There’s a significant level of change happening within the UK right now. Among those changes was the announcement of the new Prime Minister, Liz Truss, on 6th September.
With that, a number of plans were revealed to help with areas including the cost of living crisis. However, there are calls to do more, especially in sectors that are feeling the squeeze, including the car industry.
It comes as no surprise that increasing costs and prices within the sector have slowed sales of new cars. That’s paired with the impending deadline for electrification and consumers holding back on spending more on expensive electric models.
Slow progression in the market
It’s not all doom and gloom, though. In August, figures from the Society of Motor Manufacturers and Traders saw growth for the first time in seven months. Electric vehicle uptake also increased in the period. However, while this is good news for the industry, it also highlighted a weak performance compared to previous years. Shortages and issues with parts supply are still rocking the sector. This is having a knock-on effect with new car delivery and opportunities to sell.
Calls for more support from the government
The Society of Motor Manufacturers and Traders is calling on the new Prime Minister to help support buyers and businesses that are still struggling with the increasing cost of living problems.
Looking at inflation and crippling energy bills, the post-pandemic recovery is slowing as car manufacturers feel the pressure. As a result, the number plate changes in September often positively impact sales for the year. However, carmakers will be watching this month closely as it’ll provide an insight on things to come as we head towards the latter part of the year.
So, with ongoing challenges in the car sector, how might this affect leasing a vehicle?
Increase in demand for lease cars
With the cost of living crisis making it harder to purchase cars outright, the leasing market has seen an increase in demand for an affordable alternative.
Getting around is vital for many people and having a reliable car is essential. This requirement has seen consumers turn to lease options as a viable way to get the latest vehicles without the huge outlay.
Not surprisingly, electric cars are making up a significant portion of leasing car deals as the switchover begins to take shape.
While leasing options are increasing, the value of leasing deals has dropped slightly throughout the cost of living crisis. This is because consumers are more aware of the monthly expenditure to drive a new car. Recent figures show that the Kia Sportage is a top option for budget-conscious lease cars. Similar models such as the Nissan Qashqai and Hyundai Tucson are also in the top spots.
Another issue facing leasing orders is the delivery of new cars. Much like buying a car outright, some models are taking longer to get to customers due to shortages. This is why some leasing companies are encouraging customers to order early to make the process smoother.
With the calls to the PM to help the sector, leasing companies could also benefit as car deliveries may increase – making more options available alongside better deals.
Cheaper to charge electric cars under PM’s new plans
Recently, there was a lot of talk about how the rising cost of energy could see electric vehicles cost more to charge than petrol and diesel models. While looking at the finer detail, EVs were certainly more fuel efficient, but there was still a case that could hamper electric car sales if the trend continued.
However, Liz Truss’s recent announcement on an ‘energy price guarantee’ could see electric car owners save up to a third on recharging compared to the original price cap.
An example shared by the RAC highlights the average cost of recharging a 64kWh battery at around £22 from 1st October. This is an increase of £4 at the current energy cap price. However, compared to the previously planned cap, you’re saving £11.50.
Calls to keep EV benefit in kind tax low
The uptake of electric vehicles is great for the planet and your wallet, but experts in the industry and concerned about potential changes to the tax benefits of EVs.
