End to Brexit uncertainty should see demand for cars in the UK rise

Demand for new and used cars will be ‘unleashed’ in 2020 thanks to the potential end to Brexit uncertainty, according to online vehicle marketplace BuyaCar. 

Around one in six said the decisive result of December’s election has unlocked their confidence to make big purchases, such as cars, a survey of more than 3,000 motorists suggests. 

A total of 15 per cent said that the end to Westminster’s political paralysis meant they are now more likely to go ahead with plans to change their motor.

Analysis of 3,275 responses reveals that the closer drivers are to settling on a choice for their next car, the more confident they feel about committing to spending their money now that the election has taken place. 

This latest research signals a dramatic change of sentiment among motorists who were becoming increasingly wary of making big spending commitments until the question of Brexit in particular is settled. 

Last March, BuyaCar.co.uk revealed that Brexit uncertainty was the top reason given by those who had decided to delay buying another car for two years or longer. 

The unknown political landscape, on top of the fall in demand for diesel, prompted new car sales to dip again in 2019.

The Society of Motor Manufacturers and Traders will confirm the severity of the decline for the full year next week, though figures up to the end of November confirm that sales were down by 2.7 per cent – some 60,915 fewer registrations than the year previous. 

Christofer Lloyd, editor of BuyaCar.co.uk, said Brexit uncertainty has been ‘deeply damaging to consumer and business confidence’ but this latest survey suggests that a lot of pent-up demand is about to be unleashed now that the question has been decisively settled.

He adds: ‘The car industry has had a torrid time since the 2016 referendum and although our own sales of used cars have continued to grow, the new car market in particular has been consistently falling. 

‘From this research it seems clear that, wherever you stand on Brexit, an end to uncertainty may be just the thing to unleash buyers back into the market.’

James Batchelor, from Auto Express, said: ‘The uncertainty surrounding Brexit has affected the car industry as a whole but consumer confidence has been hit particularly badly, with new car buyers holding off purchasing their next car. 

‘This research is very revealing as it backs up our own view new car buyers will be more keen to part with their cash in 2020.’

He added that, having endured over two difficult years, manufacturers are likely to offer hugely tempting deals to get motorists through showroom doors.

‘Many car firms are under pressure to shift high polluting cars as quickly as possible in order to avoid hefty financial penalties. 

‘And with cleaner, more electrified cars set to appear in their droves in the coming months, the new car landscape will be very different by the end of the year.’

Electric cars set for huge discounts in 2020? 

While discounts are likely to be big on the thirstiest of petrol and diesel engined models, motorists could also reap the reward of improved incentives for electric vehicles.

According to What Car?, UK buyers are likely to be offered deals discounts on battery electric and plug-in hybrid models in 2020, as manufacturers attempt to avoid EU fines brought about by tough new emission rules which were introduced on 1 January.

Under the new stipulation, manufacturers who sell more than 300,000 cars per year in 2020 and 2021 are required to meet an average CO2 figure of just 95g/km.

Failure to meet this target will result in a fine of €95 (£81) per car applied for each gram per kilometre by which they miss the target. 

Steve Huntingford, editor at What Car?, said: ‘Ratings agency Moody’s has calculated that the biggest car manufacturers in Europe are in line for fines totalling €2.4billion (£2billion).’  

This means there will be an increased effort by auto brands to persuade drivers to switch to electric vehicles, which produce zero CO2 emissions and will therefore help them sit within then new pollution restrictions.  

Currently, pure electric models represent just 1.5 per cent of all UK vehicle registrations.

They are currently outsold by gas-guzzling SUVs at a rate of 37-to-1, heaping pressure onto manufacturers to change buying habits. 

With demand being relatively low compared to petrol in particular, Huntingford predicts dealers will trim the cost of battery electric cars more significantly to drum up orders.