Consumer discounts negotiated on new car purchases are shrinking, according to recent research from What Car?.
The study found that the average discount has dropped by £204 over the past 12 months across all models. This means that typical markdowns are now averaging out at 8.9 per cent compared to the 10.14 per cent recorded last year.
Markdowns are predictable costs that can be adjusted in accordance with a car dealership's requirements and fluctuations in trade. But other business costs aren't always that easy to control, such as damage and theft.
To ensure that a business can get through any unexpected expenses, it's vital to have a suitable motor trade insurance policy to provide valuable cover for a business that is selling or repairing cars by protecting assets.
Jim Holder, What Car? Editor, commented on the findings regarding the drop in discounts: “Dealers need to turn a profit and, while demand remains high because of strong consumer confidence, they feel able to stand firm.
“A reduction in average discounts from £2,564 to £2,360 might not sound a lot, but it’s been a steady trend for a number of months now and consumers will have to get used to it.”
He added that What Car? advises consumers to shop around and negotiate a good deal, but to bear in mind that this might not be purely reliant on cash reductions and could include other extra services in the purchase process as well.