Brexit has affected the UK car industry in a variety of ways, and the latest news is tied into the price of leasing a new car going up. According to research carried out by accountancy firm UHY Hacker Young, the price has increased by 9% in the space of a year. The monthly cost of leasing a car jumped from an average of £232 in February 2017 to £253 in February 2018.
The increase is due to the weakened pound pushing import costs up for car manufacturers, with the expense being transferred to customers. Another factor is the growth of sales in European markets, meaning less business is being done in the UK. Also, contract hire providers are likely to be increasing the cost of leases to compensate for the drop they expect in the residual value of diesel cars.
Paul Daly, partner at UHY Hacker Young, said “UK car buyers have benefitted from a period of deep discounting, but that seems to be coming to an end. There are still some great discounts around, particularly for vehicles financed under PCP (Personal Contract Plan) arrangements and now could well be a good time for consumers to change their vehicles before prices rise further.”
“Long-term Sterling weakness means manufacturers are having to shift their rising supply chain costs on to consumers. Strengthening European car sales have also meant that the UK market is having to soak up much less excess stock from mainland Europe, which is also starting to drive up prices here. That is particularly true for prestige German car – the days of leasing an Audi A3 for less than a Vauxhall Astra appears to be over for now.”
The three biggest rises in monthly costs were for German-made cars: the Mini Cooper D (31%), Audi A3 (23%) and Mercedes-Benz C220 (19%).
With the price of leasing cars going up, it points to a consistent picture of Brexit continuing to change the car industry on a regular basis. This can be seen in Jaguar Land Rover cutting 1000 jobs on the 13th April 2018, blaming the decision on Brexit and the drop in popularity of diesel vehicles. Only time will tell what happens next.
