Irish car buyers are benefiting from the weak pound, with spending on UK car imports up 14 percent on last year and 66 percent on its pre-Brexit referendum level. That’s according to foreign exchange specialist Fexco Corporate Payments.
The analysis of 3,000 transactions comes days after the euro hit 89.5p against the pound – its highest level for almost eight months. Fexco also recorded a 49 percent increase in the number of cross-border car purchases between the first half of 2016 and the first half of 2018.
Although UK new car registrations are down in recent months, a previous boom period means there’s a bountiful supply of used cars for Irish motorists and dealers to choose from.
The Fexco data mirrors statistics compiled by the Society of the Irish Motor Industry (SIMI), which shows 49,971 used cars imported from the UK in the first half of 2018 – a 12 percent increase on the same period in 2017.
The SIMI data would suggest that Ireland is on course to import 100,000 used cars from the UK for the first time ever.
Buyers ‘capitalising on the weak pound’
David Lamb, head of dealing at Fexco Corporate Payments, said: “On a purchase as large as a car, exchange rates can be a dealmaker or a dealbreaker. Two years on from the UK’s vote to leave the EU, thousands of Irish car buyers – both individuals and garages – are still capitalising on the weak pound.
“The UK has a much greater supply of used cars than Ireland, so all things being equal, a British used car should cost less than a similar model on this side of the Irish Sea.
“Historically the cost – and red tape – of importing a UK-registered car into Ireland put off all but professional dealers or the most committed individual motorists. But sterling’s continued weakness has shifted that calculus and is nudging ever more Irish car buyers to look to the UK for their next car.
“In 2015 the euro-pound exchange rate averaged 72.6p, while in the first six months of 2018 it averaged 87.9p, before surging past 89.5p last week. But with the UK widely expected to raise interest rates in August, sterling could strengthen in coming weeks – meaning Irish buyers planning to import a car from the UK may want to lock in the current favourable exchange rate by using a forward contract.”
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