According to the Finance Leasing Association 91% of privately purchased cars were done on a finance agreement in 2019 and presumably an even higher amount for business purchases. Assuming that they load the car price by £1500, this will equate to an additional cost of about £45 per month on a 36 month contract.
I suspect most people will react to this by simply extending the contract duration by a couple of months to maintain their monthly outgoing as opposed to being driven away from fossil fuels.
When you combine the above with the impact of Covid which I suspect has seen a lot of peoples mileages reduce, I suspect the combination of a £1500 price hike and reduced mileages will simply slow down new car sales and hence government VAT revenue.
