Vehicle auction company, British Car Auctions (BCA), believes that Alistair Darling should consider boosting the motoring market in the Budget with a stimulus for car credit. BCA’s Tony Gannon explains.
AMID the growing speculation over proposals for a scrappage scheme in the Budget (April 22), we believe other decisions may be needed to deliver a long-term benefit to the motor industry and its customers – such as small businesses.
We should expect little movement on fuel tax and the road fund licence if the Pre-Budget Report is to be adhered to. But we would argue that a stimulus for the car credit markets is actually more important.
Such action would mean those that can sensibly afford to finance a new or used car purchase can do just that.
Many potential deals are faltering at the loan stage because buyers are finding it difficult to get a deal that either suits them or is affordable. When these are instances involving car buyers with perfectly good credit ratings, the motoring market is losing potential business.
The used vehicle market has been one of the few bright spots in the economy in recent months. Used car and van markets have performed spectacularly well so far this year. Demand remains much stronger than it was for most of 2008.
But despite the recovery in prices, we believe there is more fragility in the market than we have previously seen. The last thing we need now is to see the market stalling.
So the Budget is therefore crucial – and stimulus is required right across the vehicle markets.
Supporting new car sales is vital. But it is equally important that the used car sector is helped as well.
Used cars are a major part of the motor retail sector’s business –and a major contributor to the UK economy.