Car data experts Motorcheck.ie have warned that now Brexit is confirmed the impact on the Irish Motor Trade is set to be negative. The financial markets expect Sterling to weaken against the Euro by between 15-25% meaning imports from the UK become more attractive prompting a further surge of used vehicles imported from the UK hitting our shores in the coming months. The extent of this will be largely determined by economic factors.

Commenting on the potential effects of this, Michael Rochford, Managing Director of Motorcheck.ie said, "The knock on effects of Brexit are potentially very worrying for both the new and used car markets in Ireland. Firstly a weakening of sterling and a surge of cheap UK imports will mean used car values in Ireland may fall sharply from their current position. This may leave many car buyers in negative equity as the value of the car they are driving falls beneath what they owe".

The effects of a sharp fall in used car values may be particularly pronounced for vehicle dealers and manufacturers who have underwritten "guaranteed minimum future values" on PCP deals. For the consumer negative equity at the end of a PCP deal means they are potentially faced with the choice of, refinancing a vehicle in negative equity, handing back the car and getting into another PCP deal, or opting for a cheaper used car.

Refinancing a vehicle in negative equity could be difficult as banks tend to focus of vehicle value, while another PCP will be less attractive as residual values drop.

The prospect of handing back the car on PCP and opting to finance a cheaper used vehicle looks financially most attractive, although customers may not like the perceived drop in status.

Motorcheck believes that if this situation emerges it is possible that New Car Sales, which have been riding the crest of the PCP wave in recent years, could actually begin to fall. If used car values drop sharply and PCP becomes less attractive many of those buying new cars today may switch to a more affordable nearly new import from the UK.

Whilst the economic impact on the new car dealer and distributor in Ireland could be severe, on the flip side used car sales may begin to boom via a surge in attractive UK imports and falling used car values. However, Motorcheck caution that, "Buying a used import has its own risks, as we are all too aware, given the high incidence of clocked and written off cars so consumers need to remain vigilant and check the history of any used car no matter how attractive it looks on paper".