The new car reality check

Where February sales data distorted the picture, March delivers the verdict, says Stuart Masson of The Car Expert

With the release of February’s new car registration figures there will inevitably be headlines about whether electric car demand is rising or falling. But February is one of the least meaningful months of the year for judging the health of the UK car market.

We’re expecting somewhere in the region of 80,000 to 85,000 registrations. By comparison, January delivered around 140,000 and March will be about 350,000 – making it the single biggest month of the year. In a month as small as February, relatively modest swings from a handful of manufacturers can noticeably distort the overall picture.

In practice, February is largely a transition month. Dealers are clearing remaining stock ahead of the March number plate change while preparing for what is traditionally a surge in demand. March and September alone account for nearly a third of annual registrations, so they tell us far more about underlying consumer confidence and market direction.

One crucial indicator isn’t even reflected in the headline registration data published by the Society of Motor Manufacturers and Traders. Data from the Finance & Leasing Association consistently shows that January and February are the weakest months of the year for new car finance borrowing – a pattern stretching back well over a decade.

After Christmas, households tend to rein in spending and borrow less, which naturally affects sales of higher-value vehicles, including many electric cars. That seasonal effect can make short-term EV performance look stronger or weaker than it really is. The more reliable measure of where the market is heading will come with the March figures.”

Stuart Masson is editorial director of The Car Expert

Established in 2011, The Car Expert is an automotive consumer advice platform, reaching over two million readers annually. It offers guidance on all aspects of purchasing, financing, owning, and selling both new and used cars.