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Britain Under the Bonnet

Gearing up for a changing market.

Britain Under the Bonnet

What is Britain Under the Bonnet?

We're taking another look at our changing market, giving consideration to how the changes are likely to affect you, our dealer partners, your customers and our industry as a whole. This year's report is broken down into five sections:

  1. How has Brexit affected consumer confidence?
  2. The politics of motors
  3. Shifting consumer trends
  4. View from the forecourt
  5. The way forward

Don't have time to read the full Britain Under the Bonnet report?

We’ve created a handy branching video that lets you watch the sections you’re most interested in, and skip over the ones you aren’t. So, if you’ve only got a couple of minutes spare and want to find out about the impact of Brexit and the report conclusions, you can just watch those sections. 

Press play now to get started and choose what you want to watch.

Face to face service with our local branch network

How has Brexit affected customer confidence?

Brexit has dampened consumer confidence in the market. With many drivers who plan to buy a new car in the next three years saying they will opt for used and cheaper models.

The new car market has seen a substantial dip that looks likely to continue throughout 2018, with the used car industry likely to benefit as a result. This presents a great opportunity for used car dealers, especially when partnered with a motor finance provider to support the sale of used cars. 

100% of all new cars to be electric by 2040

Diesel's decline and electric's escalation

2017 saw the continued decline of diesel-powered cars' fortunes. The significant dip in sales is likely to continue with the announcement of a tax hike coming into force in April 2018 for all diesel cars which do not meet the current Euro 6 emissions standards. 

Meanwhile, the Ultra Low Emissions Vehicle (ULEV) sector continued its run of impressive sales growth, reflected in an increase in market share. The sector received a huge policy boost from the UK government, which said all new cars must be electric 2040.

However, there are considerable challenges ahead in the bid to electrify the UK car industry. 

Consumer buying habits

Shifting consumer trends

The internet became the most-used resource for researching car purchases, eclipsing dealerships for the first time. However, dealers are still increasingly used and valued as a resource prior to buying, and this is unlikely to change in the near future. 

The uncertain economic climate is unlikely to materially change how consumers fund their next motor purchase, in fact motor finance figures continue to rise.

View from the forecourt - the dealer perspective

We spoke to four of our dealer partners to get their views.

The way forward

Key take-outs for dealers:

HP and Conditional Sale

There is likely to be an increase in customers looking at cheaper models of cars, and a shift from new vehicles to second-hand cars.

Maximum age of 10 years

How consumers are going to pay for their vehicles doesn’t look like it’s changing, so it is essential that dealers work with a finance partner who can give them a range of product options and be flexible with their underwriting approach.

Minimum advance of £1000

Drivers still look to dealers for advice and support, so dealers need to be prepared for this and ensure staff are best-equipped to deliver genuine insight and advice.

LTV up to 120%

Dealers will have to tackle consumer biases against diesel-powered vehicles by incentivising customers to purchase their diesel stock.

Mileage – up to 130,000

Electric cars will continue to receive a significant push in the mainstream media, so dealers will need to be on hand to answer questions and concerns from customers.

Weight – up to 3.5t

It’s important for dealers to work with partners that can keep an eye on market trends and use these to help dealers grow their bottom line.

Supporting your compliance

Report methodology 

The figures in this report are based on Close Brothers Motor Finance’s own data, a telephone survey of over 200 UK car dealers undertaken between November and December 2017, and a consumer survey of over 2000 UK drivers, weighted to be nationally representative. The survey was conducted in December 2017 by Watermelon. All statistics in the report, unless stated otherwise, are taken from the aforementioned sources.