what will brexit mean for the uk car industry & car buyers?


Following a vote of no confidence in the prime ministers proposed Brexit plans, the UK Government battles on to determine what kind of deal (or no-deal) we will be leaving the EU with on 29th March 2019. One of the major industries that will be affected in one way or another by Brexit is the UK car industry. Read on to find out what Britain’s departure from the EU could mean for car manufacturers and motorists in the UK.

Car Manufacturers

The UK automotive industry currently employs roughly 800,000 people. With major manufacturing plants for Toyota, Nissan, Mini, Land Rover, Honda and Jaguar based in the UK, a no deal departure could see huge numbers of job losses if these manufacturers decide to move onto the continent to avoid disruptions to the import of supplies after March 29th. Since June 2016, investment in the automotive sector has dropped by almost a third as a result of uncertainties about leaving the Single Market.

A no-deal Brexit also has the potential to cause a major blow to the electric vehicle market. The incentives for car manufacturers to push sales of their electric vehicles in the UK could be hugely undermined by the announcement that electric cars sold within the UK will no longer count towards manufacturers EU Co2 targets, giving carmakers little reason to sell their cars in the UK. As a result, the Government pledge to phase out petrol and diesel vehicle sales by 2040 is likely to be compromised by this.

Car Prices

One of the main concerns of car buyers is whether the price of cars will increase. The likely answer to this is that they will although we can only estimate by how much. The Society of Motor Manufacturers and Traders (SMMT) has proposed that EU tariffs on cars could add around £2.7billion to imports and £1.8 billion to exports each year. Subsequently, import tariffs alone could increase the list price of cars imported from Europe to the UK by £1500 on average, which is bad news for car buyers.

Additionally, the falling value of the British pound as a result of Brexit has meant that a lot of car manufacturers have had to put restrictions on the incentives they can offer to customers. This includes discounts on brand new cars, which has been compounded by the new WLTP (worldwide light harmonised light vehicle) fuel economy regulations that stalled the production of some models in the last six months of 2018.

Fuel prices

A rise in the price of crude oil coupled with the depreciation of the pound is likely to result in a noticeable increase in petrol prices. If we leave the EU in March having failed to agree on the terms of our exit, an expected drop in the value of the pound could see fuel prices going up by as much as 20%. This could mean that the average cost of a full tank of petrol goes up to record price of £70 later in the year.

Car Finance

Car finance is another area of the car industry that faces some uncertainty. The likelihood is that it will be affected as a resulting consequence of manufacturers moving their factories to other EU states following our departure. Companies who lend large amounts of money depend on the wholesale markets to sustain themselves and if the UK motoring market is threatened by major moves to France or Germany, then it is possible that the cost of borrowing will go up. Many are speculating that this could make it harder to obtain car finance in the future, although nothing is certain at the moment.


Car insurance premiums are currently at their record high, which can again be put down to the instability of the pound during these times of political unrest. In terms of the legalities of car insurance policies, it is unlikely that there will be any significant changes if any just yet.

Driving abroad

Under current EU legislation, a valid UK driving license permits drivers to drive abroad throughout the EU without requiring additional documentation. However, in the event of a no-deal, driving licenses may become invalid without the purchase of an International Driving Permit (IDP) through the Post Office. If you plan to hire a car abroad, you may still need to purchase an IDP. In addition, motorists planning to hire or take their own vehicle abroad after 29th March must also carry a Green Card, which proves that they are covered by third party insurance within the EU, EEA, Andorra, Serbia and Switzerland. Anyone who drives in the EU without a Green Card could be breaking the law.

Additional complications could include longer waiting times at borders whilst British drivers get their passports stamped as well as extra customs controls.


Whilst it may seem like doom and gloom for the UK automotive industry and its customers, it’s important to remember that nothing is certain yet. With the terms of our exit from the EU still hanging in the balance, it remains to be seen what will happen across many industries, including the car industry.

This being said, if you are thinking of buying a new car anytime soon, it may be a good idea to do so before March 29th. With the sales of cars in the UK at a low in 2018, and the increasing likelihood of a no deal Brexit approaching, many car dealers are eager to get rid of their stock as soon as they can, making now a prime time to get a good deal on a new car.


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