Peter Vosper: Used car finance interest charges to rise in August

Following the increase in the Bank base rate interest charges will rise on Used Car Finance purchases in August.

However, there will be some retailers who will absorb the interest to keep used car sales performing well with the continuing lack of new car stock available, other than electric vehicles where the manufacturers need to meet government targets.
As new car prices have risen since the pandemic used cars have been in demand and stocks of many popular models are improving from a low base.

The Motability Scheme which had been put on hold and customers had extended their current agreements is now back on track and this has produced some low mileage, well maintained cars as the new cars arrived. These are generally between three and four years old and cover a range of styles and size providing some much-needed stock for dealers to satisfy their customers. Electric cars continue to be purchased by business users and fleets where the charging infrastructure is available and tax incentives remain on offer.

There are also hopes the new car manufacturers will produce some specific offers to keep demand increasing towards 2019 sales numbers, as the new 73 registration plate arrives on the September 1.

In order to encourage vehicle sales and help cut inflation, the reduction in energy prices expected is important and the energy secretary, Grant Shapps, has encouraged bosses from the large supermarkets and other major fuel retailers to agree to the voluntary Competition and Market Authority (CMA) scheme to share live fuel prices, in order to improve transparency and increase competition.

Retailers are being asked to share up-to-date fuel prices voluntarily before a new law is introduced to force companies to publish live data. Drivers will be able to compare live prices online to find cheaper fuel.

Campaign group FairFuelUK said “the jury was still out” on the scheme’s effectiveness.

Petrol and diesel prices had reached record highs following Russia’s invasion of Ukraine, but have since dropped significantly. However, after investigation by the CMA earlier in the year following concerns falling wholesale prices were not being passed on to the consumer, the CMA concluded that drivers paid an extra 6p per litre due to weak competition.

The RAC fuel spokesman said “..the RAC fears without the consequence in the form of fines, the biggest retailers are unlikely to lower their prices quickly enough when the wholesale market trends down.”

With more strikes due from the railways the car will be even more important to not only local drivers but to the Westcountry economy as the school holidays starting now are expected to bring even more holiday makers to the area. This has been heightened by the extreme temperatures in large parts of Europe and recommendations from some countries to take special precautions, including staying indoors.

For those of you going on holiday take care and have a good break.