The decision to trigger Article 50 has undoubtedly ruffled many a feather in the automotive industry, as it is difficult to foresee what the UK will look like when it finally leaves the single market.
While many vehicle manufacturers currently have factories in different locations across the UK, it is possible that some may choose to leave the country to take their premises elsewhere.
If so, this could have serious repercussions for consumers, and financing might become the future of the nation’s automotive industry.
Rising Vehicle Prices
Depending on the deal agreed by the European Union, it is possible car, and petrol prices could rise once the UK leaves the EU. After all, the single market was created to stimulate trade, innovation, and technological development, while raising vehicle standards and reducing their prices.
By leaving the single market, consumers may need to pay considerably more for vehicle exports, which could encourage drivers to invest in finance deals over paying for a vehicle outright.
A Lack of Consumer Confidence
As many people across the UK believe leaving the single market could lead to short-term financial hardship, consumers have reportedly been spending considerably less money following the vote to leave the EU.
Consequently, UK residents are spending less money on new cars due to a lack of confidence. As people are unwilling to pay thousands of pounds for a brand-new vehicle due to financial concerns, many are turning to financing to secure a reliable vehicle.
Financing ultimately provides consumers with the peace of mind that they can drive a dependable vehicle, and they won’t need to spend a substantial amount of money to do so. Instead, they can commit to an affordable, weekly or monthly repayment that suits their budget.
It’s not only on cars and vans that people might turn to financing, either, as autofinanceonline.co.uk provide superb deals for motor homes, caravans, and even horseboxes.
The Loss of Motor Manufacturing Plants
While many UK manufacturing plants are reportedly safe until 2020, it is impossible to predict what will happen once a contract is complete.
For example, Ralph Speth, the Chief Executive Office at Jaguar Land Rover, has reportedly warned the Prime Minister that a hard Brexit could potentially threaten various manufacturers’ survival in the UK.
Losing manufacturing plants could also have serious repercussions on the UK economy, as the sector was reportedly worth £15.2 billion in 2017. What’s more, it could lead to larger vehicle prices, as a duty could be levied on vehicles being imported into the country, as they will no longer be manufactured in Britain.
Conclusion
At present, it is impossible to predict how the UK will fare once it leaves the European Union. Until then, consumers are more likely to opt for a finance deal over paying for a vehicle in full. Plus, if the right deal isn’t agreed and motor manufacturers choose to abandon the UK, it’s likely vehicle prices will rise, which could dent consumers’ pockets and will make car finance a less risky option.