Advertisement

Brexit vote to spell end of pre-registered car bargains

The falling pound is forcing car makers to rethink strategies; prices could be set to rise according to experts

The pre-registration market could be set to shrink, while car prices rise, as the UK edges closer to the EU exit door.

Experts admit that with the pound weakening against the Euro, the UK is becoming a less attractive market for manufacturers to push cars through.

The UK has achieved record growth in car registrations over the past few years, with some predicting it could hit three million by the end of the year. Pre-registrations – which allow dealers to offer nearly-new models at a fraction of the list price – had buoyed the market and were estimated to account for 15 per cent of 2015’s figures.

Advertisement - Article continues below

Pre-registered cars: a buying guide

But sales forecasts have changed since the Brexit vote, and exchange rate volatility has led to car sale margins shrinking. 

That means dealers aren’t able to offer such generous deals. The full effects are likely to be felt in early 2017 when manufacturers reset targets, with senior Ford execs already admitting it will hike car prices within a year to claw back money lost. Philip Nothard, CAP HPI consumer and retail specialist, said: “There’s a potential for manufacturers to move away from pre-registrations and a bit more into the rental market. There’s been a bit of kickback from dealers on pre-registrations already, as it’s a costly market that takes up cashflow.

“Some manufacturers will continue in volumes, but others won’t. Last year every manufacturer was involved.”

Mike Hawes, chief executive of the Society of Motor Manufacturers and Traders (SMMT), admitted transaction prices could rise despite finance packages remaining very attractive. He added: “The UK has benefited from the strong sterling but margins will diminish.” 

How the EU referendum could affect motorists

The British manufacturing industry also faces an uncertain future despite hitting a record 16-year high in the first half of 2016. 

New UK-built models like the Vauxhall Astra and Jaguar F-Pace helped factories to produce 897,157 cars so far this year, but the threat of 10 per cent tariffs on exports could mean manufacturers look elsewhere for the next model cycle.

Hawes said: “The deal we had was the best we could anticipate. We want to remain competitive going forward.”

How do you think the car industry will fare in the future? Leave us a comment below!

Advertisement
Advertisement

Recommended

Visit Concerns as rise of connected cars coincides with sharp increase in cyber attacks
Consumer news

Concerns as rise of connected cars coincides with sharp increase in cyber attacks

Some 67 per cent of new cars registered in the UK are ‘connected’, with automotive cyber attacks rising rapidly
27 May 2020
Visit Driving eyesight rules explained
Consumer news

Driving eyesight rules explained

What is the minimum vision standard required to drive on UK roads? And how can you check your own eyesight before driving?
26 May 2020
Visit Over a million unroadworthy vehicles set to return to the roads
Consumer news

Over a million unroadworthy vehicles set to return to the roads

Nearly 1.1 million vehicles given a six-month MoT extension are projected to have dangerous or major defects
22 May 2020
Visit Calls for car dealerships to reopen as closures costs Treasury £61 million a day
News

Calls for car dealerships to reopen as closures costs Treasury £61 million a day

Every day dealers remain closed costs the Treasury £20 million in lost tax revenue, and £41 million in furlough payments
21 May 2020

Most Popular

Visit New Volkswagen Golf GTI ride review
Volkswagen Golf GTI Hatchback

New Volkswagen Golf GTI ride review

Hi-tech new controls aim to keep legendary Volkswagen Golf GTI hot hatch’s driving dynamics at the top of the class
12 May 2020
Visit VW to pay customer £25,000 following new Dieselgate ruling
Volkswagen

VW to pay customer £25,000 following new Dieselgate ruling

Volkswagen has lost a landmark court case in Germany and must now pay significant compensation
26 May 2020
Visit All-new Fiat 500XL set to replace 500X and 500L
Fiat 500 X

All-new Fiat 500XL set to replace 500X and 500L

The next-generation 500X and 500L models are likely to merge into the Fiat 500XL and our exclusive images preview how it could look
25 May 2020