Glass’s director of valuations, Rupert Pontin, has drawn attention to the likelihood that the fall in value of the pound will result in a monthly PCP new car payments rise in 2017.

The huge currency realignment that resulted from the Brexit vote, has meant a hit on margins for the manufacturers. Glass’s predict that the manufacturers will seek to recoup margins via PCP payments, as “the least unpalatable choice”.

Rupert Pontin explained: “The pound fell in value by about 20% against the euro following the BREXIT referendum and has not really recovered to any great extent, nor is there any reason to think that it will do so in the medium term.

“This places considerable pressure on the profit margins being seen by many manufacturers who import cars from Europe into the UK. While they will probably be hedged for a certain period of time, the exchange rate shift will start to bite at some point soon.

“Somehow, they’ll need to recoup additional cash. There are several options open to them, such as increasing the list price of cars or charging dealers more for them, and we will perhaps see these taking effect to a greater or lesser extent in the next few months.

“However, probably the most likely outcome is that the heavily subsidised PCP payments that we have seen power the new car sector in recent years will start to increase. This will impact on deposits, monthly payments, interest rates and even the lengths of the PCPs themselves.”

Glass’s suggest that the predicted increases will have only a minor negative influence on the new market in 2017, and remain optimistic about the year ahead: “Our forecast for 2017 overall is that the new car market will drop by around 3.5% to a level of around 2.6 million cars given a 2016 market of just under 2.7 million which is  Glass’s believe will be 2.3% up on 2015. That means 2017 will still be higher than any year other than 2015 in the last decade. Overall, we are positive.