UNCERTAINTY over Brexit could cost the British motor industry an estimated £6.5bn as consumers become more cautious about buying a new car, according to a new study.
The study from AA Cars, the used car website, found that an estimated 377,000 motorists “strongly agreed” that Brexit was making them think twice about buying a new car.
Around a quarter of the motorists who were surveyed on behalf of AA Cars predicted that leaving the EU will push up the price of everyday driving costs.
Twenty three per cent of respondents expected new car prices to rise, and 26 per cent were concerned about a possible spiralling cost of fuel.
Drivers in Scotland were the most pessimistic about car prices, with a third “agreeing strongly” that we will see price increases due to Brexit.
The AA-Populus poll, which surveyed 15,470 AA members about their car buying intentions in light of the EU referendum, also found that six per cent of drivers “strongly agreed” with the statement that they will delay buying a new car until they know what Brexit really means.
Altogether, seven per cent of respondents said they “strongly agreed” that Brexit was making them think twice about buying a new car’.
According to the Society of Motor Manufacturers and Traders (SMMT) there were 2.69m new car registrations last year.
An AA Cars spokesman said: “Over the next two years, as the UK negotiates its way out of the EU, that’s a potential 5.39m new registrations in 2017-2018.”
Seven per cent of this figure is just under 377,000, the spokesman added.
Younger drivers are among those who are feeling the most concerned, with nine per cent of 25-34 year olds stating they had been put off buying a brand-new car by Brexit, with one in 10 of that age group looking to buy a used car instead.
Simon Benson, the director of motoring services at AA Cars, said: “It’s impossible to predict exactly what Brexit will mean for the British motor industry, but it’s already clear that the current climate of uncertainty is having a real impact on car buying intentions across the UK.
“With rising inflation likely to weaken consumer confidence, and a first Bank of England rate rise for many years now looking far less remote, many drivers across the UK have quietly started to pull back spending on big ticket items such as brand new cars. “It’s hardly surprising that their intentions towards buying second-hand have hardened as a result.
“Collectively, Brexit fears could hit the British motor industry for six billion,’’ he added.
“The UK has done well in the short-term to solidify high-profile deals with certain manufacturers, but until we can truly clarify what international trade is going to look like in two years’ time, the automotive industry is going to be at the whim of a growing number of social and economic headwinds.”
The UK’s new car market grew by 8.4 per cent in March, which is the highest monthly growth since records began, according to figures released earlier this month from the SMMT. Altogether, 562,337 new cars were registered in March, which was more than double the number in the first two months of the year combined, the SMMT said.
Earlier this month, Mike Hawes, the Society of Motor Manufacturers and Traders (SMMT) chief executive, said: “Looking ahead to the rest of the year, we still expect the market to cool only slightly given broader political uncertainties as there are still attractive deals on offer.”