The online-only retailer saw its fastest ever rise in visitor traffic in the immediate aftermath of the June 23 EU referendum, while the first Monday after the UK’s vote to leave was a record day for car sales through the platform.
The company says for the first time this year there were more quotations saved for new car purchases than for used models on the site, noting that a peak in new car interest is unusual at this point in the year. It also reports a wave of cash purchases for both new and used cars, with a higher proportion of cash purchases in the three weeks following June 23 than during the two or three months before the referendum.
There has been no let-up since, with the number of visitors saving new car quotes remaining higher than at any point in the motor retail platform’s history.
For used cars the company has also seen a higher conversion ratio between saved purchase quotations and actual sales for each car searched on the site since the referendum.
Austin Collins, co-founder and managing director of buyacar.co.uk, said: “We believe headlines about the immediate economic impact of the Brexit vote, particularly the weakening value of sterling, are key to some of this increased sales activity.
“People are being warned that many things are likely to become more expensive, including the prices of new cars.
“At the same time people are seeing the value of their savings reducing and hearing that even further interest rate reductions are on the cards. It seems feasible that some people believe it makes sense to buy now.”
Collins also points out that EU citizens living in the UK are likely to feel very cautious about entering three or four-year finance agreements at present because of the uncertainty about their status in the future, and suggests this could account for some of the increase in cash transactions.
“It’s too early to know whether traditional dealers are sharing our experience of the post-Brexit market but we believe consumers may be deciding to beat further weakening of their spending power by buying now instead of waiting for more potentially bad economic news,” Collins predicted.
Used car revival
However Startline Motor Finance argues that the economic conditions already resulting from Brexit – especially the weaker pound and higher cost of capital – will make it very difficult for motor manufacturers to continue offering the levels of support that have kept the new car sales so high in recent years.
CEO Paul Burgess, explained: "In terms of the overall car market, we believe that it is new vehicle sales that are most at the mercy of Brexit trading conditions.
"Manufacturers bringing cars into the UK are having to face increasingly unfavourable exchange rates that will eat away at their margins while, at the same time, finding that borrowing money to put behind their product is becoming more expensive.
"Bearing this in mind, we don't see how they can continue to offer the kind of headline deals that have kept the new car market on the boil. Something has to give.”
Startline Motor Finance is predicting a shift towards the used car sector, creating trading conditions similar to those seen after the economic crisis of 2007-08. This view is based in part on analysis of changing trends in user car pricing models.
Burgess explained: "One of the characteristics of the car market in recent years has been that used vehicle undersupply coupled with strong new car deals made the differential between new and used very close. Many customers concluded that they may as well buy new because the savings from used were negligible or even non-existent.
"What we expect to happen in the short-medium term is a sensible realignment of the used car sector where differentials between new and used are restored, and this will benefit the latter at a time when consumer confidence will undoubtedly be falling.”
Burgess says the trend towards lower used car prices will mean that consumers will look again at this sector of the market, which will mean dealers offering different types of financing.
"Our advice to dealers from a motor finance point of view is to ensure that they have a lender panel in place that can handle these new market conditions efficiently and flexibly. There is a good chance that your current arrangements won't fit the post-Brexit world," he said.