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Evidence suggests that car buyers in the UK are holding off on investing in used vehicles at the moment because of concerns about how the impending EU referendum will impact the country’s economy and car values.
This is according to the motoring guide Glass, which claims that dealerships across the country are finding that higher-value used cars are particularly susceptible to fluctuations in consumer confidence. And as such, any second-hand models worth more than £15,000 are sitting on forecourts for longer than usual, AM Online reports.
Glass spokesperson Rupert Pontin explained that his firm has been keeping tabs on the speed at which used cars sell, with recent changes in buying habits suggesting that demand for used vehicles is suffering a dip at the moment.
He said that while it was initially assumed that the high volume of new car sales was leading to the used market becoming over-saturated, analysts have begun to come to the conclusion that another important factor is the Brexit debate and the question as to whether or not the UK will remain in the European Union after the votes are counted on the 23rd of June.
Dealerships nationwide which stock higher-priced used vehicles believe that consumers are holding off on buying a car until the dust has settled on this decision, fearing that making such a significant purchase in the run-up to what could be an economically unstable chapter in British history would be an unwise move, according to Pontin.
The effect is less pronounced at the more affordable end of the market, but the data suggests that affluent car buyers are more susceptible to concerns about Brexit’s impact.
Pontin made sure to point out that this trend is not necessarily being experienced by every dealership, with some seeing demand for used cars holding up in spite of the uncertainty. He also said that if Britain votes to remain in the EU, economic stability should return in a short time, while a vote to leave would undoubtedly have major repercussions and negatively impact consumer confidence for a protracted period.
When it comes to the dealers themselves, many have voiced fears about what will actually happen to the economy of the UK if it does leave the EU. And it is often the car market that suffers most acutely in any period of economic upheaval, as seen following the credit crunch in 2008.
At the moment, average used car values in the UK sit at a little under £8000, with vehicles priced within this segment most likely to sell quickly, helping to stimulate the marketplace towards further growth. This is significantly below the £15,000 price point above which sluggish sales are starting to take effect.
Pontin said that the cars which tended to sell well irrespective of price were those which either offered a strong set of specifications and equipment or those which were endowed with a popular paint colour. And these are two things which buyers should consider carefully when buying a new or used car on finance, since making the wrong decision might mean that the value of the vehicle depreciates far quicker than initially anticipated.
White is currently the most sought-after car colour in the UK, having undergone a reversal of fortunes in recent years. Meanwhile, silver cars are nowhere near as common as they were a decade ago, showing that fashions and trends can change over time and should be factored into the buying process.
This week the Daily Express reported that bookies have taken millions of pounds in bets from people backing the Leave vote after an ICM poll in the Guardian gave Brexit a four-point lead for the first time. But many other polls have found that the Remain camp has retained a comfortable majority up until this point, showing that the uncertainty which is affecting the used car market at the moment is also pervading the country as a whole.
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Borrowing £7,500 over 4 years with a representative APR of 25.4%, an annual interest rate of 25.4% (Fixed) and a deposit of £0.00, the amount payable would be £239.77 per month, with a total cost of credit of £4,008.96 and a total amount payable of £11,508.96.
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