With the current pandemic we haven’t seen as much of Brexit in the news as you might have expected considering it’s now just 55 days until the transition period ends and the UK is officially no longer part of the EU.
The official end of the transition period, which we are currently in, is as most people will be ringing in the new year at 12am on the 1st of January 2021.
Even though there’s less than two months until this momentous event the UK and EU have yet to reach a trade deal. But what does this really mean if you’re looking at a new car? Or even for your current car? We’ve taken a look at how Brexit could impact your vehicle.
Getting a New Vehicle:
Whether you are looking to buy or lease, if you’re looking for a new vehicle then there are typically two status’ that it will be at - a factory order or an in-stock vehicle.
Vehicles are classed as in stock when they are physically at the dealership, or sometimes when they are in transport to the dealer and expected to arrive and be delivered onto you within four weeks.
A factory order vehicle typically has a longer lead time because it has to be added to the queue to be built, then transported to the UK before it can be assigned a registration and then delivered onto the customer.
This post is going to focus on the factory order side of new vehicle orders, as in-stock vehicles are usually already in the country or expected to arrive shortly and therefore will not be impacted by Brexit on the 1st of January 2021.
No deal has been reached between the UK and EU yet, which means there’s still a lot of uncertainty about what will happen come the new year. Both sides are currently in negotiations and working to try and reach a deal. If one is reached we will update this post and you with any impact this could have on a new vehicle for you.
If the UK leaves the EU without a deal then this means that the World Trade Organisation (WTO) tariffs would be applied to imports coming into the UK. For the automotive industry, this means that there would be a 10% tariff for new vehicles coming into the country.
With so much uncertainty on a governmental level, it’s unsurprising that car manufacturers and lease funders have been reluctant to commit publicly to plans for Brexit. This is in part because they don’t know what kind of tariffs will be applied come the 1st of January.
If we do leave the EU without a deal, and the 10% tariffs are applied to imported vehicles it is not yet clear whether the cost of these will be passed onto the customer, through increased purchase or monthly lease prices. As soon as we get any clarity on this, we will update you.
As well as hitting the cost a no-deal Brexit could see the lead time on your factory order vehicle become slightly longer if additional checks are needed at ports of exit in the EU or ports of entry in the UK. It is unlikely that this will have a massive impact on the lead time, however when we are seeing the long-term impact of Covid-19 causing delays already any further delay feels like an additional penalty.
Maintenance and Servicing:
It’s not just new cars that will be impacted. If you currently own or lease a vehicle, without a maintenance package, and you need to get a part replaced chances are this will be imported into the country.
Tariffs will also be applied to these imported parts, though the level of these vary depending on the type of part you require, and whether the UK and the EU reach a deal or not.
You can see the current tariff rates on the government’s website provided you have a commodity code or description of the item.
Travelling with Your Current Vehicle:
We’ve got a whole guide on what you need to do if you want to travel with a lease vehicle, and suggest reading this before travelling as it contains important advice on documents you will need to travel with and the time it can take to receive these.
As well as these documents you are likely going to need a green card from your insurance provided to travel in the EU post-Brexit. As negotiations are still ongoing it is not definite that you will need this, but if you are planning to travel in the EU with your current vehicle in the new year we recommend getting one.
A green card is an international certificate of insurance, which needs to be printed off as a physical document.
You can obtain one by contacting your insurance provider, who will be able to issue one for you. Please be aware it will only cover you for driving the vehicle your insurer covers, if you are planning to drive a hire vehicle you would need to seek alternative cover.
Like many other companies across the UK, Xcite Car Leasing are monitoring the Brexit negotiations and updates we get from the government to see how this will affect us and our customers. We are working closely with all our dealers and lease funders to get updates regularly on their plans and how these could impact you.
As soon as we have any update we will let you know. If you do have any questions in the meantime then you can contact our team on 0330 221 0000
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