VRT Megathread - ALL VRT DISCUSSION IN HERE - Read First Post

The trade in value of my car is set by the book value which corresponds to its new value. Buying off my friend allowed me access to their secret Glass's guide which showed me the book value and thats what he offered along with a extra couple of hundred due to low mileage and condition. This has been the case in all 9 new cars that I've purchased.

You still haven't addressed my point on peoples outstanding finance as in the example I gave

Also your point on cars devalueing thats what they do. Take the current traded in stock on forecourts acroos the country. The dealer would have given pre VRT abolishment values to the customers who traded in. He would the have to sell all of this stock at post VRT abolishment prices putting him out of business

Of course nobody put a gun to my head but I wanted a new car and was fortunate enough to be able to afford one.

Of course I'm looking at it from my point of view and my circumstaces which would be the same for 1000's of others

Maybe in your case you don't have to worry about finance settlement figures so in that case I can see why your suggestion would suit you

batman1 wrote: »

So, it was 27k?

Take it back to the dealer and ask how much it's worth now.

20k?

Whats your point? Of course its worth less as it would be second hand. But under opinion guys suggestion it would be worth a lot less

-Chris- wrote: »

Jesus, I can't take any more. You really don't know what you're talking about, opinion guy.

Fair enough. Bring it.

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Opinion guy on the value of cars:



But would he be able to explain to the guy who's lost €70k in 2 years how meaningless the value of his car is?

Your in danger of straw manning me here. The point was this car lost its value due to market forces. Its nothing to do with VRT. Scrapping VRT wouldn't make a blind bit of difference to this guy.

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Opinion guy on the free market:



So the value of a car is set by the market, by the convergence of the value expectations of both buyers and sellers...



...but if you're unhappy with the trade in value you're being offered, you just go and sell the car privately for whatever price you see fit.

You sell it for what you can. Likely higher that a dealer will give you. incidentally there is another discussion here on price fixing - but lets not go there, eh ?

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Opinion guy on dealer pricing:


But I'd have to ask, is competitive the same as cheap?
Dealers are already on extremely tight margins, even in the good times. When dealers have to lower the price of the car they've already bought to match the value of the cars that are coming in from the UK, that decreases their profitability.
How is artificially depreciating the stock of a business good for that business?

Because it would allow them to directly compete with the UK and SELL to the UK. Furtzy has a point here about dealer stock devaluing over night. Now I'll deal with figures later. But yes the dealers will take an on paper hit initially. But if you operate on tight margins the way to make money is to sell more units. Just ask Tesco, Aldi, Lidl etc. You scrap the VRT you will sell more units both here and to the UK.

Dealers make money by selling stock for profit - turnover on their artificially depreciated stock merely gives them enough cashflow to pay their bills that month.

I don't think you understand the word turnover. Its total sales made in a period of time. Profit comes after your costs are taken away from your turnover.

If you're making a loss on each car you sell, then selling more of them is the exact opposite of what's good for your business.

But you ARE NOT making a loss on every car you sell. There is a ONE TiME loss.


Now at this point I want to say something. I'm assuming free market conditions. If you are telling me that the dealers are all going on a reference book to look up values then thats not a free market, thats a cartel. Frankly, if that is the case my attitude is f**k them - thats anti-competitive, anti consumer and in this case the sector needs a major kick up the arse. But i digress, we are discussing VRT.

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This is a great point, up to a point:


Giving the ability to reclaim VRT on exported cars would open up the used car market to the UK and make a massive difference to the car market.
I don't think I'd be considering Europe as a massive market for our used cars though, they drive on the wrong side of the road...

hahaha you got me there. I completely forget about the right hand drive thing.:D But oh well, the UK is a pretty huge market in and of itself. and hey if Johhny Frenchman could save a few grand buying here maybe he woudln't mind having a left hand drive car - thats his business.

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Now for some fuzzy maths...

What percentage exactly? Would you even take a guess?
If you owned a car that cost €45k three years ago and is now worth €25k, what would be the effect on your car if I dropped the cost of the new car by €7,500?

Well, roughly speaking assuming depreciation for a given model is relatively steady, your loss on the 25 k second hand car would be 25/45 * 7500 = 4166 EUR loss in book value. in theory - assuming you just scrapped VRT and didn't change anything else (which is NOT what I am suggesting - I'm getting tired of saying that). Market conditions may override this. For example if its an 2009 car it will hold its value better.

So you'd like to see the depreciation on your car (caused by the new version of your car dropping 20% in price), so you could buy your next new car for 14% cheaper?

Your damn right I would. 20% of 10k is worth far less than 14% of 28k. Honeslty would you people do some math please ?

I'd say you'd barely break even on that transaction (depending on the age & value of your car, of course)

I'd save 1200EUR ish. The price of a holiday. Yes please.

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And the best bit of logic?



So the reason car sales are up this year compared to last year is because of the collapse in the housing market?

Aboslutely. The people who still have money to spend are NOT spending it on houses. Interst rates on deposit suck. THese people are the ones now buying cars till the housing market wakes up again.

I'm sorry opinion guy, I think you're really wrong.

Well you didn't do the math.

Speaking of math - more to come in a minute. but i fell this post is long enough

Vertakill wrote: »

Maybe this guy bought a Phaeton.. in that case, it would be pretty normal! :rolleyes:

Yeah or maybe it was just dealer speak to put himself across as the caring salesman;) I have my suspicions the story was at least exagerated

So the Math

What i suggested earlier was this:

Personally I think they should scrap VRT, differentally adjust VAT on vehicles in accordance with vehicle emmissions bands and make up any shortfall in higher fuel taxes.
Say a base rate VAT for emissions band A of 25%, 27% for B, 30% for C, 35% for D, 40% for E and up.

Now everyone is jumping down my throat on this. But lets look at what a regime would do to new car prices in actuality. Ok for simplicity I'm assuming a pretax price of 20,000. I worked some figures in the spread sheet and heres what I came up with (note extended my scale to include all tax bands):

Attachment not found.

As you can see - this actually doesn't cause huge drops in car value. Its roughly a 3000 euro drop for each band.

Applying to the example you used earlier of a 45k EUR car now worth 25k. I could be smart about it and assume tax band G but lest not lets say E whichi i fair enouhg for a car of that value I would say. so working back that had a pretax purchase value of roughly 29k. Under the proposed system its purchase price would have been 40,509. Fair enough ? So scaling that then the depreciation on his 25k car would have been (45000-40509) * (25/45) = 2495.

If he were to replace his car with a new one he would have a net saving of 1996 EUR. Yay. Consumer wins. Consumer does not lose out from his "devaluation".


So if we adjust the laws in this way - consumer does better. Not alot better, but a bit better. Certainly enough to stop many going to the UK and having all the extra hassle involved in that. Now to the dealer - yes he takes an overnight stock hit. This is a once off. Its finished once he has sold all the cars on his lott the night of the changeover. And as we've shown the loss is more modest than we thought. But to compensate him, he gains the benefit of a more stimulated new AND second hand market, AND hugely enhanced competitiveness in selling cars to the UK & NI.


Frankly its a no brainer. But sure thing - you all continue being Turkey's voting for Christmas.

double post ?!?!?
no clue whats going on with my browser

Stekelly wrote: »

Whats the point in changing a whole system, costing the country millions, so that a few thousand peopel that go to the UK to buy their cars can get the cars cheaper?.

If your system for new cars doesnt loose any revenue, how are cars cheaper? Simple maths, car costs €45k now and €40k under your system, then tax take is down.


Plus of course we're now paying more dole to all the people that were put out of business in the initial hit ( I wonder would you be so flippant with the jobs if it was yours you were gambling with) coupled with a further hit in income tax take.

Ok you are being deliberately obtuse. Yes tax take woudl be somewhat down, but not compeltely. I have already said it would boost the industry. that means create more jobs and profits. You would also scrap the need for VRT office and staff saving the excheqour money. You either don't understand the math and economics i'm talking about, or you are choosing not to understand it. I'm done with this now and I'm done repeating myself.

K-9 wrote: »

Yes, but you are then increasing VAT.

Anyway, it ignores my other point. Surely there are better uses of resources than buying new cars. We are in a recession, buying new cars, while increasing tax revenues and giving us a nice feeling, what does it contribute LONG TERM to the economic recovery.

There is a huge opportunity cost foregone here! €20,000 on a new car versus what €20,000 if wisely invested could achieve.

The economy needs people to spend money. People buying cars creates jobs and wealth. There are no wise investments for 20k these days.

Personally, I think if they cut Employers PRSI by the same cost, it would achieve far more. Hell, it may even mean increased car sales in the long run.

Maybe - i haven't thought about it.

opinion guy wrote: »

You seem to be under the illusion that there are hoards of people not paying VRT. There aren't. There are a handful. Most people who importa a car happily pay the VRT because they are STILL saving money.

Try telling that to the people who live in Northern Ireland but have homes out here as well the North and want to drive their cars without paying VRT.

Over 10,000 people on that other facebook page don't want to pay it which is why they want to do away with VRT.

I wish people would stop suggesting the increased fuel tax as a replacement for VRT it would not work. Unfortunately we have a land border with the UK along which I spent most of my life. If petrol prices were increased in the south people simply buy it in the North and when I say people I don't mean people like myself who lived 2 miles from the border. Back in the 90's when there was a dramatic difference in price it wasn't uncommon to see people arrive from as far away as North Dublin to the south Fermanagh areas with large tanks on trailers much as you seen along the border in recent years when the price was cheaper here. All of the southern petrol stations and their associated shops closed down and have only re-opended in the past few years

Also at a time when petrol is at 1.35 a litre raising it further would be madness and immensly unpopular. Increasing fuel always has a knock on effect on goods prices so now instead of VRT, an elective tax, you would now have a negative effect on all regardless if they had a car or not

K-9 wrote: »

Oh agreed. Maybe the solution isn't following the policies of the the bubble years, which I'm sure we all agree, failed.

Not being smart, but maybe you should think about it? Reducing taxes to boost spending got us in this mess.

Rather than reducing taxes to just boost consumer spending on cars, maybe if the resources could be spent on reducing other taxes? Like say, Employers PRSI? Thus, instead of making a car cheaper, we make jobs and employment cheaper?

I do understand why people prefer to think of how to make the car I am going to buy, cheaper, rather than thinking of the long term, altruistic option, which may benefit them far more in the long run.

Hmm I wouldn't say lowering taxes led to the financial collapse I'd say lax lending policies and lack of financial regulation did that. Sure reduce employers prsi. Do it as well. I really don't buy your idea that this woudl be a short term option. We are talkign abut opening up markets int he uk whichi would give the irish economy a great boost and create jobs etc.

Any One wrote: »

Try telling that to the people who live in Northern Ireland but have homes out here as well the North and want to drive their cars without paying VRT.

Over 10,000 people on that other facebook page don't want to pay it which is why they want to do away with VRT.

Oh jesus would you get over this. THere was ONE story about some crazy soccer mom. There ARE NOT 10,000 people doing this.

furtzy wrote: »

I wish people would stop suggesting the increased fuel tax as a replacement for VRT it would not work. Unfortunately we have a land border with the UK along which I spent most of my life. If petrol prices were increased in the south people simply buy it in the North and when I say people I don't mean people like myself who lived 2 miles from the border. Back in the 90's when there was a dramatic difference in price it wasn't uncommon to see people arrive from as far away as North Dublin to the south Fermanagh areas with large tanks on trailers much as you seen along the border in recent years when the price was cheaper here. All of the southern petrol stations and their associated shops closed down and have only re-opended in the past few years

Also at a time when petrol is at 1.35 a litre raising it further would be madness and immensly unpopular. Increasing fuel always has a knock on effect on goods prices so now instead of VRT, an elective tax, you would now have a negative effect on all regardless if they had a car or not

Straw man. We have not been said anything about increasing fuel prices that last 5 pages or so. WE have been suggesting increasing VAT on new cars.

Stekelly wrote: »

How do you figure it will boost sales? As I already said, people who want cars already buy them. In the case of 2nd hand cars , if they were a bit cheaper peopel would still spend the same money, or maybe less, but get a slightly newer car or maybe a different model. As for new cars, during our best sales years we had a high rate of new car buying , thats not going to go up in any significant numbers. So the simple fact is that more or less the same amount of peole will be buying cars regardless of how much or the price is tax, so if less of the price is tax, less goes to the coffers.

As for less money being spent on public service pay, how many public servants have been let go in recent memory? (we're talking full time staff, not fudging numbers by using external contracts not beign renewed.) public servants dont get sacked, they get redeployed if at all, anyway theres still the paperwork involved in registering the cars, just without the money beign handed over.

So to summarise what will happen under you plan:
More or less the same amount of sale.
Tax take down, when we need it to go way up.
Motor industry jobs lost, meaning more social welfar payments and less income tax paid.
Some other tax raised to compensate (be it fuel taxes, income tax or whatever)
The one plus point is that people who were buying cars anyway get them a bit cheaper.


You can keep saying stuff all you like, it doesnt make it true . The only advantage to your plan is that cars will be a bit cheaper. The negatives far outweigh that one positive and theres no evidence to suggest otherwise.

For the last time - you could sell your cars to the North and the UK. You would remove the incentive to buy in the uk for irish people. More people would buy here.

Christ the UK/NI is a far bigger market to sell into than here. THis not complicated. To be honest it really seems like you have some vested interest in retainging VRT. Are you a car dealer yourself ?

R.O.R wrote: »

Do you really think the people on mainland GB could be arsed buying in Ireland to save a few pennies?

It used to be cheaper here to buy cars (and they had the same speedo at the time), but only a few were ever exported as new cars.

It would have to be substatially cheaper in ROI to get the Brits to bother their arses, and the majority of the importers / manufacturer's (who look after UK & Ireland in a lot of cases) just aint going to let that happen.

Now that stupid idea has been blown out of the water, where is this mahoosive increase in sales going to come from? That's the only way your plan is going to work, and it really isn't going to happen.

You also seem to be under the very much misguided impression that dealers make a huge margin on new cars sold :rolleyes:

Whoa there boyo. Explain that bit in bold. Ain't going to let that happen ? Isn't there a free market ? Or are you suggesting otherwise ?

OK I'm done. I'm getting really fed up with repeating myself over and over and over to people who either havne't read the thread, looked at th esums or just chosen to ignore them.
I expect this thread will roll on thou. Enjoy.