Ever since the EU referendum in June 2016, a huge wave of uncertainty lingers on for the UK, European Union, and pretty much the entire globe. With an influence on travel, trade, security, and a whole lot more, all the commotion around Brexit continues to flummox various businesses throughout every sector.
Does the automotive industry come into the picture as well? You might be second-guessing purchasing used cars considering the numerous Brexit repercussions.
However, before you postpone buying that stunning, nearly new Ford Fiesta or rugged Nissan Juke, you should check out how Brexit will affect used car prices. It’ll help to understand the used car situation by first going through the effect of Brexit on brand new cars.
The new and used car industries are no doubt closely interlinked. How is that so? Let’s find out
Impact on New Car Sales
The EU accounts for nearly eighty percent and fifty-two percent of the U.K.’s import and export vehicles respectively. In the short term, these numbers can fluctuate considerably, causing new car dealerships and car manufacturer businesses to suffer.
Which factors have altered car sales so far, and will they continue to do so after Brexit? Here are a few factors.
A Drop in Pound Sterling
Right after the EU referendum, the value of pound sterling significantly declined against the Euro. The immediate effect on the automotive industry was a rise in imported component prices. Considering that sixty per cent of parts for automotive made in the UK are imported from the EU, new car prices would be on the rise.
Although the depreciation of the pound sterling is one of the main factors affecting industries everywhere, a few other factors can also hurt new car businesses.
Challenges for Automotive Manufacturers
Automotive manufacturers currently face a huge skill gap in the country, especially in production engineering and design. With great flexibility for labour across the European Union, the automotive sector is able to move employees around the continent and provide proficient training opportunities and even opt for more skilled labour from other countries.
After Brexit, we can expect more challenges for manufacturers because these opportunities will not be available anymore – at least not as easily.
Uncertainty for Consumers
Until consumers know for sure how the UK stands economically, it’s natural to wonder if purchasing a new car is the best choice now.
A series of imperative questions arise for new car buyers.
Will car parts become more expensive?
Will they be easily available?
Will Brexit discontinue shipments entirely? Or will shipments be late?
Ultimately, the new car sales will suffer greatly in any Brexit situation –hard exit or soft exit. That’s not the case for used car business. Used cars might not be affected at all with a soft Brexit arrangement. But what about a no-deal Brexit?
What Happens with No-deal Brexit?
With import taxes soaring, new cars become very costly. As a result, consumers opt for used cars primarily because they offer more value for money.
Therefore, a no-deal Brexit might not cause any deviation in used car prices. That’s not to say that down the line, as used car demand increases, they may become more expensive.
A no-deal Brexit situation will also reduce the production of vehicles in the UK. Without a trade deal, new policies and tariffs will make production more costly and cause leading manufacturers to move to other countries.
More Trust in The Used Cars Businesses?
In recent times, we’ve seen a perception shift for car buyers. People are now favouring used vehicles more mainly because of the increased trust, transparency, and value for money.
That’s great news for you if you plan to buy a used vehicle. However, purchasing a used vehicle still comes with its risks. If you’re opting for a used car, be extra careful before making your purchase. Get a free car check to verify its details.
The check simply requires you to provide the registration or VIN number of the vehicle. The free vehicle check history is useful for exploring details such as previous owner information or mileage history.
Although some used cars sellers might provide you with their very own car test reports, we endorse you perform your own inspection for peace of mind.
Get the complete details about the cars to get in touch. If you know more information about their offers, the state-of-the-art information and updates test the entire car details and lots more. Let See! And be a part of with our crew Facebook, LinkedIn, Twitter, YouTube, Pinterest, and Instagram.