Brexit would cause “significant uncertainty” for UK used car market
A British exit from the European Union – 'Brexit' for short – would cause significant uncertainty for used car values in the UK, says Glass's, Europe's leading automotive data provider.
If Britain votes to leave in the 23 June referendum, the automotive industry in general and residual values in particular will enter unknown territory, warns Rupert Pontin (pictured), Glass's Head of Valuations.
“That significant uncertainty itself is likely to impact on used car values”, Pontin says. “For example, a major dealer group might write down all their stock in order to be financially prudent in the face of the unknown. This kind of behaviour could, in itself, contribute to something of an economic slowdown, which would compound the effect on values”.
Glass's shares the view of the Bank of England that a Brexit would have a negative effect on investment, household spending and the value of the pound, all of which would reduce demand in the used vehicle sector. “How long it would take the car market to recover, it is difficult to say".
Any positive outcomes of a Brexit are even harder to predict: “The potential benefits would take some time to feed through into the economy. It will almost certainly take several years and there will be some pain in the meantime”, Pontin concludes.