By Dom at Reduce My Excess,
19 November 2018
What's Going to Happen?
It’s all everyone seems to talk about these days, but we wanted to try and navigate you through the political minefield that is Brexit to tell you, as best we can, what might happen to the car hire industry when we leave the European Union.
We’ll split this up into a few different areas, what we know, what we don’t know, and what we can estimate. Let’s start with the easiest:
What We Know
This section may be the easiest for us to write, but it may be the most frustrating for you to read. The truth is, we know very little; so forgive the bullet points, but we, like any other industries are living and dying by the ongoing talks. Here’s the big picture:
The pound is volatile.
The strength of the pound is wildly different week by week. Sometimes it’s optimistically gaining strength, other weeks it’s just best not to check. The slightest reaction from the press or statement from an official can impact its performance hugely. This has repercussions on the price of everything, most notably foreign currency. When exchanging your pounds for euros, this can make it almost impossible to try and get the best deal.
The cost of renting a car will change.
For better or worse, Brexit will change the cost of renting a car abroad. Most probably, the insurance premium requested by rental companies will increase, as we will be customers from “outside of the EU” and will most likely pay an added premium on insurance.
New trade negotiations will alter the industry.
Depending on how these play out, the whole previous paragraph might be completely irrelevant (I did tell you this would be frustrating). Trade negotiations are naturally ongoing, and they will continue long after the 29th March. The outcome of these will potentially bring massive changes to hiring a car in Europe, we will literally have to wait and see.
The Switzerland Rule.
Finally, something concrete (Just kidding.) Currently the rule for hire cars from Switzerland is that they are not allowed to be driven outside of the country by any EU national, including Britons. So it’s fairly safe to say that this law will impact the UK in the future, by essentially adding a ‘new Switzerland’ to Europe that will impact whether EU nationals can rent cars from the UK and drive them freely.
What We Don't Know
How much will change?
It’s a fair certainty, that there’ll be things we missed out in the first section that will make the eventual long-term outcome of Brexit almost impossible to quantify. With the landscape shifting almost daily, to attempt to guess the eventual outcome would be very difficult.
Whether your UK driving licence will be valid in the EU.
This has been discussed at length in the recent months. As it currently stands, GB licences look like they won’t be recognised if no deal is reached by the deadline date. If this becomes the case, you will require an international driving licence in order to legally drive on the continent, but if a deal is reached then that problem will likely resolve itself.
Almost everything else really.
I know this isn’t what you want to read, but we’re all flying by the seat of our pants on this one. If you’ve been keeping your ear to the ground like we have been, chances are when we know something, you will too. For updates on the situation, feel free to follow us on Facebook or Twitter, where we’ll be sure to keep you posted with any up-to-date changes.
What We Can Estimate
It will be more expensive
Until the pound rebounds fully after 29th March, car hire abroad will be more expensive, in fact, most things abroad will be. Whilst the price won’t technically increase, due to the weakness of the pound, the exchange will mean less for our money (literally), so be prepared to spend more for less.
It will take time for the Pound to strengthen again.
This is really just a matter of time. Eventually the UK’s economic landscape will flatten out and dare we say steadily increase at some point. When that will be, we can’t say, but along with this period of unstable economic growth, is an unstable pound. So sitting and waiting for it to rebound might be a painful process, but it should get there in the end.
Fuel Prices will increase.
This, we’re fairly certain about. It all boils down to oil trading tariffs. The EU was charged a certain amount for oil it imported and exported, and this price was agreed by the World Trade Organisation. If we leave the EU without a fresh agreement, or the UK being given a worse tariff than the EU originally negotiated on our behalf; then fuel prices could drastically change. Which all adds up to a bit of a headache at the pump.
It’s business as usual until 29th March 2019. If you’re visiting an EU country after this period, then keep a close eye on updates to see if anything changes which affects your travel plans.
Either way, head to our car hire excess insurance page to get yourself some car hire cover today.