The UK has voted in favour of leaving the European Union and in the past few days the markets have reacted violently, plunging the pound to its lowest level against the US dollar since the mid-1980s.
Nobody’s really sure what the future holds for the UK or for its economy, but the referendum result has gone against the wishes of the vast majority of the British automotive industry according to recent surveys.
But what does Brexit mean for you as an everyday British motorist? From more expensive cars to changes in the law, here’s a quick rundown of how leaving the European Union will affect you in real-world terms.
Buying a new car could get more expensive
Throughout the campaign, experts said that even if the UK left the EU, the prices of new cars shouldn’t rise too much and the used car market will stay largely unaffected by political events.
However, it’s likely that car prices will go up in the short term at least due to speculation from dealer groups. Car dealers need market stability in order to operate successfully, and the current uncertainty over Britain’s Brexit deal may see prices go up in anticipation.
Rupert Pontin, valuation director at automotive valuations company Glass’s Guide, said that as the country is currently venturing into unchartered political and financial territory, motorists should expect a “period of instability for new and used car sales.”
The longer-term effect of Brexit not only on the British car market but on its automotive manufacturing industry remains to be seen, however, and depending on what happens and how expensive import/export tariffs are, cars could get a lot more expensive in the future.
Finance deals could get more expensive
The historic low interest rates consumers have enjoyed in recent years will be hard to maintain thanks to the plummeting value of the pound, which will cause a sharp increase in interest and more expensive monthly car payments.
For motorists who currently have a car on a finance or leasing deal, things are unlikely to change as many of the regulations that bind finance deals in the UK are derived from EU legislation, which will remain applicable until any changes are made, the Financial Conduct Authority says.
As a result, anyone with current car finance won’t experience an increase in costs overnight, but it’s likely that car on finance could become more expensive than before.
Petrol prices will rise in the short term
The price of both petrol and diesel in the UK is expected to sharply spike, with the RAC claiming that it could rise by as much as five per cent in the short term.
However, it’s estimated that the rise won’t last and the RAC expects the market to stabilise itself fairly quickly, but the longer-term effects of Brexit remain to be seen due to the costs of importing fuel into the UK.
Your driving licence is still valid, for now
For British citizens, nothing in regards to either driving licences or passports, both of which currently carry EU flags and emblems, will change and both documents will remain valid.
Both will eventually need a redesign but it’s unlikely that the government will issue a recall for them, and will instead simply phase in new licences and passports when the old ones expire. In other words, you don’t have to do anything except renew them when the time comes as usual.
Motoring laws will also currently stay the same
During the two-year period from when Article 50 of the Treaty on European Union, which officially declares a country’s intent to leave the EU, and when the country actually leaves, all EU laws still apply.
As a result, that means that for now all laws will stay the same and any changes in the law after Britain leaves the European Union are unlikely to appear before mid-2018 at the earliest and will be phased in gradually.
Driving abroad will be more expensive and more of a hassle
Anybody looking to take a driving holiday in Europe could be faced with more hassle than before and potentially higher prices as well. British drivers may need to have their passports stamped at border crossings in the future, and additional customs controls will slow the time it takes to cross the European mainland.
There’ll be no more filling your boot with cheap goods either, because if the limits that apply to countries outside the EU are reimposed, you’ll only be able to carry a litre of spirits, four litres of wine or 16 litres of beer.
Tobacco will be limited to 200 cigarettes and “other goods” will only be permitted up to a value of £390. In addition, fuel prices and motorway tolls abroad will be more expensive due to the current value of sterling, while rental cars will also cost more in pounds sterling.
Insurance may cost less, breakdown cover will stay the same
One of the silver linings for the British motorist will be that car insurance premiums could get cheaper. Currently, all insurance policies have to meet several EU criteria which can be hard for small insurers to do, and a Brexit could make the insurance industry more competitive as a result.
The AA has said that immediate changes are unlikely to be seen however, while some argue that the administration costs necessary to devise new UK-specific insurance standards could see premiums rise slightly.
However, given that breakdown providers typically use local contractors, the cost of breakdown cover and roadside assistance is likely to remain unchanged in Britain. It may, however, get more expensive for mainland Europe so it’s worth checking with your insurer.
This article originally appeared at CarKeys.co.uk