UK New Car Sales at 10-Year High on Pent-Up Demand and Better Finance Deals

New car sales in the UK rose at the fastest pace for a decade in March, as pent-up demand and availability of new products with attractive finance deals contributed significantly to the sector's performance.

The Society of Motor Manufacturers and Traders (SMMT) said new car registrations increased 17.7% on year in March to 464,824. The reading is also the second-highest on record since the introduction of twice-yearly car registrations in 1999.

March is typically the busiest month in the year for car sales as new registration plates are issued every six months, in March and September. The average registration volume for the month was around 449,000 units during the 2004-2008 period, but that figure declined to 369,000 between 2009 and 2013, due to the recession.

For the year-to-date period, car registrations rose 13.7% to 688,122 units.

"New car registrations surged 17.7% in March to 464,824 units, a surprisingly strong level of growth and a reflection of intensifying consumer confidence and the availability of great new products," Mike Hawes, SMMT chief executive, said in a statement.

"Given the past six years of subdued economic performance across the UK, there is still a substantial margin of pent-up demand that is contributing to a strong new and used car market."

"There has never been a better time to buy a new car thanks to attractive finance deals and advanced technologies that often make new cars cheaper to run. We expect the market to continue to perform positively for the rest of the year, albeit at a more modest rate," he added.

Sales of alternatively-fuelled vehicles rose at the biggest ever rate in March, soaring 63.8% on year to 8,713.

UK's best-selling cars in March were the Ford Fiesta and Ford Focus, as the market has shifted towards mini and supermini segments.