According to the CEO of one the biggest car dealerships in Great Britain, the projected interest rate hikes in the near future will not hinder the outstanding performance the auto industry is registering each month.
While back in 2008 and 2009 new car sales sunk and the government had to implement a car scrappage scheme to support them, today the UK auto figures are chief among Europe’s bright spots, returning to levels seen only before the economic crisis a lot faster than in other countries. For 2014, the sales after the first six months of the year are well on track to reach the projected total of 2.4 million units, a 6% increase over 2013.
“Every quarter-point movement, if it’s passed on to the customer, is 3 pounds a month,” says Andy Bruce, the chief executive of car dealer Lookers. “It’s not going to stop somebody buying a car. So even three or four interest rate rises on that basis is not going to fundamentally change the affordability of the car.”
The car dealership – which annually sells around 120,000 cars in the UK – has its CEO confident that even if Britain’s record low 0.5% interest rate base is scheduled to rise, the consumer confidence will not be very soon deterred from the purchase. He said the hike – coming as soon as 2015 – would only add to around 100 pounds more on an average car lease over three years.