To buy a car or not to buy a car? The post-Brexit question

This is not, you will be glad to hear, in any way a political blog. 

What is clear, however, is that the Brexit vote will have an impact on the new and used car markets.

Despite initial predictions of economic doom, anecdotal evidence is coming through from new car dealerships that they are as busy as ever.

How long this will last is less certain, and will chiefly be driven by the economic confidence of consumers and the reaction of manufacturers to the falling value of the pound.

Brexit: what do the car makers think?

Right now, it is still a buyers’ market. Such is the competition for sales, despite all the talk of manufacturers having to raise prices because of the impending threat of Brexit, nobody actually anticipates it happening even if it is proven that manufacturing and export or import costs have risen (a delicate equation that's yet to be proven either way).

Instead, the key indicator to keep an eye on is discount levels, which were at record levels prior to the Brexit vote. We’ve not seen much change in that because car manufacturers typically budget three to six months in advance, predicting demand and working their plants accordingly.

As such, the incentives (read discounts) the manufacturers put in place - mostly on the assumption of Britain staying in Europe (and the pound remaining strong) - are still available, and will be for almost all car makers until at least September, and among the longer-term planners to the end of the year.

But if the pound’s value remains low in comparison to the Euro, the likelihood is that the extra margin UK sellers could once use to stimulate sales will decrease. Or, to put it another way the haggle will no longer be as satisfying as it once was.

Vauxhall’s future in Britain questioned following Brexit

That’s not to say that bargain hunters should rush off and buy a car now, though, because there is potentially more good news on the way - and good news of the sort that might not have a short-term threat attached to it.

It comes in the form of the much discussed and occasionally dangled interest rate cut that the Bank of England is rumoured to be preparing to introduce. The vast majority of cars are bought on PCP or PCH lease deals these days, and any drop in the interest rate would positively impact on the most of these deals.