The National Franchised Dealers Association (NFDA) has raised concerns over the impact of the Bank of England’s latest interest rate increase.
It said higher borrowing costs could place further pressure on dealers who are already under the cosh.
The Bank of England increased the base rate from 3.75% to 4%, marking the first rise in more than three years, as policymakers respond to increasing inflationary pressures.
Dealer are already under pressure. Motor Trader reported yesterday that dealer pay had stalled in the last 12 months, as dealerships face ongoing pressures on profitability.
According to the Motor Salary Survey 2026, from accountancy and business advisory firm BDO LLP, dealers remain cautious about pay in an attempt to keep tight control on cost bases.
Sue Robinson, Chief Executive of NFDA, said: “The increase in interest rates will be disappointing for automotive retailers and consumers, particularly at a time when household budgets and business costs remain under pressure.
“Higher borrowing costs could further impact vehicle affordability and consumer confidence.
“We recognise the need to tackle inflation, but it is important that decisions also consider the impact on consumer spending and business investment.
“A stable economic environment is essential to supporting growth across the automotive retail sector.”
