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Scottish independence could negatively impact used values, says Glass's

Date: 11 September 2014

A yes vote for Scottish independence next week could disrupt consumer confidence in the UK and  depress used car prices as supply from fleet and ex-PCP sources continue to increase, according to Glass's.
Richard Parkin, Glass's director of valuations, said: "It is anticipated that the result of the referendum will affect this sector through its significant influence on wider economic trends.
"Even in the run-up to the referendum, the closeness of the vote has spooked the financial markets and led to a fall in sterling. This has been compounded by news of lower GDP growth rates and reduced business confidence - as monitored by the ICAEW / Grant Thornton index, for example." 
The global head of currency research at Societe Generale in London, Kit Juckes, has stated that sterling is likely to suffer an immediate fall of 3-5% if Scotland say 'yes' to independence. Many other commentators believe that GDP and employment growth would also suffer in the climate of uncertainty created by a 'yes' vote.
Parkin said: "All of this is sure to have an impact on the new car sector, as firms will tend to delay investment and consumers will postpone 'big ticket' purchases such as cars.
"Used car prices will be under pressure as supply from fleet and ex-PCP sources continue to increase. The only part of the market that might benefit is nearly-new values: most cars sold in the UK are built in the Eurozone, so a falling pound will lead to new car price inflation which will, in turn, have a positive impact on the already depressed values of nearly-new models."
Parkin said he was not concerned a yes vote would effect future residual values in the long term, but it could have a lasting impact on the UK's economic outlook as a whole.
He said: "If there was to be a 'no' vote, the used car market would retain its current strength."
According to the latest Survation poll for the Daily Record the no vote is now at 53%, giving the pro-UK campaign a six point gap over yes.
The vote for Scottish independence will take place on 18 September, 2014.


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