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Why new car sales jump is a false dawn

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Please note that tax, investment, pension and ISA rules can change and the information and any views contained in this article may now be inaccurate.
UK new car registrations rose 10.4% to 167,911 year-on-year in the month of April, according to the latest figures (4 May) released by the Society of Motor Manufacturers and Traders (SMMT).
While this reversed the trend over the last 12 months of a declining market, the uptick is flattered by a number of one-off factors and it is too early to call a market recovery.
Sales were boosted by the timing of Easter, giving dealerships two additional selling days this April; and March’s adverse weather, which pushed some deliveries into April.
Most significant of all were the Vehicle Excise Duty (VED) changes that came into force last April, causing a pull forward into March 2017 as motorists looked to avoid VED tax rises before the end of March, which then depressed the market in April 2017.
As Alex Buttle, director at car buying comparison website Motorway.co.uk, explains: ‘After a year of falling new car registrations, this feels like a temporary respite for the car industry rather than a new dawn.
‘Unfortunately, there’s no tangible evidence to suggest there are better times ahead, and it would be foolhardy for hopes to be raised on one month’s figures.
‘The car industry is still facing a crisis, and although the downward trend has been reversed, we need to see several months of positive sales figures before talk of a recovery has any credibility.’
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