Used car values under spotlight
There would be ‘significant uncertainty’ over used car values if the UK left the EU following the June referendum according to Glass’s.
Glass’s, a leading automotive data provider, points out that there are virtually no precedents on which to base the likely impact of a BREXIT.
Rupert Pontin, head of valuations, said, ‘When we try to model something like this, we gather as much relevant data as possible, looking especially at previous examples, but here there is very little to which we can refer, especially in terms of the longer term impact.
‘However, what is clear is that anyone else trying to make predictions of this kind is in exactly the same position, so there is significant uncertainty and this, in itself, is very likely to have an impact on used car values.
‘It is possible to foresee a position where, for example, a major dealer group might write down all their stock by a few percentage points if there was a successful exit vote simply in order to be financially prudent in the face of the unknown.
‘This kind of behaviour could, in itself, contribute to something of an economic slowdown, which would compound the effect on values.’
Rupert said that Glass’s largely agreed with the general analysis by the Bank of England, that a BREXIT would have an effect on areas such as investment, household spending and sterling.
‘Politically, of course, we have no axe to grind for either remaining or leaving but it seems fairly certain that there will be an immediate impact on these areas, which will all reduce demand in the used sector. How long it would take the economy and therefore the car market to recover, it is difficult to say.’
Meanwhile used cars that have covered ‘starship mileages’ of 150,000 miles or more are no longer off-putting to buyers if the condition and the badge is right, reports Glass’s. Rupert explained that the market was catching on to the fact that modern cars were capable of much higher mileages than even just a few years ago.