You’re probably not loosing any sleep over the particularities of the UK car market. Surely, that’s for the better – when it comes to buying a car, there are more urgent and important things to worry about. At the same time, it can’t help to stay up to date on the latest developments. It may even help you save money on your next vehicle.
After all, the development of the UK car market as a whole is closely related to your car finance options and the price you’ll eventually have to pay. Which is why we’ve put together a few key facts to give you a better impression of where the car market is at today – and where it might be headed.
UK car market: Going strong
One of the most remarkable feats about the growth of the UK car market must surely be how long it has continued. Even at a time when many of the other major European economies were shrinking, sales of cars in the UK have stubbornly remained on the rise. And as soon as the economic troubles, which put the entire European Union into recession, showed first signs of abating, consumers went right back to where they left off: As the Guardian reported, car sales hit the 2m mark for the first time in October, further extending the breathtaking period of uninterrupted growth to a staggering 32 months.
But … is it healthy?
Unfortunately, what may sound like good news might instead be reason for worry. As online magazine Automotive News Europe reported, there were various reasons why this upward curve for the UK car market is clouded by dark developments underneath the surface. The growth, it claimed, was mainly driven by the following trends:
- Cheap finance: With the Bank of England continuing its low interest rate policy, saving remains financially unattractive to many UK households. Buying a car now, when it is still cheap, simply sounds like the reasonable thing to do. This only applies, however, if you’re able to secure a long-term fixed interest rate loan. If you don’t and there is a considerable deferred sum waiting for you at the end of the term, you may face a rude awakening in a few years’ time.
- Fierce competition: Partly owing to the unstable economic conditions, dealers have started undercutting each other, offering deals that may even end up costing them money. As a result, although the UK car market continues to grow, some of these offers are shady to say the least, with less favourable terms hidden in the small print.
What does all of this imply for the future of the UK car market? It certainly means that you should be more aware of the pitfalls of a car purchase and should always make sure to keep your finances in order. With so many growth factors relying on short-term developments, the hype may be over sooner than expected.
This only makes finding suitable car finance all the more urgent, especially if you’ve had to face financial hardships in the past. Make sure to ask your dealer about all the details of your financing – the time you invest now in order to get things right may end up saving you a lot of trouble later on.