Motor trade uncertainty causing many motorists to hit the brakes
Buy now or wait for sterling to tumble further amid fear of a hard Brexit?
Diesel or petrol? New or used import? And is the economy stable enough to be taking on more debt?
Uncertainty is the order of the day in the motor trade and it’s not just the no-deal Brexit bogeymen scaring buyers off forecourts. A slump of 12.6 per cent in new car sales is compounded by a slight decrease in used-car imports as well.
At a time when sterling is relatively weak against the euro, any fall in UK imports is worthy of note. Clearly buyers aren’t just replacing new cars for used imports: many are holding back from making any sort of purchase at all.
As the second most significant purchase households make after property, it’s hardly surprising that consumers are treading carefully in the current economic climate.
The automotive world is going through a time of great uncertainty, even before Brexit. Should you opt for petrol, hybrid or electric? Will you feel like a fool in three years’ time trying to off-load a big SUV with a 2.4-litre diesel engine, by which time these cars may be cursed with rampant future carbon taxes?
Many Irish motorists are already concerned that “diesel is dead”, as a recent advertising campaign claimed, and what that might mean to the value of their current car.
Diesel sales are tumbling across Europe, and that fall is being lead by the UK, which saw a 30 per cent drop in new diesel sales last year. That means that the used values of diesel cars in the UK are going to come under yet further pressure, as buyers either trade back into petrol power, or into hybrid or electric cars.
And that in turn will affect the Republic’s car market, where used prices are set on the forecourts of Lisburn and Liverpool, not Leixlip or Longford.
On paper, lower used prices seem like a boon to buyers. But few are coming to the market without a car to offload. The art of the car deal is about the cost of change, not the price of the new purchase.
Diesel or petrol? New or used import? Buy now or wait for sterling to tumble further amid fear of a hard Brexit? And is the economy stable enough to be taking on more debt? There’s a trickle-down affect across the new-car market from all this uncertainty and it’s ultimately driving many motorists to keep their keys – and their wallets – in their pockets.