New car discounts are shrinking as consumer demand remains strong

Whilst manufacturers are ramping up their production of new cars again, consumer demand is still outweighing supply by some distance. We know this imbalance in the market is causing used car prices to continue to rise, and that same trend is now impacting new cars too, with franchise retailers steadily reducing the level of discounts offered on new cars over the last 12 months in line with the market.

In fact, we saw the average discount offered by volume brands drop from 10.71% in March 2021 to 6.5% in February 2022. Similarly, for premium brands, we saw average discounting drop from 8.48% to 4.7%. respectively. This drop-off in discounting indicates the confidence retailers have in consumer demand but also highlights the importance of maintaining higher profit margins with less stock available.

Check out our tip of the week on new car discounting

Top tip 

Review the discounts you’re offering on new vehicles and ensure they aren’t out of sync with market averages. If you’re uncertain whether the discounts you’re offering are too high or too low, get in touch. We’ve got the data and insight to help you price to the live retail market to ensure you’re never leaving profit margin on the table. 

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