Brexit is driving down second-hand car values by €2,000
Published 25/11/2016 | 02:30
Brexit has knocked up to €2,000 off the price of an average second-hand car, a motoring chief has warned.
That means it will cost more to trade in your current car against a new model for 2017.
Ciarán McMahon, chairman and managing director of Ford Ireland, is the first senior motoring figure to publicly highlight how the aftermath of Brexit is hitting Irish drivers in the pocket.
He told the Irish Independent it was "inevitable" that people planning on changing to a 2017 model would have to pay more if they had a trade-in.
That is because used-car values have fallen in the face of a glut of used UK imports following sterling's plunge in the wake of Brexit.
That has widened the gap between new and secondhand vehicles - even though new car prices are technically a little lower than they were last year.
As a result of the surge in imports, Irish dealers are now being forced to offer lower prices for trade-ins against 171-reg models because of widespread uncertainty about what used cars will be worth on the market in the new year.
Mr McMahon explained that dealers had to cover themselves or face the prospect of being stuck with expensive trade-in stock that they can't shift - or had to sell at a loss.
"Overall, I would estimate that the cost of changing to a new car has risen by €1,500 to €2,000 for the average owner of a three-to four-year-old vehicle," he said.
Mr McMahon added that the increase could, in some cases, add €15 to €20-a-month to PCP repayments.
But the real effect, he warned, would be felt by those borrowing from their credit union or bank.
"They may have to ask for €10,000 rather than €8,000 towards their next new car," he said. "And that is where it will be felt."
The surge in used UK imports since sterling plunged after Brexit has accelerated over the past few months.
Official figures show nearly 65,000 imports have been registered in 2016 so far - an increase of 20,000 on the corresponding period for 2015.
TransferMate Global Payments, a currency exchange specialist based in Kilkenny, recently reported it had been dealing with an influx of activity in the car import market since the vote on June 23.
Even though consumers have to pay VRT on a UK import, they can still make real savings.
But despite the effects of Brexit and the uncertainty it is creating, Mr McMahon said orders and bookings for new vehicles generally were "good but not as strong as last year".
He forecast that around 147,000 new cars would be registered in 2017 - much the same as the total for this year.
Mr McMahon was speaking at the launch in London of the new Ford KA+.