Has the budget impacted car buyer confidence?

With the dust now settling after the Autumn Budget announcements, we can now start to look at what affect it is having on consumer confidence. 

Last month we considered how macro-economic factors in the lead up to the budget were having a negative impact on car buyers, prompting an earlier than normal seasonal slowdown for car retailers in the final months of the year. 

With Chancellor Rachel Reeves’ first budget including £40bn worth of tax rises, (including an increase in National Insurance Contributions for employers, which will have a massive impact on car retailers), there was a lot to digest. 

Consumer buying plans 

MOTORS, the online used car marketplace, polled the views of 1,000 car buying decision makers to gauge what impact it would have on their purchasing decisions.

Encouragingly, it found nearly two-thirds (64%) had not changed their buying plans because of the budget. Overall, nearly a quarter (24%) plan to buy in the next three months, 33% in the next six months and 50% in the next 12 months. 

As a result of the budget, 20% will now buy a car later than planned, while 16% expect to buy sooner. 

Half said their original plans to buy new, nearly new (under two years old) or used had not changed. For those who had changed their plans, 18% said they are now more likely to buy used, 17% new and 15% nearly new. 

The budget’s treatment of EVs 

Turning to fuel choice the budget clarified the favourable personal tax treatment of fully electric company cars beyond 2028, giving greater certainty to fleet buyers and drivers. 

It also confirmed its manifesto pledge to ban the sale of new internal combustion engine vehicles in 2030.  

For retail buyers incentives to switch to EVs included a £10 first year registration fee which will run from 2025 to 2030, while rates for all new cars emitting more than 76g/km C02 will double. Chancellor Rachel Reeves also committed to investing £200m to accelerate charging points rollout. 

Consumer attitudes to EVs post-Budget 

A consumer poll carried out by JudgeService, the customer review platform, shed light on whether the EV transition was more palatable following the budget. 

Nearly half of the respondents (46%) said they were not more confident about buying an EV, although 23% said they were more confident. 

The budget commitment to invest in an EV charger rollout left 46% not believing the national infrastructure will be adequate by 2030, although 24% believed it would. 

Promoting Neil Addley, managing director of JudgeService to say: “While EV company car drivers will continue to benefit from favourable personal tax rates, our poll shows the budget’s commitment to lower VED rates and investment in the charging network are not enough for retail buyers to make the EV switch.” 

Final thoughts 

After all the speculation, the budget announcements are now in the public domain, removing the uncertainty that had affected many car buyers since the summer.  

What this will ultimately mean to buyer confidence and EV uptake will play out in the coming weeks and months, which is why having systems in place to nurture and action every single customer enquiry is vital as you close the final quarter.    

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