Pension revision to boost market
Cars could be the target of older people who ‘treat’ themselves using cash released following revised pension rules that come into effect this week.
Experts from Glass’s are predicting that, with hundreds of thousands of older people predicted to draw a tax free lump sum out of their pension pot, some of this money will inevitably be spent on cars.
Rob Donaldson, car editor, said, ‘There is really no precedent for this, so it is difficult to forecast the exact effect that it will have on the new and used car sector, but it seems likely that a proportion of older people will use the new rules to treat themselves.
‘The kind of deals that might be made could range from someone buying a Ford Fiesta or Hyundai i10 as their ‘last’ new car through to others splashing £3K on an old MG TF or Mazda MX5 for some summer fun. This could then provide a boost for dealers, especially in areas where a lot of pensioners live.
‘We are certainly not saying that the streets of Eastbourne will suddenly be lined with Aston Martins but there is every reason to expect an increase in business for some dealers which will be quite welcome as we head into the traditional summer slowdown.’
Rob added that these sales would buck the current market trend towards leasing as they would be, by their nature, cash sales.
He said, ‘Clearly, the older generation are much less likely to favour leasing anyway and, by the nature of the purchase, these are cash reserves that they feel that they can afford to spend.’