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What does a no-deal Brexit mean when leasing or buying a new car?


It’s now just over a couple of weeks away until the transition period ends and the UK is no longer part of the European Union. The official end of the transition period is as of 12am on 1st January 2021. It’s been well documented on the news of late that as of yet no trade deal has been struck.

Up to now there has been no tariffs on cars imported from the EU into the UK due to existing trade rules which will run until 31st Dec 2020. However, in the event that the UK leaves the EU without a deal on 1st Jan 2021, any additional costs to car manufacturers and importing of cars will likely mean the threat of price increases for people looking to buy or lease a car. 

If the UK leaves the EU without a trade agreement, in line with WTO (World Trade Organisation rules, after 31st Dec 2020, a 10% tariff will apply to finished cars imported from the EU. The Society of Motor Manufacturers and Traders (SMMT) suggest that import tariffs alone could push the price of a car imported from the EU up by as much as £1,500! This is because import tariffs are applied on the customs price of a vehicle at the time of import as opposed to the final price of sale. 

And it’s worth noting that approximately 70% of cars registered in the UK are currently imported from the EU.


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Ford, Mercedes-Benz, Peugeot and Vauxhall are just some of the car manufacturers who have confirmed the prices of their cars will increase should a no-deal Brexit occur. Other manufacturers confirmed it would lead them to review their prices. 

Car buyers should look to complete their purchase or lease of a car asap to avoid the risk of price increases arising from a no-deal Brexit. 

Recently, UK car leasing has seen positive growth due to Brexit as consumers become better aware of the advantage of spreading the cost of car ownership. Leasing a car provides an excellent solution for any sudden depreciation or change in exchange rates, an important factor when you consider many cars originate from the EU.



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Maintenance and Servicing If you currently lease a vehicle and you don’t have a maintenance package, if you need to get a part replaced there’s a good chance that it will be imported into the UK. 

Tariffs will be applied to these imported parts, though the level of these vary depending on the type of part you require, and whether the UK and the EU reach a trade deal or not. It’s possible that the import of car parts could take longer. 

Providing you have a commodity code or description of the item you can see the current tariff rates on the Government’s website https://www.gov.uk/check-tariffs-1-january-2021. 

However, one of the many benefits of leasing a new car is that vehicles will come with a manufacturer’s warranty that normally covers the length of the lease.

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