posted 1 week ago

Brexit could further increase the cost of motoring

Concerns raised about the future for independent garages in post Brexit plans

There was a bit of scaremongering going on last week in regard to Brexit, and independent garages. 

You see there’s a little-known regulation set by the EU called Block Exemption, under this sits the ‘Right to Repair’ act. Which basically gives small, independent garages the same access to technical documentation as main dealers.

It’s an anti-monopolistic guideline, to enable a fair and level playing field so we aren’t all bound by main dealers, who could charge whatever they like to fix your motor.

Steve Nash, (the Chief Exec of the Institute of the Motor Industry) became rather alarmist saying that up to 40,000 local businesses may lose access to this important data if the Government don’t secure its EU legacy.

The Daily Mail naturally jumped on the story stating that ‘some 40k independent mechanics could be forced out of business’. More alarmist headlines.

In reality, this isn’t going to happen, but prices have the potential to rise amongst local garages.

When your car is in for repair, most of the money is made through the labour. Some main dealers charge an exorbitant rate when compared to independents. 

On average, franchises charge roughly £99 per hour of work on a vehicle, whilst a local garage is around 43% less at £56. Naturally, this varies by area, London, for example, charges £77.42 whilst a place in Manchester will bill you just £36.

Earlier this year 6,000 garages were surveyed and the rates are already going up. Couple that with the astonishing fact that 62% of car owners don’t shop around for repairs or servicing, the average UK motorist is being taken for a ride.

So how will Brexit affect this?

Well, the whole country is suffering from a skills shortage, this has forced garages to employ migrant labour. Often they are highly skilled and harder working than us Brits. Let’s suppose that a tax is applied to migrant workers in a bid to stop them sending money back home? Or qualified workers are put off by coming to the UK, so mechanic wages go up as the skills drought gets even worse…you can be sure that those costs will be passed on to us, the consumer.

The most obvious impact will be on new and used cars. Currency fluctuations will be the primary problem, earlier this year SMMT forecast an extra £1,500 will be slapped on the price of imported cars. 

It costs manufacturers more to make special right-hand drive vehicles, as most of Europe drive on the left. With us out of the common market, an additional price could well be placed on these models when compared to their European counterparts. Or, we may even be left with a slimmed down model choice in the future.

Next up would be the increase in fuel prices. That mostly varies due to the cost of oil, but the AA have suggested a worst-case scenario of an extra 18.7 pence per litre being added thanks to Brexit. 

Insurance is likely to increase too…if you’re a man that is. In 2012 an EU ruling stated that gender couldn’t be a deciding factor in the cost of your premium. Women have traditionally paid reduced rates, as they are deemed less likely to have an accident. 

To counter that claim, there’s allegedly still an average premium of £170 for being a Y chromosome here in the UK.

Another less thought of issue is the fact that we’re an island, therefore the majority of parts have to be shipped here. That global supply chain, from the raw material to mechanics workbench would undoubtedly see more tax, as the UK seeks to broker trade deals with various countries throughout the world.

The same part manufactured in two different locations could end up with disparate prices, the consumer footing the bill.

It seems scaremongering and fear have been rife throughout Brexit, but one thing’s for sure; there were local independent garages before the EU, and there will be after the EU. But the price we pay as motorists looks set to increase, one way or another.