A rise in interest rates in the future will not adversely affect the booming car sales market, an industry expert has said.
Andy Bruce, the chief executive of car dealer Lookers, which sells nearly 120,000 new and used cars in Britain every year, told Reuters on Wednesday (9 July) that contrary to some fears being circulated, hikes in interest rates would be “inconsequential” to car dealers. With the market returning to record pre-recession highs, he added that he expects car sales figures to continue to increase despite the fact that some say higher interest rates will impact on the attractive finance plans through which many motorists now purchase their cars.
This prediction will likely come as welcome news to motor traders up and down the country. But there are some things that are less difficult to predict – such as accidents, theft, floods or equipment failure – and that is why it is imperative that companies have comprehensive business cover as part of a combined motor trade insurance policy, meaning they are prepared for situations they might not be anticipating.
Despite four fifths of sales being funded on cheap credit, Mr Bruce says: “Every quarter-point movement, if it’s passed on to the customer, is three pounds a month.
“It’s not going to stop somebody buying a car. So even three or four interest rate rises on that basis is not going to fundamentally change the affordability of the car.”
