Brexit & New Car Prices: Everything You Need To Know
New car prices are unlikely to rise drastically in the UK after Brexit, as the EU and UK have reached a tariff-free trade deal.
Jan 04, 2021
UK car industry sighs huge relief as Brexit deal means tariff-free trade
As we welcomed the end of the Brexit transition period on 31st December 2020, a last-minute trade deal worth £660 billion between the UK and EU was reached.
At 11pm on 31st December 2020, the transition period for the UK came to an end, and for the first time since 2016 (when the UK voted in favour of Brexit), we knew how things for the motor industry would finally look post-Brexit.
Director-General Eric-Mark Huitema of the ACEA (translated to European Automobile Manufacturers Association) said: “There is no other industry that is more closely integrated than the European automotive industry, with complex supply chains stretching right across the region.”
Read on to find out everything you need to know about buying a new car after Brexit.
New car prices after Brexit
It’s been a sceptical 4 years since the UK voted in favour of Brexit and the talks of a 'no-deal Brexit exit' haunted many industries including the UK car industry with a suffocating blanket of uncertainty.
Just days before a free-trade deal was reached, it was predicted that car prices would increase by an estimated 10% after Brexit due to the risk of falling under policies of the World Trade Organisation (which imposed a 10% import tax on any vehicle imported into the UK).
However, following the successful tariff-free trade deal agreed upon by the UK and EU during the transition period, you will be pleased to know that buying a new car after Brexit will pretty much feel the same as buying a new car before Brexit – give or take the usual minor appreciation of new cars.
How will Brexit affect new car prices?
Thanks to the new trade deal proposed on 24th December 2020 and then finalised shortly after, the EU and UK will continue to import and export vehicles with minimal disruption to current trading policies.
For us and our community of car buyers, this means we can continue to import brand-new cars into the UK without incurring extra trade costs and are therefore able to carry on offering the best prices on new cars to our customers.
With the worry of the previously anticipated 10% World Trade Organisation tariff gone, you can rest assured that extra expenses are not passed on to you from car dealers around the UK.
The Society of Motor Manufacturers and Traders (SMMT) raised a few brows when the trading association estimated a 'no-deal' Brexit could cost the car industry £55 billion only 5 years down the line, whilst adding an extra £2,000 on average to the price of a car bought in the UK.
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Mike Hawes, Chief Editor of the Society of Motor Manufacturers and Traders (SMMT), responded to the new Brexit trade deal by saying: “We welcome today’s agreement of a new EU-UK trading agreement, which provides a platform for our future relationship.
We await the details to ensure this deal works for all automotive goods and technologies, including specifics on rules of origin and future regulatory co-operation.”
He added: “A phase-in period is critical to help businesses on both sides adapt and efforts should now be sustained to ensure seamless implementation, with tariff-free trade fully accessible and effective for all from day one.”
When should I buy a new car?
Now that Prime Minister, Boris Johnson, can confirm the new trade deal as one that will “allow UK goods and components to be sold without tariffs and without quotas in the EU market”, describing it as a “comprehensive Canada-style free trade deal”, car buyers can assume to receive minimally inflated price tags on new cars.
That being said, a number of carmakers and sellers around the country have been holding new car sales with high promotions and savings in the lead up to the Brexit-deal announcement, encouraging customers not to worry if they are in the market of buying a new car.
Given the current pandemic as well as the tyings of loose ends regarding Brexit, buying an in-stock new car prepared for instant collection means you can avoid any delays that may incur as a result of Covid-19 or Brexit.
Whether you know exactly what car you're after, or would benefit from speaking to one of our Specialists, you can begin by browsing our latest new car offers from major brands today. Follow the links below to get started.