New car sales in Sepetember down just 0.8 per cent thanks to fleet sales

Car Sales September 2011 - down by 7.3% to private buyers

According to the doom-mongers, we’re in the midst of the worst financial crisis since 2008 and the post-Northern Rock mess. Or since the Great Depression. Or ever. So the news that car sales in the UK fell just 0.8% in September is good news. Isn’t it?

In some ways, it is. After all, August saw a pretty hefty rise of 7.3 per cent and the UK is still on target for sales in 2011 of almost 2 million cars. But the underlying figures on private sales for September is worrying.

Masked by big sales to fleet buyers, September sales look not too bad. But the fact is that sales to private buyers fell by a very chunky 9.3 per cent.

No one should be surprised that new car sales to private buyers fell so dramatically, and the UK is far from alone in this. The squeeze on wages and the spiralling of food and energy prices - never mind the mad price of fuel and insurance for cars – is enough to put many buyers off the idea of chopping in their cars for a new one, when they’re not even sure they can find the money to heat their homes and feed themselves.

But you’d think, with historically low interest rates, now would be a great time to buy a car however cash-strapped buyers fell. Cars have become a necessity, not necessarily a luxury, but the lack of financing for car buyers has become a real problem. And until that’s fixed, even a recovering economy won’t help much.

So perhaps we could get our economy moving again by fixing the complete drought of financing for private car buyers (and while we’re at it we should get the housing market moving again with available mortgages) and use the QE £75 billion to do it, rather than it ending up shoring-up banks’ liquidity?

Let’s face it, the economy will only recover through growth – and by restoring confidence – and what better way to do that than make car finance and mortgages genuinely available again? And houses and cars are both feel-good possessions.

Or is that too simplistic?

By Cars UK