchasing a new car. We therefore expect demand to stabilise over the year as the turbulence created by these tax changes decreases."

Chris Bosworth, director of strategy at Close Brothers Motor Finance, added: “The record-breaking golden period for new car registrations always had to come to an end at some point, and given the highly volatile economic climate, it’s not surprising today’s figures show a decrease in demand for new cars. We expect the turbulent political landscape, rising inflation and its’ impact on consumer spending will also hinder new car growth in the months ahead."

Manufacturers hardest hit by the downturn included DS (down 54%), Fiat (49%), Vauxhall (33%), Ford (30%), Jeep (72%), Land Rover (37%) and Volkswagen (41%) year-on-year.

Those defying the trend included Mercedes-Benz (up 11%), Seat (12%), and BMW (3%).

Lauren Pamma, head of fleet consultancy at Lex Autolease, said: “A slight slowdown in fleet registrations in April was no surprise. However, it’s encouraging that fleet and business registrations still account for more than half the total.

"Aside from the usual seasonal peak, the strong figures in March were partly due to businesses pulling forward vehicle procurement ahead of changes to Vehicle Excise Duty which came into force on 1st April.

“With fuel choice a hot topic beyond just the motor industry, it’s more important than ever that businesses choose the right vehicle for their needs, weighing up the commercial and environmental concerns across the lifetime of the contract.”