Consumer confidence needs a boost car dealers tell government

‘Government must reduce interest rates to boost consumer confidence; this is a great time to buy a car, but the prevailing mood of economic gloom is causing consumers to delay big ticket purchases, said Sue Robinson, Director of the RMI National Franchised Dealers Association (NFDA), which represents the UK’s new car dealers, commenting on car sales figures for July 2008.

Robinson believes that fear of recession is causing consumers to be more frugal than is necessary: ‘Some of those who would have had no problem buying a new car are holding off because they feel they should be prudent.’

Changes to the way that Vehicle Excise Duty (VED) is calculated, along with recent fuel costs and economic and environmental concerns, have also had an impact. Robinson explains: ‘VED changes due to come into force next year could reduce the value of some second hand cars. At the same time interest rates remain high, possibly increasing the cost of buying a new car. Many potential buyers waiting to see what happens.

Robinson adds: ‘A reduction in interest rates, stabilization of fuel costs, and clarification over the future cost of motoring could help to boost confidence, and the Government must act now.’