The SMMT data shows that total UK new car registrations jumped 14.2% in October to 179,714 units, marking the 32nd consecutive month of growth.

Fleet registrations saw a strong surge in October with a total of 89,718 models registered last month, up 15.2% on October 2013’s figure of 77,875. Meanwhile sub-25 business registrations rose 10.3% from 8,207 in October 2013 to 9,056 last month. Retail registrations also saw a large rise, up 13.6%.

The October surge means that 2,137,910 cars have now been registered in the year-to-date – marking the first time the market has passed two million in October since 2007.

Commenting on the figures, David Raistrick, UK automotive leader at Deloitte, said: ‘It is now 32 consecutive months of comparative growth which have been achieved in the UK’s new car market and whilst the % growth being achieved each month is not quite what it was this time last year, the fact is that more cars are being sold on a regular month by month basis with the total sales for the 10 months of 2014 already being in excess of the full year sales achieved in the years 2008 to 2012.’

Looking at what’s behind the numbers, Raistrick added: ‘One of the identified contributors to the growth in new car sales has been the significant amounts of money returned to consumers via PPI refunds.  It should be noted, however, that the average level of refunds paid to an individual has not been sufficient to purchase a new car outright.  With the growth in the share of finance backed new car sales, the conclusion must be that PPI refunds have effectively enabled consumers to pay the deposit on the new car whilst taking out further finance for the balance. 

‘Whilst the injection of PPI related funds will clearly come to an end, they are one of a number of factors that have contributed to a much faster rate of recovery in the UK automotive market than has been achieved in the other major European markets. Looking ahead, the level of new car sales in the UK has probably reached a plateau, providing the economy remains on its current growth trend and employment levels are maintained. 

‘It will, however, be interesting to see how the recently announced pension changes will impact on the market, as individuals will have access from April next year to their pension pot value rather than receiving the managed monthly amount through an annuity.  Notwithstanding this, however, our market analysis suggests that the UK car market is unlikely to be able to continue rising beyond current levels.’