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How Will Brexit Effect The Cost of Your Fleet Cars?

According to a recent poll, 64.1 per cent of UK business owners expect Brexit to increase the business costs of running a fleet of cars.

Although nobody can be 100% certain how Brexit will affect the cost of owning a fleet in Britain, the early warning signs indicate the decision to leave the EU is going to cost the UK economy heavily.

According to Dataforce, the fleet market is already in decline following the Governments new wave of vehicle taxes implemented on 1 April 2018. Brexit is expected to pile even more costs of owning vehicles outright on to businesses.

How will your company be able to manage a fleet of cars by the time the March 29 deadline comes around next year? These are the pitfalls:

Cost and Availability of Vehicles and Parts

Fleets are more reliant on high-tech parts and devices and many of these parts have to be imported from mainland Europe. The pound has already lost value against the Euro, so parts and vehicles are already more expensive. And things could get worse.

When Britain leaves the EU, we will probably lose the right of free movement of trade. Subsequently, British companies will have to pay trade tariffs on imports which push up the cost of parts, repairs and servicing.

Labour Shortage

Teresa May has already said EU-workers will need a work permit in order to stay in the UK, and only for jobs that pay at least £30,000 a year. The impending migration of EU workers leaving the UK will inevitably leave a labour shortage. This will have a significant impact on the finances of businesses.

First of all, UK companies will find it more difficult to recruit foreign workers and those that do will have to pay more in salaries. That will mean the costs for repairs and servicing go up as well.

There will also be an interim period where there will be a shortage of mechanics available to carry out repairs. The delays will mean small business fleets lose revenue whilst their car is off the road.

No Brexit Deal

A no Brexit deal will also cause complications for UK fleets. If a deal cannot be reached with EU negotiators, the UK will revert to World Trade Organisation rules whereby tariffs would be enforced.

Should this be the case, the cost of living in Britain will increase due to a rise in general inflation. The knock-on effect will be that fuel prices go up, together with the cost of buying and maintaining vehicles.

Brexit could cause major problems for fleets, and UK companies risk losing a significant amount of revenue once Britain pulls out of the EU. The best way to avoid increased costs and the hassle that comes with it is to lease a fleet of hire cars.

For more information and top tips for managing a fleet of cars Contact Toomey 

or download our Free Quick Fleet Guide


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