Massive uplift in Welsh drivers choosing second-hand over new for next car, as Brexit uncertainty bites

• Proportion of drivers in Wales planning to buy a second-hand car rises from 43% to 54% in a year, while the proportion planning purchase a brand-new car drops to 31%.
• 46% of Welsh drivers say Brexit has impacted their decision to purchase a new car in the next three years
• 50% of dealers see Brexit as a threat – doubled in 6 months
• Despite this, confidence remains high amongst the vast majority of dealers

Brexit, a global slowdown, and confusion over fuel type has caused a huge decline in the proportion of drivers in Wales whom plan to buy a brand-new vehicle since last year, while the number planning to buy a second-hand vehicle has risen. The latest research from Close Brothers Motor Finance found one in every 10 drivers in the region are now considering a second-hand car as a result of economic uncertainty. 54% of drivers said they would opt for a used car next – up from 43% a year ago; while 31% were considering a new car – down from 35% last year.

The Britain Under the Bonnet report looks at consumers’ attitudes and car buying behaviours – along with views from dealerships across the country – to give a comprehensive view of the UK’s motor industry in 2019.

Brexit was a key factor that had dampened consumers’ appetite. 46% of drivers said Brexit had had a negative impact on their plans to buy a car in the next three years, while 39% of these drivers saying they were more likely to buy a used car or delay buying a car as a consequence of Brexit. Unsurprisingly then, the report found that Brexit was now seen as a threat for half of car dealers, double that of six months previously (26%).

Uncertainty around fuel type was another factor impacting decision-making this year. 19% of drivers in Wales said they were put off buying a car in 2019 because of their confusion about fuel type. Almost one in four diesel drivers (24%) said they were put off because they were unclear about what the costs will be to own a diesel car in the future.

Despite the challenges, when surveying dealers about the year ahead the vast majority (93%) said they remained confident about business prospects. Two thirds of dealers (68%) could point to specific opportunities for their business in the months ahead. For nearly a quarter (24%), maintaining the stability of the business was the reason to be confident about the immediate future. One in five (19%) said they had experienced an increased demand for particular models (up from 6% the previous quarter).

Just 4% of dealers said they had concerns about an economic downturn (down from 14% six months previously), suggesting a positive outlook for the future beyond Brexit.

Rebecca McNeil, Chief Executive Officer at Close Brothers Motor Finance commented: “The motor industry is a cornerstone of the British economy, and in these unprecedented economic times it is no surprise to see the industry experiencing a number of challenges. All eyes are on Westminster as we wait in hope of a satisfactory resolution to the ongoing uncertainty.

“However, out of this period of change, rather than just treading water, a huge proportion of dealers are spotting opportunities and capitalising on them. We’re seeing a number of dealers responding to the increased demand for used vehicles, while others are embracing the trends towards alternative fuel vehicles. Overall, the vast majority of dealers feel confident, and can see the possibilities that exist beyond Brexit.

“In uncertain times and with a high pace of change in technology, consumers are looking now more than ever to speak to experienced professionals on the forecourt.  For our dealers, staying on top of the latest trends and developments will be key to attracting and retaining customers.”