Why soaring car sales should jump start a new environmental debate

Sign of a booming economy? Barry Batchelor/PA Wire

Car sales have raced to a ten-year high according to new figures that are being celebrated as part of wider signs of a UK recovery. In the latest monthly figures published by the Society for Motor Manufacturers and Traders 425,861 new cars were registered; a rise of 5.6% and the biggest September sales figure since 2004. These numbers represent the 31st consecutive month of growth in the new car market and bring registrations for the year so far to nearly 2m.

The steady rise of new car sales is being taken as vote of confidence for the UK economy, suggesting that consumers feel comfortable enough to spend their cash. Indeed, new car sales are now at their highest since before the recession – recovering at a greater rate than most of Europe.

Too good to be true?

In part, September’s soaring sales are reflective of the fact that it is always a popular month for new cars, as it brings with it the latest registration plate. But those readily parting with their cash should be wary of the too-good-to-refuse finance deals.

These deals are the main driver of improving sales figures. Last year, almost three quarters of new cars were sold to consumers on credit. Volkswagen alone reports its loans and leasing business has increased 40% in the last two years. And these personal contract purchases are usurping the second-hand car market.

Propping up the market with such deals may be unsustainable in the long run as many consumers will get a nasty shock when they realise they do not have the equity they imagined in the car and are not in a position to buy. Not only might they be put off future purchases but they find themselves unable to afford a new car following the three-year contract period.

A sustainable future

Our insatiable appetite for new cars also raises environmental concerns. How can we ensure that our love of new wheels is sustainable?

Admittedly, new petrol and diesel cars are more efficient than their forebears and have shown ever improving emissions levels since the turn of the century, but there is no room for complacency if the UK is to meet strict European Union targets for 2020. And while overall sale volumes remain extremely small at just over 3,000 (less than 1% of September’s total sales), electric cars have seen an increase of a whopping 426% on 2013. Plus, alternatively fuelled vehicles are increasingly grabbing market share from internal combustion engines as a result of more models becoming available.

Private car ownership, though, remains destructive for the environment. Petrol and diesel cars still emit damaging levels of CO2 that cause localised pollution and contribute to worldwide climate change. Most electrics will be powered from fossil-fuel fired power stations, potentially causing twice the global warming of internal combustion engines. And mass-produced vehicles of all stripes require intensive production processes for their steel bodies and use up finite mineral reserves.

Even the growth in electric car sales is not necessarily good news for the environment. Their limited range means most drivers see them as suitable only for use within cities, not between them. They are often used as second cars, so supplementing not replacing larger ones. And, within urban areas, use of electric cars will replace buses, trains, trams, metros, cycling and walking – each more environmentally sustainable than any private vehicle.

Some of us need to own a car, most notably in rural areas where 73% of drivers in rural areas rely on a car for shopping and 81% require one for work, in contrast with figures of 46% and 48% for towns and cities. But, with most of the UK living in urban areas, the number of cars being bought reflects desire rather than a need for new vehicles. And, with the biggest growth in owners being among those on lower incomes, the credit boom is surely responsible, meaning we need to question just how much of a good news story the new car sales figures are in the long term.