Brexit: Drivers Will See Costs Soar

London’s drivers are used to getting a rough deal – apart from the capital’s dreadful traffic they’ve faced the congestion charge, the announcement of the T-charge, environmental restrictions and now Brexit. The Society of Motor Manufacturers and Traders has now released a report showing that a “Hard Brexit”, or leaving the EU without a deal could increase car repair costs by 10%.

Costs becoming clear

Although the SMMT campaigned to remain in the EU its research was carried out by an independent consultancy. The independent report concludes that if the UK leaves the EU without a trade deal and is forced to revert to World Trade Organisation tariffs, car owners will clearly suffer.

As 75% of our replacement car parts are imported from Europe drivers will have to pay an extra £21 a year on car parts in a “Hard Brexit” or no-deal situation. Customs could add a further £49 a year to that  bill. It doesn’t get much better when considered from the export side. Eight out of 10 cars and car parts that the UK produces are exported and they would face harsh WTO tariffs unless Britain can eventually reach new trade deals. In a worst-case scenario the UK could lose £3bn a year in revenue, with obvious implications for jobs and investors.

The SMMT warned that if the Government doesn’t secure a new beneficial trading relationship with the EU it won’t just be individual drivers that are affected. Fleet services would have to pay an average £777 a year extra for repairs that would filter down to users and customers.

Lord, Won’t You Buy Me…

The news is yet another Brexit hit to motorists. Car prices as a whole are expected to rise once we leave the EU, with an estimated £4.5bn increase in industry costs. The SMMT had warned during the lead-up to the referendum that the cost of European vehicles would likely rise by an average of £1,500.

A commonly ignored issue is the fact that the UK drives on the left-hand side of the road, unlike mainland Europe and countries with major car industries such as the US, China and South Korea.

Manufacturing and engineering cars to suit us is costly. The UK and Ireland are the only countries in Europe to drive on the left and some European models aren’t available to us as a result.

European manufacturers will hopefully still see the benefit in catering to our left-hand market after Brexit – if only for poor Ireland’s sake – but a failure to reach a trade deal may affect their decision. Either way it’s likely our range of cars from giants like Mercedes, Audi, Volkswagen and BMW will shrink.

Fuel to the Fire

Add to all that a rise in fuel prices and motorists may as well give up. Before the referendum the AA was criticised by Brexiteers for suggesting that fuel prices could go up by a whopping 18.7p a litre if we voted out. This “worst case scenario” was based on the value of the pound and oil prices and was undoubtedly an extreme prediction but it didn’t factor in the possibility we may also leave the EU without a trade deal.

There is a potential bright spot on an otherwise cloudy horizon and surprisingly it’s for women. One of those pesky European laws that Brexiteers are so excited to repeal stops insurers changing their quotes based on gender.

Women are lower risk drivers so they had traditionally benefitted from cheaper policies while men had to pay more. That changed five years ago but could now make a comeback Britian does roll back such EU rules.

Silver linings, eh ladies?

 

by Jo Davey

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