At the moment, it’s far from clear exactly how a decision by Brits to quit the EU this summer might play out. But we’ve taken a look at the issues that could affect UK drivers.
The UK is set to leave the European Union with 51.9% of votes in favour of what is known as Brexit.
While the ramifications of this decision are as yet unclear, we take a look at how Brexit could impact UK drivers.
Brexit and fuel prices
In the months leading up to the EU Referendum, the fall in the value of sterling was blamed on the possibility of a win for Brexit.
During the immediate aftermath of the Referendum results, the value of the pound fell by more than 10% - the lowest value against the dollar since 1985. Since fuel is priced in dollars, this drives costs up.
Some experts reckon that Brexit could lead to what would effectively be a permanent devaluation of the pound.
Reasons to worry?
The AA has previously said that, based on such forecasts, pump prices could be driven higher immediately after a “leave” vote.
But Simon Williams at the RAC believes such fears could be overblown.
“While the RAC has no view on the UK’s membership of the EU, the impact on fuel prices of Britain exiting is not likely to be as dramatic as motorists might be led to think,” Williams says.
“For example, a 20% fall in the value of the pound would – based on current exchange rates – only add £2 to the cost of filling up an average 55-litre petrol car, as a result of the average price of a litre rising around 4p from 101.95p to 105.56p.
“This would mean a two-car household filling up with petrol twice a month would spend £232 as opposed to £224.”
Oil price ‘more important’
Williams adds that the price of oil plays a much more significant role in the cost of petrol and diesel. He says:
“While it’s notoriously difficult to predict what will happen next with oil prices, OPEC appears to be sticking with the general principles of its over-production strategy.
“With this in mind, there’s little reason to expect anything to change drastically in the meantime.
“This means lower retail fuel prices look likely to remain with us until at least the middle of this year.”
What other factors could be affected by this vote?
The cost of vehicles
Sales of cars in the UK are very healthy at the moment: but could this be threatened by Brexit?
Motor manufacturers based in this country were keen that Britain remained in Europe – after all, this gave them more or less unfettered access to a very large export market.
Nissan said it would reconsider its UK operations in the case of a vote to leave, although Toyota has confirmed it will stay in Britain regardless of the referendum result.
But restrictions on trade with the remaining EU members could push up the cost of the raw materials and components imported for use in British motor manufacturing.
This could lead to more expensive vehicles for domestic motorists.
Motor insurance rules
One of the biggest recent changes to car insurance rules in the UK came as a result of EU intervention.
In 2012, the European Court of Justice ruled that providers could no longer take customers’ gender into account when setting premiums.
As a result, the cost of insurance for women increased slightly while men’s prices fell. But it’s uncertain that this policy would be reversed now that Britain is leaving the EU, especially given the administrative difficulties insurers were caused by the original change.
Similarly, when raising insurance premium tax (IPT) last year from 6% to 9.5%, George Osborne cited the need to bring the levy into line with rates in other countries.
Again, however, it’s unlikely that this tax hike will be scrapped purely because the UK is no longer an EU member.
It's worth noting that any of these possible changes won't happen overnight. Even when the UK officially decides to withdraw, it will take two years until the UK and EU part ways.