New car Brexit tariffs will ‘likely’ lead to a ‘further shift’ towards the used car market

New car Brexit tariffs will ‘likely’ lead to a ‘further shift’ towards the used car market

European built cars imported to the UK will be slapped with a 10 percent increase on tariffs from 1 January 2021 when the transition period comes to an end. The Department for International Trade has confirmed cars built in EU countries will be hit with the charge under World Trade Organisation (WTO) guidelines in a similar way to other nations. 

“UK manufacturers absolutely need to make the most of this proposed increase to import tariffs and ensure that any cost savings they can make are passed to the consumers. 

“As we enter an almost certain economic recession, every consumer will be watching the pennies and making smart purchasing decisions to keep their finances secure.  

“The used car market is primed to deliver on this, helping consumers get on the road with a good deal.”

Last year, specialists told that leaving the EU would not have any impact on used car prices which were set to remain stable. 

Used car sales have been affected by the coronavirus with the market down 8.3 percent in the first quarter of 2020. 

Data also shows used car costs had remained stable during the crisis with costs down just 0.2 percent year-on-year. 

Some specialists believe the economic damage caused by the coronavirus and Brexit may push motorists towards the used car market. 

Sean Kemple, Director of Close brothers Motor Finance said: “We know that in times of economic hardship, buyers often shift from new to used cars in order to get their hands on a more affordable vehicle.”

The Society of Motor Manufacturers and Traders (SMMT) have warned the introduction of tariffs would also affect cars built in the UK. 

They warned tariffs would also apply to car parts which would push up manufacturing costs. 

The group warns on avenge, new car prices would rise by £1,500 once the tariffs are introduced. 

The SMMT claims nine out of ten are imported into the UK meaning any extra charges would affect the majority of car buyers.

Mike Hawes, Chief Executive of the SMMT said: “The majority of components that help build British vehicles come from overseas, while nine out of every 10 cars bought in the UK are imported – seven of which being from the EU. 

“We must avoid any tariffs or barriers that add cost and reduce choice for consumers, and which would result in like-for-like barriers to export, undermining UK manufacturing competitiveness.”

Published at Thu, 21 May 2020 11:26:00 +0000