Who benefits from the Euro-Sterling exchange rate when buying a car from Europe?
I recently ordered a car manufactured in the Eurozone and then realised that the Euro has devalued against the pound by approximately 20 per cent over the last year. My question is who gets the benefit of this change in exchange rates? It certainly isn't the customer, having seen the imported car prices rise over this period. I have questioned the salesman who I ordered my car from and he assured me it was not his company. I'm not sure if I believe him!
Asked on 11 August 2012 by CE, Dronfield
Answered by
Honest John
If cars were actually cheaper pre-tax in Sterling when bought in mainland Europe, then broker businesses would have sprung up again to buy them for UK residents, as was the case 10 years ago. But in fact Sterling sank far more deeply against the Euro over the past five years than it has recovered. So, over the last five years, low UK prices have been subsidised by higher pre-tax prices in mainland Europe and this has been the reason why many Brit buyers have faced long delays in actually getting cars. If a factory can make more churning out LHD cars for lucrative markets that pay more for the cars than Britain does for RHD cars, then that's what it's going to do to stay in business.
Tags:
buying a new car
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