A NO-deal Brexit would have a major impact on the car industry, driving up the price of new vehicles by around 10 per cent, it has been claimed.

Poole-based car finance company Creditplus has produced a white paper on the impact that leaving the European Union without a deal could have.

Creditplus director Paul Nash said: “Not only would a no-deal Brexit have sizeable commercial ramifications for the sector, including the introduction of tariffs and potentially lengthy queues at our borders, but consumers would almost certainly bear the brunt of price increases on new cars of around 10 per cent. We would expect used car prices to increase too.”

The House of Commons is due to start a series of votes today on the way forward on Brexit, after West Dorset MP Sir Oliver Letwin won support for a move for MPs to take control of the parliamentary timetable from the government.

Creditplus, based at Fleets Corner in Poole, has facilitated car loans of more than £100million since it was formed in 2004.

In its white paper, it says: “The UK automotive industry is one of Britain’s most successful sectors; with a turnover of over £82billion a year and over 800,000 employees, it is responsible for almost one tenth of the country’s manufacturing output.

“The single market and customs union have been hugely instrumental to the success of the industry, allowing for frictionless trade which has allowed a highly integrated supply chain to form between the EU28 member states.”

Citing figures from the Society of Motor Manufacturers and Traders, it said nearly 60 per cent of cars produced in the UK were sold in the EU, while 55 per cent of engines were exported to the EU.

If Britain leaves the EU on World Trade Organisation Terms, the average tariff on UK exports to the EU would be 4.5 per cent, while manufacturers will face an average export tariff of 10 per cent.

Tariffs would put up the average price of a UK-built car sold in the EU by £2,700, and the price of a commercial vehicle by £2,000, it is estimated.

The white paper also draws attention to the “just in time” manufacturing techniques which allow motor manufacturers to issue production instructions as soon as a vehicle is ordered.

It points out that the Mini factory in Oxford has more than 220 deliveries by truck every day, while the Honda factory in Swindon has parts arriving on lorries every seven minutes.

Honda has said that a 15 minute delay to each lorry at Dover could add £850,000 a year to its production costs. It has since announced that its Swindon plant will close by 2021.

The white paper also raises concerns about the difficulty of finding more staff if free movement of workers ends, and of the loss of the £5.5billion in EU funds available to automotive companies and partners such as universities.

It adds: “The consequences of a no-deal Brexit with the introduction of WTO tariffs would be extremely damaging for the automotive sector, as it would impact massively on the industry’s highly integrated and efficient supply and production chains.

"Therefore, a no-deal Brexit would undoubtedly result in a shift of manufacturing to countries within the single market and customs union, and a fall in consumer demand for UK cars would occur due to increased production costs.”

It says trade deals other countries “will not outweigh the loss of trade in Europe” in the event of a hard Brexit.