UK Car Buyers May Have To Spend More On Cars Because Of Brexit

Government

Sorry UK, get ready for price-increasing tariffs.

When the UK decided to leave the European Union, there was a chance that Brexit would have adverse affects on the country's car industry. According to analysis conducted by Society of Motor Manufacturers and Traders, the Brexit decision could increase car prices in the UK by as much as £1,500 pounds (€1,762 euros or $1,868). In addition to the many other Brexit-related costs, the tariffs on cars alone could raise the cost of imported vehicles by £2.7 billion ($3.37 billion) per year.

Exports from the UK could also see an increase of around £1.8 billion ($2.25 billion) per year in added expenses. If the automakers can't absorb this cost, it will be passed on to the consumer. These estimates are based on a 10 percent import duty which is standard according to a World Trade Organization rule. The UK could get a more favorable deal if it can be negotiated with the EU. Unfortunately, the UK can't keep its single market access without retaining free movement of labor. The UK car industry has just set records for exports and production volumes mainly because of multi-billion pound investments that were made long before the vote to leave the EU.

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The UK could be facing some difficult times if it's unable to negotiate favorable trade deals. The US feels the UK's pain as it faces the possibility of increased car prices with certain proposed policies voiced by president-elect Donald Trump. We will have to wait and see how Brexit impacts car prices, but the predictions don't seem so good.

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