9:07 am, January 16, 2025
The impact of rising staff costs is the biggest concern on car dealer’s minds heading into 2025 as tax changes in last year’s Budget begin to impact businesses.
That is according to a new survey by Startline Motor Finance, which has been asking dealers for their thoughts at the start of a new year.
The outfit questioned almost 60 dealers what they thought was likely to negatively affect their businesses in 2025 with staff costs coming out on top.
Overall, four out of 10 dealers (40%) said the issue was their biggest concern, after the government announced an increase in employer national insurance contributions in October.
Other major concerns raised by those surveyed included higher costs for stocking (38%), premises (38%), compliance (34%) and vehicle preparation (33%).
In response to the findings, Paul Burgess, CEO at Startline Motor Finance, said: ‘It seems dealers are concerned about a whole range of costs in 2025 but staffing is the biggest.
‘While pressure for pay rises is probably lessening, the increase in employer National Insurance announced in the Budget is no doubt a worry for many.
‘Seeing concerns over stocking, premises, compliance and preparation costs is perhaps not a surprise but it is noteworthy that dealers believe that they will continue to face ongoing rises in these areas at a time when inflation has fallen back to much lower levels than we have seen in recent years.’
Elsewhere in the survey, other dealers admitted to having concerns about falling vehicle sales, which was cited by 34% of retailers.
There were also worries over servicing income (21%), finance commission (19%), add-on sales (19%) and aftersales income (12%).
Confusion over the ZEV mandate was also mentioned as a headache by 14% of dealers.
Burgess added: ‘It is interesting that vehicle sales are the top concern when it comes to reduced income and perhaps suggests there is a degree of worry over the economy in general in 2025.
‘Some dealers clearly think the general used car market could take a turn for the worse.
‘The ZEV Mandate is also on the minds of dealers and we are hopeful that the current consultation will provide effective and practical help when it comes to both new and used electric car sales.
‘The government says it is in “listening mode” so let’s hope the motor industry’s concerns are being heard.’
