Car Boom or UK Bust?
whatever happens, We’ll keep serving great food
As part of Barcelona NQ’s gossip blurb we have overheard much chatter in the eatery of further financial downturns in the UK’s economy. But, instead of poor lending in the housing sector it’s new car dealers that may be held accountable.
Cheap finance has underpinned much of the UK’s boom and growth during recent years and the motor industry has seen a huge benefit in sales.
Ultra low cost car finance loans including hire purchase, PCP (Personal Contract Purchase) and lease plans have all contributed to significant rises.
The motoring finance sector appear confident that mega low loan rates, that are accounting for a staggering 81% of all new vehicle registrations (known as PCP), are indeed a solid way for funding new vehicles. Claims are that poor credit/sub prime car lending accounts for just 4% of today’s market and that the motoring sector will be able to manage destabilisation further down the road.
But some industry experts seem unconvinced and claim that the pure volumes of lending for new cars will lead to vulnerabilities, increased lending rates and rises in unemployment.
Twenty years ago a car dealer would earn most of their money from the sale of the car but the millennials demographic now support multiple income streams for new car dealers. Finance packages, up sells, warranties, paint protection insurance and breakdown covers are all part of the modern car sale and many dealers claim to have never had it so good.
Will massive lending lead to future economic downturns? Mix Brexit into the food mix and it makes for interesting times. One thing is for sure, boom or bust, Barcelona NQ will continue to serve some of the best food in Manchester.