Tax changes prompt sharp drop in UK car sales

UK new car sales fell by 20 per cent in April, a sharp decline caused in part by significant changes to the vehicle tax system that came into force at the end of March.

Registrations 19.8 per cent fell to 152,076 in the month, though the total number of cars sold in the first four months of the year was still up 1.1 per cent at 972,092, according to figures from UK motor industry group the SMMT, showing that the market is still growing modestly.

Many of the consumers who would have ordinarily bought a car in April made their purchases in March before tax changes came into force, the body said.

In March, sales rose by 8.4 per cent to 562,337 – the biggest month for UK car sales since records began.

Mike Hawes, SMMT chief executive, said:

With the rush to register new cars and avoid VED [vehicle excise duty] tax rises before the end of March, as well as fewer selling days due to the later Easter, April was always going to be much slower. It’s important to note that the market remains at record levels.

We therefore expect demand to stabilise over the year as the turbulence created by these tax changes decreases.