UK car prices ‘not expected to waver’

UK car prices ‘not expected to waver’
Fierce competition on the forecourt should keep British car prices steady – despite the recent dive in the value of the pound.

That is the view of Britain’s largest car dealer, Pendragon, which said: “We do not anticipate any material effect on new vehicle policy as a result of exchange rates.”

Nor have there yet been any wider effects from the June 23 vote to leave the European Union.

Chief executive Trevor Finn said: “Despite significant commentary on the potential negative impact of the EU referendum, we have not experienced any noticeable change in our customers’ behaviour and we have continued to grow our business.”

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Pendragon was making a statement to the Stock Exchange about both the general outlook and also trading in the third quarter of this year.

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Shares in Britain’s motor dealers have been hit by the Brexit vote because of fears that uncertainty will cause consumers to batten down the hatches.

They have also been affected by suggestions that prices will have to rise in the wake of sterling’s fall from just below $1.50 on the eve of the vote to about $1.22 today, pushing up the cost of imported goods.

Pendragon has until now proved no exception to this downbeat trend. The company behind Stratstone and Evans Halshaw retail, said its share price has been down nearly half on its peaks at the turn of the year and remains off nearly a third from its pre-referendum price.

But fighting talk from Mr Finn has bolstered the stock – shares were up this morning by 0.63p, or 2.21%, at 29.13p.

Mr Finn added that about 90 per cent of car owners were effectively renting their vehicles on monthly personal contract purchase schemes. Most were locked in and, even if manufacturers wanted to push through rises in monthly payments, competition and the recent cut in interest rates meant that forecourt price tags were staying where they were.

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Pendragon reported a 5.7 per cent growth in like-for-sales with underlying profits coming in 6.3 per cent better for the July to end-October trading period.

Support for the idea that, post-referendum, car sales are holding up came in the latest figures from the Society of Motor Manufacturers and Traders, which showed a 1.6 per cent rise in new-car registrations in September compared with the same month last year. But all the growth was in fleet sales, with private and business sales declining.

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