Sales of new cars soar

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Sales of new cars soared by almost 60 per cent in November but the increase could be a temporary boost driven by people rushing to beat next month’s VAT increase, the Society of Motor Manufacturers and Traders warned today.

New car registrations were up 57.6 per cent in November compared to the same month of last year, though sales had collapsed at that stage of last year and the latest figures are only back at the levels seen in November 2007.

Sales of cars in the UK have been boosted by the scrappage scheme, which provides £2,000 worth of discounts to drivers who trade in older vehicles in order to buy a new model. The scheme was extended in September, with £100m of new funding that is expected to last until the new year, and has helped sales of small cars in particular. November’s best-selling car in the UK was the Ford Fiesta, the ninth time this year the vehicle has taken the top ranking.

The car industry has also been boosted by the Government’s decision a year ago to offer a temporary reduction in Britain’s VAT rate, from 17.5 per cent to 15 per cent. This reduction has had a particularly positive effect on sales of big ticket items, such as cars, where the savings are more visible, though the lower rate comes to an end at the beginning of 2010.

Paul Everitt, the SMMT’s chief executive, said: “The increase in new car registrations in November reflects the positive impact of the scrappage incentive scheme, customers avoiding the VAT increase in January, and the very difficult conditions we experienced a year ago.”

Mr Everitt warned the outlook for 2010 remained unclear, with car sales at the mercy of the wider economy once scrappage and low-rate VAT are no longer available. Sales of company cars also seem to be picking up more slowly than private purchases, the SMMT warned.

These were the best-selling models in November 2009:

1. Ford Fiesta

2. Ford Focus

3. Vauxhall Corsa

4. Vauxhall Astra

5. BMW 3 Series

6. Peugeot 207

7. Renault Clio

8. Volkswagen Golf

9. Nissan Qashqai

10. Mini.