Brexit unlikely to affect used car market

Brexit decision unlikely to affect used car market until Q4, says Glass's

Used car dealers are unlikely to see an impact from Brexit until the fourth quarter of 2016, according to valuations specialist Glass's.

Rupert Pontin, head of valuations for Glass's, said on Monday that following the decision to leave the European Union, the UK is in a period that could be characterised as the calm before the storm: "The decision to leave has been taken but we have yet to see many material changes."

Pontin expects that it will take several months for the initial impact of Brexit to be seen, and the summer break -- traditionally a quieter period in the trade -- is also likely to delay the aftermath.

Fuel costs are anticipated to be the first factor to hit the car and van markets. As the pound has dropped in value, oil will become more expensive and that means pump prices are likely to rise.

The new prime minister's position on when to enact Article 50 may also trigger a period of further instability, Glass's believes.

Hopefully, from there, we will soon start to see a picture emerging of the timetable for the next few years, which will at least allow dealers and manufacturers to plan more accurately,
- Pontin said

Further down the line, larger scale economic issues may start to emerge.

"The next set of indicators are likely to be seen in areas such as retail and the housing market if consumer confidence continues to fall and lenders become more risk averse, making borrowing more expensive," Pontin explained.

"What is challenging, if not impossible to predict, is how strongly all of these factors will affect the car market. It has been very strong and resilient in recent times, which is a good starting point.

"However, it is difficult to foresee a situation in which the decision to Brexit does not have a negative effect on both new and used car sales in the short-medium term even if, as leave campaigners promised, it turns out to be good for the economy in the longer term."