Car manufacturers are announcing their plans in the event the UK leaves the EU without a deal at the end of the Brexit transition period on 31 December. Any additional costs in manufacturing and importing cars, risks price rises for car buyers - reports Which? Magazine.
With a potential no-deal Brexit outcome, new car prices are at risk of increasing here in Northern Ireland after the transition period on 31st December. Because of this car buyers are advised to purchase now to save money and get a better deal before potential price rises in 2021.
Prices would rise due to the additional costs there would be in manufacturing and importing cars under these circumstances. Manufactures may have no choice but to increase retail prices to compensate for increased costs.
Even if a deal is reached, this doesn’t necessarily mean prices won’t rise, as it would depend on the details of the deal. So complete your new car purchase soon if you want to minimise what you pay.
There are currently no tariffs on cars imported from the EU as the UK is following the EU trade rules until the transition period ends on 31st December. However if the UK leaves without a trade agreement, in line with World Trade Organization (WTO) rules a tariff of 10% will apply to new cars imported from EU.
According to the SMMT (Society of Motor Manufacturers and Traders), this would lead to an average price increase of 6.3% to car buyers if manufacturers passed on the full 10% import tariff. This is because import charges are priced on the customs price of a car at the time of import, rather than the final retail price.
Ford of Britain MD said: ‘In a no-deal scenario and the imposition of a WTO 10% tariff regime on new vehicles, prices for Ford’s most popular passenger and commercial vehicles would rise by between £1,000 and £2,000.
Below is what a 6.3% increase would look like with the WTO tariff applied.
|Model||Purchase price||Price with WTO tariff applied||Price increase|
The ‘purchase price’ is the latest on-the-road price of the entry-level model for each car, provided on the manufacturers’ websites.
To avoid a price increase when purchasing your next car, we would suggest moving your next purchase forward and placing your order as soon as possible. This is the only way to ensure you do not get stung by higher prices and also means there’s less chance of delays in delivery with importing and sourcing the vehicle.
This is the case as long as you complete the purchase of your car before December 31st 2020. There could be further delays in delivery depending on what trade deal is agreed
It’s important to remember that this is all only relevant in the result of a no-deal Brexit. If a trade agreement is met between the UK and EU, then car prices are less likely to increase as much but may still have to be put up slightly by the manufacturers.
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