How Brexit will affect me if I own a car

Theresa May officially fires the starting gun for Britain to quit the European Union on March 29 when Article 50 is invoked. What will then follow is at least two years of intense negotiations that will shape the UK’s place with its nearest neighbours and the wider world.

But how will Brexit affect the UK’s motoring manufacturing industry and its 32 million drivers…

What about prices for cars and fuel?

A recent report by PA Consulting Group says the cost of producing a car here could rise £2,370 with a ‘hard Brexit’, which will be passed on to the consumer. Motoring groups have predicted the price of new and used cars is expected to rise once Britain leaves the EU.

While the value of the £ has an impact on imports/exports, the SMMT believes foreign-built cars could cost £1500 more after Brexit. Trade tariffs, says the SMMT, are likely to mean £2.7bn of levies on cars being imported into Britain and £1.8bn on those being exported. Rupert Pontin, valuation director at Glass’s Guide, warns buyers to expect “a period of instability for new and used car sales”.

As for fuel, it’s already on the way up and both the RAC and AA believe petrol and diesel will rise – again import duties will play a big part. The AA’s “worst case scenario” sees a litre of fuel costing an extra 18.7p, or almost £500 more per year for a two-car family filling up every fortnight.

But I’ll still have plenty of cars to choose from, right?

Well, maybe not such a wide choice, actually. It could be that European-based manufacturers decide building right-hand drive cars for the UK market is just too expensive, given the level of tariffs they might face. The likes of Renault, Fiat, Seat and others could decide to offer British customers a limited range only of their full suite of makes and models.

Will I be hit with higher insurance costs?

Insurance costs are already high – especially for younger drivers – but if you are a woman motorist, your quote could actually come down. This is because the EU ruled in 2012 that gender should play no role in deciding insurance cover for a range of policies, not just motoring. So, despite evidence to suggest women are, in general, safer drivers and less of a risk than men, they are treated the same. With Britain quitting the EU and the prospect of various laws being abandoned or reversed, this area of equality law is one that could change.

And how will Brexit affect my motoring holidays?

Customs and border checks the other side of the Channel may well become tougher for one thing. And what Britons can bring back into the UK, in terms of alcohol and cigarettes, may well be affected. Switzerland and Norway have set their own duty-free allowances, so Britain could do the same.

The Shengen agreement allows for free movement within the EU and motorists should still benefit from this – however, UK citizens might have to get separate visas to visit certain countries and there might be limits on how long you can spend in one country or another.

The current open border between Northern Ireland and Ireland may also return to some form of customs control.

What will happen to the motoring industry?

It’s all in the detail of the deals yet to be struck on trade with Europe post-Brexit. Some 800,000 UK jobs are supported by the industry which built a record 1.72 million vehicles last year, exporting 1.35m of them.

In cities like Sunderland, home to Nissan, it’s a major employer, so much so that there has been talk of a “sweetheart deal” between ministers and car bosses to ensure it stays here post-Brexit. Other brands such as Jaguar Land Rover, Honda and Toyota are all believed to be seeking similar assurances but nothing concrete has yet emerged.

A measure of the uncertainty is shown by investment from abroad into the UK motoring industry which fell by a third last year to £1.66 billion, according to the Society of Motor Manufacturers and Traders. The EU bloc buys half of all cars made here – losing tariff-free access to the market is a “red line for the industry”, says Mike Hawes of the SMMT.