It’s finally happened; In what Prime Minister Theresa May has described as “an historic moment from which there can be no turning back,” Britain has invoked Article 50 and formally started the “Brexit” process of withdrawing from the European Union.

Unsurprisingly, the media is packed with stories about this monumental moment. At PetrolPrices.com, we’ve been looking at the potential impacts on UK drivers – some of which could prove hugely significant over the coming months and years.

Petrol prices

In the short term, it seems unlikely that this initial stage of Brexit will have any particularly noticeable effect on the price of petrol and diesel.

Save for a small bump in the value of Sterling against the Euro in the immediate wake of the Article 50 letter being delivered to the EU, the currency markets have remained calm. After all, everyone knew this moment was coming. Oil prices also remain solidly around the $50 per barrel mark, where they’ve now hovered for some time.

As negotiations progress, however, things could change rapidly. The UK price of fuel is heavily influenced by the value of the Pound against the US Dollar. Any signs that the Brexit negotiations are going badly (perhaps due to disagreements over the UK’s “exit bill”) could hit Sterling hard, perhaps causing it to fall in value by anything up to another 20%.

That said, if things go more smoothly on this score, and oil prices remain reasonably static, it’s unlikely we’ll see shifts in fuel prices of any more than 10 pence per litre either way in the medium term.

Buying and selling vehicles

The price of vehicles already seems set to rise in the future as a direct effect of Brexit. The fact that many car parts are purchased from elsewhere is already pushing up prices due to how much Sterling has weakened since the referendum.

The flipside of this is that cars being theoretically “worth more” in the UK could mean that residual values strengthen, boosting resale prices.

Another interesting point, raised in a report in The Telegraph, is that Brits may not have quite so many new car models to pick from. This is because of the costs involved in adapting cars for right-hand drive. Coupled with the increasing cost of parts, it seems likely some manufacturers will simply decide not to make certain models for the UK market.

It’s also worthy of note that consumable parts – including tyres, brake pads and filters, could go up in price due to similar currency-related reasons.

Travelling and driving abroad

The precise implications of Brexit for Brits driving to and within Europe will take a while to play out. Until the process is complete, nothing will officially change.

However, once the changes begin they could be significant.

First off, the days of the “booze cruise” to France or elsewhere could well be numbered. Britain will break away from EU customs arrangements in time. This may mean “genuine” duty-free goods from just over the channel, but the quantities of alcohol and tobacco individuals will be permitted to purchase will vastly reduce from where they are now. If the limits match those currently set with countries outside the EU, we may well see limits of four litres of wine and a single carton of cigarettes per person – a vast reduction on what’s allowed now.

It’s also reasonable to expect that customs and border checks will be far more involved and time-consuming than they are now. All-in-all, a quick jaunt over to France to stock up with beer and wine will become far less appealing once Brexit is complete – unless Prime Minister May manages to strike up some kind of bespoke deal for the UK.

Insurance and other legalities

A reduction in the amount of booze we can bring back from Europe may seem rather insignificant compared to other changes that could come to pass, depending on the outcome of Britain’s negotiations with the EU.

While Brits will no doubt be able to continue to travel to mainland Europe, there’s a chance their length of stay could be curtailed if true freedom of movement is lost. Some pundits have even discussed the prospect of Brits needing a visa for travel, but realistically the negotiations would have to go really badly for this to come to pass.

A more likely issue for Brits is the loss of the European Health Insurance Card (EHIC), should Britain end up leaving the European Economic Area (EEA) as well as the EU. Should this happen, UK citizens will need private health insurance to receive medical treatment when travelling in the EU.

Car insurance-wise, it’s unlikely much will change, although an EU law change back in 2o12 outlawed the practice of insurance companies offering cheaper premiums to (statistically safer) female drivers. Should the UK decide not to continue to implement this, women could see their insurance costs fall, at least in theory – but this doesn’t seem especially likely.

How do you feel about the announcement of Brexit? What do you think will be the biggest impacts on UK drivers? Let us know your thoughts in the comments section below.

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