Will the cost of a new car go up after Brexit?

Buying a car after Brexit will be different depending on if the UK leaves the EU without a trade deal. Here's what we know so far.

Megan Roberts (Marketing Executive)

By Megan Roberts

Updated on Jan 5th, 2021

You may have seen in the press recently talks of car prices being increased after we leave the EU on the 31st of December. We know it can all be pretty confusing – not just what driving in the EU will be like after Brexit, but also, what it’ll be like to buy a car. To help, we’re here going over what it means and hopefully make it a bit clearer. We’ll also discuss what it could mean if you’re looking to buy a new car and when may be the best time to do so.

Why will the price of cars increase?

If we leave the EU on the 31st of December without securing a deal (or a sufficient free trade agreement), car prices will be increasing as the UK will be subject to additional manufacturing and import costs – basically, it means they’ll be more expensive to source and get into the UK for you to drive, and therefore will cost more for you to buy.

What does this mean for car buyers?

Manufacturers including Ford, Peugeot, Citroen and Vauxhall have confirmed that the prices of their car will rise in the event of a no-deal Brexit and other manufactures including Audi, Volkswagen, SEAT and Skoda have said a no-deal Brexit will lead them to review the prices of their cars. There are some manufacturers that have said they’ll be honouring the price of the cars bought before the end of 31st December, even if it’s set to be delivered after the end of the transition period. It all just depends on the manufacturer of the car and what they decide to do once we leave the EU and if we leave with a deal or not. 

When will we know for sure?

Remember that this is all circumstantial – it will depend on what happens when we officially leave the EU. Negotiations are still ongoing and there is no set date of when this will be decided, however, if a deal is not made before the 31st December then the tariff will come into force.

How much more will cars cost?

At the moment, cars imported from the EU to the UK don’t pay any tariffs because it’s following the EU trade rules. This is of course until the 31st of December when, if the UK leaves without a deal, these tariffs may be charged. If that’s the case, then in line with the World Trade Organization (WTO) – a 10% tariff will apply to cars imported from the EU. If the manufacturer decides to charge the full 10%, it would lead to an additional 6.3% on the cost of the car for you (this is because of how the tariffs are levied on the customs price of the vehicle).

Model Purchase Price Price with WTO tariff applied Price increase
Fiat 500 Lounge £14,500 £15,442.50 £942.50
Ford Fiesta Trend £16,140 £17,189.10 £1,049.10
Vauxhall Corsa SE £16,440 £17,508.60 £1,068.60
Ford Focus Zetec £22,210 £23,653.65 £1,443.65
Volkswagen Golf 8 Life £23,300 £24,814.59 £1,514.50
The purchase price is the latest on-the-road price of the entry level models for each car, provided on the manufacturer’s website. Correct as of November 17th 2020

How can I avoid paying the tariff?

If you’re looking to beat the potential price rise on a new car, there are some cars in stock in the UK that you can buy before the 31st of December to avoid that charge. Also as mentioned above, there are some manufacturers that will honour the price of the car as long as you order it before the end of the year – even if the delivery of the car isn’t until 2021. We’ve pulled together a handy list of the different cars you can get before any price changes may occur that are already in the UK – of course be aware that these may sell out, and it will depend on the manufacturers decision of your desired car as to whether you will have to pay the additional cost for the car you would like, depending on when it is ordered and when it arrives in the UK. 

What are the best deals to get on cars?

To get ahead of the changes, here at Marmalade we want to try and ensure as many of you as possible can get your hands on the cars you love, before any price increase. As such, we’ve taken a look at our best sellers and ordered as many as possible of the below, which will remain at the same cost up until 1st March 2021, regardless of whether the manufacturer increases their prices at the end of the year. We cannot guarantee how long these cars will stick around at their current price, so if you’re in the market for a new car, now may be the best time to start looking. 

If you want to know what other cars are available now, you can give our dedicated car team a call on 0333 358 3441 and they’ll go through the options with you. Otherwise we’d say now is a good time to get your hands on a new car, before the price is likely to change. Keep an eye on the news of your desired car make and you’ll be able to see what decision is made on the car tariff prices.

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Megan Roberts (Marketing Executive)

By Megan Roberts

Hi, I'm Megan - I have recently graduated from university and I'm a marketing executive at Marmalade! I am a new driver myself and would love to share my tips, tricks and experiences with you :)

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