On 31st January Britain formally left the European Union. And while there will now inevitably be several months of discussion in which various government officials attempt to hammer out a series of trade deals with other nations, it’s a safe bet that our dealings with other European countries are going to change as a result. Whether these changes improve or worsen trade positions for us in Britain, of course, remains to be seen – and it’s not my position, nor that of Hagerty, to pass comment upon the political sense of the decision. But there is a motoring angle to Brexit that I reckon will genuinely change the way the roads of Britain are populated, so stick with me.
Buyers of new Mercedes and Porsche models in recent months have seen some strange terms on their purchase orders. Effectively, if the exchange rate between the pound and the Euro is adversely affected by Brexit, both marques have chosen to reserve the right to raise the price of an ordered car between deposit and delivery to offset the loss made through the change in exchange rate. As the pound has fallen, buyers can thus expect now to pay more than they had to before.
This position could worsen if a trade deal hasn’t been set up by the time we leave the transition period at the end of the year. We could, effectively, be dealing with Europe in the same way that we did in the early 1970s – where European goods were priced at a heavy premium, and few if any British people could afford to drive a German car. An entry level 3-series was an expensive car at launch, likewise a mid range Mercedes. And while since the early 2000s, the BMW 3-series has consistently outsold the Ford Mondeo, this position isn’t going to remain tenable if prices rise.
I accept that these days, most new cars are bought on finance. And high purchase prices and desirability translate into a high resale, so finance theoretically shouldn’t be affected too badly. But the resale value may well be affected if rising parts costs for foreign cars affect their secondhand desirability. For finance packages with inclusive servicing, this will mean a greater hit too. The future may have been painted as bright with Brexit, but it won’t be the sober silver-greys we’ve come to expect of the prestige car park.
If Rover had managed to limp on for another decade and a half, Brexit could have proved to be manna from heaven. Why? Because the traditional advantage that the British motor industry had over its continental rivals was one caused by our status as an island nation. An indigenous car industry could undercut anything imported with a trade tariff in place, as the Rover and Triumph 2000s demonstrated when compared to the Fintail and Neue Klasse. The subsumation of the British motor industry into other national entities means that those unable to afford a European car will have two options; buy Japanese or continue to run older cars for a longer time and swallow the parts rises by offsetting them against the depreciation a new car would incur.
Could Brexit in fact end our perception of the motor car as a disposable commodity, by making it more cost effective to keep a car throughout its natural life? It is this disposability which has rendered several cars of the Unexceptional era, from the Renault 21 to the Lada Riva, almost extinct on British roads. If prices rise, inevitably we will keep cars for longer. And as far as the classic car industry goes, that can only be a good thing.