August 6, 2020

Effects of Brexit over car financing and UK’s economy

Car buyers are very likely to look for even more flexibility within their car finance agreements in the face of a hard Brexit. The car finance sector is likely to be affected deeply by Britain’s decision of ceasing to be a part of the EU.

Effects of Brexit over car financing and UK’s economy

Car buyers’ spending plans have been influenced by the risk of recession. Failing consumer confidence is now evident.

Moreover, several economic experts have the opinion that in the short or medium term, no positive transformations for the situation are visible. A hard Brexit is sure to render many effects over the British economy. Even the best among them would be the kind that Britain would have to be wary of.

The effects would not only be evident over car financing but instead the overall aspect of the used-car market. The tightening of the underwriting rules is likely if we go by the historical precedents. But this comes at a time wherein car retailers are on a lookout for some additional flexibility.

It is not just that car financing that comes under Brexit’s impact, but a no-deal Brexit renders a significant impact on car manufacturer’s operations as well. This is very likely to come in the form of delays in the production, which would stand in the line of £50,000 per minute across the sector.

The Society of Motor Manufacturers and Traders (SMMT) have come up with the 2019 UK Automotive Trade Report. It has expressed that as borderless trade comes to a halt, it would lay implications over a just-in-time operating model that is used across the country. The losses may be as high as £70 million per day in the worst-case scenario.

The UK government has previously been warned that a no-deal Brexit also puts several jobs at risk, which are created by …

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