Brexit set to boost used car market
The decision to leave the EU could provide a boost to the used car sector at the expense of new car sales predicts Startline Motor Finance.
The company believes that the economic conditions already resulting from Brexit – especially the weaker pound and higher cost of capital – will make it very difficult for motor manufacturers to continue offering the levels of support that has kept the new car sales so high in recent years.
CEO Paul Burgess, explained, ‘In terms of the overall car market, we believe that it is new vehicle sales that are most at the mercy of Brexit trading conditions.
‘Manufacturers bringing cars into the UK are having to face increasingly unfavourable exchange rates that will eat away at their margins while, at the same time, finding that borrowing money to put behind their product is becoming more expensive.
‘Bearing this in mind, we don’t see how they can continue to offer the kind of headline deals that have kept the new car market on the boil. Something has to give.
‘What we believe is likely happen instead is a shift towards the used car sector, creating trading conditions similar to those seen after the economic crisis of 2007-08.’
Paul pointed out that the used car market was starting to enter a period of oversupply, creating conditions where prices were likely to fall, making them better value.