Page last updated at 15:56 GMT, Monday, 30 June 2008 16:56 UK

Credit crunch hits NI motor market

By Martin Cassidy
BBC News

First it was the housing market, but now motorists are also feeling the pain of the credit crunch as well as rising fuel prices and hikes in car tax.

On Belfast's Boucher Road, no-one wants to hear any talk about recession. Consumer confidence is seen as being low enough without further media comment on the downturn.

Car dealer
Forecourts are filling up with unsold vehicles

And yet here in the heart of the city's motor industry, falling sales and redundancies are the reality.

It's not just that there are fewer buyers around, tighter credit controls are also hitting sales.

A sales director at a major dealership confirmed that growing numbers of potential car buyers are being turned down for finance deals.

Just as in the mortgage market, the finance houses are looking to limit their exposure to bad debt and to increase margins.

The net result is that fewer people are now completing the process which starts with them walking through the salesroom door and finishes with their signing a credit agreement.

The result is that the forecourts are filling up with unsold vehicles.

And it's the same picture across Northern Ireland. Evidence of the downturn is not hard to find. In Portadown the Jaguar dealership is set to close.

But the toughest part of the market is second-hand petrol guzzlers. These big-engined cars, particularly automatics, are proving hard to shift.

One of the big Belfast dealerships said these older vehicles now represent a major problem.

Not only are they hard on fuel but the annual excise duty on a typical two-litre sports saloon has increased to 400.

Big-engined petrol cars are traditionally sold on at discounted prices to the second-hand trade but it is now proving difficult to shift these cars

Compare that with just 35 for a new low carbon emissions small car.

And that gap will widen again next year and the year after when the big car will attract an annual road tax bill of 750 while the small car will be free.

No wonder there is a glut of thirsty second-hand cars on the market.

And that's a problem.

Motorists wanting to trade down to something more economical are finding that many garages are reluctant to take their older vehicle as a trade-in.

Big-engined petrol cars are traditionally sold on at discounted prices to the second-hand trade but it is now proving difficult to shift these cars.

It's now not just a case of taking a bad price for a thirsty big car, the response is increasingly, "sorry we can't take it".

A second-hand dealer near Lisburn confirmed that sales have fallen sharply and said some motor traders are finding it hard to even meet their weekly running costs.

For a two-litre saloon bombing along the motorway at 85mph, there is the chance to avoid penalty points and to save nearly half a litre of petrol every ten miles by dropping back to 70mph

So with little prospect of shifting a gas guzzler many motorists are left driving cars with an unhealthy thirst.

Caught by the rise in fuel prices, these motorists now find that a fill of petrol can cost 80 or more. Ouch!

So what to do?

Well according to the Advanced Motorists of Northern Ireland, there are quite a lot of things which a typical family can do to ease the weekly petrol bill.

Not surprisingly the advice starts with reducing your speed. In a big car the savings can be startling.

For a two-litre saloon bombing along the motorway at 85mph, there is the chance to avoid penalty points and to save nearly half a litre of petrol every ten miles by dropping back to 70mph.

By the same token reducing from 70mph down to 60mph will also deliver significant savings.

But there are other ways too to reduce your fuel bill.

Excess baggage can add 2.5% to fuel consumption. Simply removing golf clubs and other weighty items from the boot will save you money in fuel.

At this time of the year many motorists use a roof rack storage box when heading off on holiday.

But how often does the box stay on long after the trip is over?

There are many ways to save on fuel

That roof box is adding 2.5% to fuel consumption so get it off the car when not in use.

Next to excessive speed, under-inflated tyres is one of the most wasteful factors in fuel consumption and can add 2.5% to your fuel bill.

We are told to check tyre pressures once a month but once a year or even never was the answer many motorists here gave when asked.

Then there is traffic congestion. For many motorists the journey into the city may be unavoidable and at peak times.

But for those who can plan their journey, there are savings to be made.

The Advanced Motorists of Northern Ireland (AMNI) reckons that cars that can travel at suburban speeds instead of an inner-city crawl can save half a litre of petrol every 10 miles. That's almost 60p.

So now you are really beginning to focus on the things which use extra fuel and the techniques which can squeeze more miles from every litre.

Keeping the air conditioning on when you don't need it is another way to burn unnecessary fuel. Often the air vents will do the job perfectly well.

Plugs and filters

Worn spark plugs and dirty air filters are the result of delaying a service. But the few pounds spent replacing these items will be more than saved in better fuel consumption.

When you think about it, the car will have to be serviced at some stage, so why not do it on time and make the savings in fuel usage which will result?

And the savings don't stop there.

An increasing number of motorists are taking advanced driving courses which focus on safety and economy.

Aaron MacQuarrie of the AMNI's north Down group said many drivers who learn the techniques of reading traffic flows and driving accordingly report significant fuel savings.

Slowing for a red light on the main A1 dual carriageway near Hollywood, Aaron explained that in his own car, he has managed to save around 8 miles per gallon by applying advanced motoring techniques.

Back on Boucher Road the motor trade is hoping the downturn will prove short lived.

But with no sign of oil prices falling, many motorists are starting to look again at what they drive and how they drive it.

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