VRT increase on diesels in budget

celtic_oz

whats the chances ?

"Its deputy Director General Brian Cooke says: “Our message to the decision makers is simple with this declining market. There should be no negative taxation decision on VRT, road tax or fuel.”"

http://www.independent.ie/life/motoring/no-negative-taxation-decision-on-vrt-road-tax-or-fuel-in-budget-motor-industry-urges-government-36091262.html

Marcusm

celtic_oz wrote: »

whats the chances ?

"Its deputy Director General Brian Cooke says: “Our message to the decision makers is simple with this declining market. There should be no negative taxation decision on VRT, road tax or fuel.”"

http://www.independent.ie/life/motoring/no-negative-taxation-decision-on-vrt-road-tax-or-fuel-in-budget-motor-industry-urges-government-36091262.html

Indeed there should be no negative decision; a positive decision to increase fuel duty on diesel should be implemented, however.

maidhc

Marcusm wrote: »

Indeed there should be no negative decision; a positive decision to increase fuel duty on diesel should be implemented, however.

Not that easy, the knock on impact on it would be severe on business.

acronym Chilli

maidhc wrote: »

Not that easy, the knock on impact on it would be severe on business.

could it provide a Brexit-offsetting boost to the diesel washing business in the border counties?

dil999

I would say that they will be focusing on anything to discourage the purchase of imports from the UK. Not really sure what they can do though.

The numbers are huge 62K cars up to the end of August this year. That will be around 93K cars imported to Dec this year. If you assumed that the average purchase was €8K, then you are looking at 3/4 of a billion euro going out of the economy in used car sales for 2017. That's about €140 million in VAT lost to the exchequer.

bazz26

But what about the VRT revenue they make from registering those imports here? I'd like to find out of how many of those importing would have been buying a brand new car here as VAT only comes into play if they were buying a new car instead of a second hand one here.

grogi

Marcusm wrote: »

Indeed there should be no negative decision; a positive decision to increase fuel duty on diesel should be implemented, however.

Duty on diesel changes hardly anything and hits those who actually should drive diesel most.

On the other hand increase of VRT on diesel cars would make a huge impact and pushed occasional drivers away from dirty diesel cars.

acronym Chilli

bazz26 wrote: »

But what about the VRT revenue they make from registering those imports here? I'd like to find out of how many of those importing would have been buying a brand new car here as VAT only comes into play if they were buying a new car instead of a second hand one here.

yes,
and every new car bought is anyway a chunk of money leaving the economy since they're a large manufactured imported good.

grogi

bazz26 wrote: »

But what about the VRT revenue they make from registering those imports here? I'd like to find out of how many of those importing would have been buying a brand new car here as VAT only comes into play if they were buying a new car instead of a second hand one here.

People need car. And when buying one, they are doing maths - is it worth paying a premium in order to buy new over the used/import. If that premium is minimal, they will buy new...

testicles

This post has been deleted.

bazz26

grogi wrote: »

People need car. And when buying one, they are doing maths - is it worth paying a premium in order to buy new over the used/import. If that premium is minimal, they will buy new...

PCP and scrappage deals are major attractions of buying new which you won't get buying second hand in the UK. I just think that not an overly huge amount of people importing from the UK were in the market to buy a new car here to begin with. Would be interesting to see broken down statistics of the average age of the cars being imported. I'd imagine those buying a car between 6 and 12 months old from the UK probably did look at buying new here initially. Those importing a car other 12 months probably never considered buying new here.

acronym Chilli

testicles wrote: »

This post has been deleted.

Can probably expect car prices to go up generally, including new cars. We'll be only RHD market in EU post-brexit, and the next nearest RHD market may be on other side of a customs barrier (and potentially market standards too).

Maybe we need to do like the Swedes in 1967?
http://99percentinvisible.org/episode/h-day/

bazz26

I cannot see them touching the VRT bands at least in this year's budget. Remember that the way new cars are tested now is going to change for 2018. They will be tested using real world parameters rather than the cheating labs they use upto now. This means that Co2 figures will change on alot of new models which in turn will mean increased VRT.

Increases in diesel excise duty is probably more likely and I expect the gap between petrol and diesel at the pump will get smaller and eventually start going the other way to discourage people who cannot warranty running a diesel from buying future ones. I recon this move away from diesel and petrol to a lesser extent will be gradual in this country as oppose to an overnight thing. Sour the milk rather than poison it.

dil999

bazz26 wrote: »

But what about the VRT revenue they make from registering those imports here? I'd like to find out of how many of those importing would have been buying a brand new car here as VAT only comes into play if they were buying a new car instead of a second hand one here.

VAT comes into play on a second hand car also. Its 23% of the difference between the purchase and the sale price (for dealers), so my calculation for VAT lost is obviously incorrect.

My point was really around the amount of money leaving the economy. If used cars are being purchased in the UK, instead of here, then all of that money is leaving the economy, instead of going into the domestic used car market. €700 million is 20,000 jobs at the average industrial wage.

dil999

acronym Chilli wrote: »

Can probably expect car prices to go up generally, including new cars. We'll be only RHD market in EU post-brexit,

Don't forget Malta:)

acronym Chilli

dil999 wrote: »

VAT comes into play on a second hand car also. Its 23% of the difference between the purchase and the sale price (for dealers), so my calculation for VAT lost is obviously incorrect.

My point was really around the amount of money leaving the economy. If used cars are being purchased in the UK, instead of here, then all of that money is leaving the economy, instead of going into the domestic used car market. €700 million is 20,000 jobs at the average industrial wage.

But you can't just do the sums like that, it's not like all that 700m becomes gross pay for motor-industry workers, even if spent on used Irish cars. You could probably better calculate with what the gross margin on used cars is (buy versus sell). Say that was 20%, then that would be an upper bound of (0.2)(20000)=4000 jobs.

Can do a similar calc with new cars (import price versus selling prices here, which is the money available to support the industry here: pay, suppliers, profits, etc.,).

To talk about car industry as a jobs story is almost always misleading in Irish context.

acronym Chilli

dil999 wrote: »

Don't forget Malta:)

Good point, I'm heading to Malta to import a car! Should be nicer weather than in Birmingham

What do folk think of this:
https://autotradermalta.com/viewcar.aspx?id=26372#query=0&page=1&order=RecentlyAdded&ma=Volkswagen&mm=Golf
2011 VW Golf TDI, 1.6, €10,950 ?
All the cars seem pretty low mileage, that one is 65,000 kms... suppose it's hard to drive a long way there!

murphthesmurf

Being only RHD country in EU should make no difference, it's not like they'll be making them especially for us. They'll be making the same amount as they do now. If it does make a difference it's purely down to money grabbing dealers/manufacturers inventing reasons to put the price up.
The question I have regarding deisels is why did nobody realise how poluting they are here? The lunatic Green Party told everyone to buy them as the CO2 was lower I know. But was it never questioned? Did nobody ever point at the plumes of black smoke coming from the back of a deisel car and say "wtf is that'. For me the Green party did one of twon things.
1. They were completely incompetent and so obsessed with reducing CO2 that they 'forgot' to investigate what else is emitted from a deisel.
Or
2. They knew about the cancer causing other emmissions such as Nitrogen Dioxide etc but decided that the 'good' of reducing the CO2 outweighed the 'bad' caused by the other emmissions that most people wont know about anyway. Save the World is priority, forget the rest.
Either way, why have none of them resigned over it.

When I was about 12 in the early 80's I asked my Dad "what's the difference between petrol and deisel cars, why do some use one and some the other'. He told me then that deisel is a dirty fuel. If my Dad knew that in the 80's why did the government not find out until a few months back. Incompetence!
I don't have a huge amount of sympathy for people that fell for it either, you only have to drive behind a deisel to see the black soot blowing out of it. Even some of the modern cars. What did people think this was? Fairy dust?

I also have little sympathy for car dealers in Ireland. There is a Toyota dealer by me. When the GT86 sports car came out I watched the adverts on UK tv advertising it as starting from £28k sterling. The garage by me got one in for an enormous €44k . The vat isn't much different if any between UK and Ireland on cars, the exchange rate at the time would have bought the price to about €33k . Where did the other €11k come from? If I'd walked into the garage I'd be expecting to see the salesman wearing a balaclava or dressed like Arthur Dalet smoking a cigar. Madness.

Rant over.

walus

bazz26 wrote: »

PCP and scrappage deals are major attractions of buying new which you won't get buying second hand in the UK. I just think that not an overly huge amount of people importing from the UK were in the market to buy a new car here to begin with. Would be interesting to see broken down statistics of the average age of the cars being imported. I'd imagine those buying a car between 6 and 12 months old from the UK probably did look at buying new here initially. Those importing a car other 12 months probably never considered buying new here.

Maybe they are attractive but for those who can really crunch the numbers it is still better to go to UK. Example: Peugeot 508 SW GT 180 hp - new in Ireland 43k, 2016 model brought from UK (tiny mileage) 23-24k. All prices in euros.

s15r330

acronym Chilli wrote: »

Can probably expect car prices to go up generally, including new cars. We'll be only RHD market in EU post-brexit, and the next nearest RHD market may be on other side of a customs barrier (and potentially market standards too).

Maybe we need to do like the Swedes in 1967?
http://99percentinvisible.org/episode/h-day/

Most of the polulation can't drive as it is, imagine if that change came in!!
I think i'd use public transport for a while!

murphthesmurf

s15r330 wrote: »

Most of the polulation can't drive as it is, imagine if that change came in!!
I think i'd use public transport for a while!

The sale of funeral cars would increase though. We are on the correct side, the rest of Europe should switch

murphthesmurf

Also anyone who believes the price of cars would come down if they were LHD is a fool. The prices are where they are simply because they can.

bazz26

walus wrote: »

Maybe they are attractive but for those who can really crunch the numbers it is still better to go to UK. Example: Peugeot 508 SW GT 180 hp - new in Ireland 43k, 2016 model brought from UK (tiny mileage) 23-24k. All prices in euros.

As I said earlier, someone looking at a 2016 for 23-24k car probably wasn't looking at a brand new 43k car here to begin with. And you would want to have a few marbles lose to spend 43k on a new 508 even here as they suffer huge depreciation here too.

maidhc

bazz26 wrote: »

As I said earlier, someone looking at a 2016 for 23-24k car probably wasn't looking at a brand new 43k car here to begin with. And you would want to have a few marbles lose to spend 43k on a new 508 even here as they suffer huge depreciation here too.

No, but might have been looking at new 25k one...

bazz26

Possibly but I'd say the majority of people looking at a brand new entry level 508 would probably buy the same spec in the UK but for less money as opposed to buying a highest spec for the same money.

Cee-Jay-Cee

testicles wrote: »

This post has been deleted.

Technically it should only effect UK cars registered after the UK leaves the EU as VAT will have been paid in the EU on cars registered before full brexit. VRT will be due anyway so Brexit shouldn't really make too much difference for quite a few years yet. I'm hoping that's the scenario as I plan to change my current car in 3 years and as I wouldn't buy a diesel car if you paid me, I have no choice but to look to the UK.

dil999

acronym Chilli wrote: »

But you can't just do the sums like that, it's not like all that 700m becomes gross pay for motor-industry workers, even if spent on used Irish cars. You could probably better calculate with what the gross margin on used cars is (buy versus sell). Say that was 20%, then that would be an upper bound of (0.2)(20000)=4000 jobs.

Can do a similar calc with new cars (import price versus selling prices here, which is the money available to support the industry here: pay, suppliers, profits, etc.,).

To talk about car industry as a jobs story is almost always misleading in Irish context.

I know it doesn't equate to motor industry jobs. I was just trying to put the 700 Million into some context.
That entire amount of money is gone out of the country. Zero of it goes back into the Irish economy. And for used cars, that shouldn't be the case. While I understand that the cost of business in Ireland for a car dealer is higher, than the UK, Irish car dealers have been gouging Irish motorists for years, particularly in the used market.

Toyotafanboi

For what it's worth, I'd say only a small fraction of those 62k cars are imported by private individuals.

I'm sure it's mostly made up by dealers who are buying entire forecourts of stock in the UK because it's what they have to do now to stay competitive pricewise and also to source a viable amount of stock in some cases.

Irish Steve

Toyotafanboi wrote: »

For what it's worth, I'd say only a small fraction of those 62k cars are imported by private individuals.

I'm sure it's mostly made up by dealers who are buying entire forecourts of stock in the UK because it's what they have to do now to stay competitive pricewise and also to source a viable amount of stock in some cases.

Valid points, what a lot of people seem to be forgetting is that there are still significant numbers of people who are not seeing any sort of recovery in their living standards, and are possibly still in deep trouble with debt issues, so financing a new car is not going to happen.

The number of decent second hand cars available in Ireland is low because of the lack of sales for a long time, and the insurance companies are making it increasingly difficult (expensive) to insure older cars. So, if you can't stretch to a new car, and can't keep on running the old one because it's becoming a money pit, the only other option is to find something used at a sensible price, and right now, that is increasingly a used car from the UK, where the prices are making them attractive, and they don't suffer from the "paddy spec" limitations that too many Irish cars are stuck with.

If I was looking to change at the moment, I'd be very interested in looking at what was available from the UK, simply because I'd be getting much better value for my money, and with the way that the VRT system etc works, the Government are not going to care too much either way, as they will get a similar income from those vehicles. The "Open Market Selling price" that is being used however is a joke, but that's a subject for another thread.

Tigger

bazz26 wrote: »

But what about the VRT revenue they make from registering those imports here? I'd like to find out of how many of those importing would have been buying a brand new car here as VAT only comes into play if they were buying a new car instead of a second hand one here.

there is vat on second hand cars

jimmycrackcorm

maidhc wrote:

Not that easy, the knock on impact on it would be severe on business.

Businesses already can claim back VAT and expense fuel so they're not losing too badly. Hauliers would feel the pinch

BorneTobyWilde

If you make it possible for 20 euro to buy 20 litres of petrol then the diesel problem is solved. Diesels are great as fuel is cheaper coupled with the extra MPG.
They need to decrease duty on petrol fuel , we'd all have a petrol car if that happened. If you go to fill up a gallon can for a lawnmower it costs 10 euro. Where is all the fuel duty on the millions of gallons burnt in lawnmowers so on, they're off road machinery like a tractor, yet you have to pay a tenner to cut your lawn !

elperello

BorneTobyWilde wrote: »

If you make it possible for 20 euro to buy 20 litres of petrol then the diesel problem is solved. Diesels are great as fuel is cheaper coupled with the extra MPG.
They need to decrease duty on petrol fuel , we'd all have a petrol car if that happened. If you go to fill up a gallon can for a lawnmower it costs 10 euro. Where is all the fuel duty on the millions of gallons burnt in lawnmowers so on, they're off road machinery like a tractor, yet you have to pay a tenner to cut your lawn !

Not to mention all the boat outboard engines and jet-skis.

colm_mcm

dil999 wrote: »

I would say that they will be focusing on anything to discourage the purchase of imports from the UK. Not really sure what they can do though.

The numbers are huge 62K cars up to the end of August this year. That will be around 93K cars imported to Dec this year. If you assumed that the average purchase was €8K, then you are looking at 3/4 of a billion euro going out of the economy in used car sales for 2017. That's about €140 million in VAT lost to the exchequer.

Do you think the money from the sales of new cars stays in Ireland?

maidhc

BorneTobyWilde wrote: »

If you make it possible for 20 euro to buy 20 litres of petrol then the diesel problem is solved. Diesels are great as fuel is cheaper coupled with the extra MPG.
They need to decrease duty on petrol fuel , we'd all have a petrol car if that happened. If you go to fill up a gallon can for a lawnmower it costs 10 euro. Where is all the fuel duty on the millions of gallons burnt in lawnmowers so on, they're off road machinery like a tractor, yet you have to pay a tenner to cut your lawn !

You must have a fair sized lawn! A gallon would do me for a season!

Now the tractor on the other hand will burn 200L a day.

I think the way it used to be made sense, diesel was the fuel of commerce and petrol the fuel for consumers. Worked fine up to 2008 that way.

Lantus

Car manufacturers are either increasing or about to increase the cost of diesel by several thousand compared to their equivalent petrol models.

For new car purchases this will increase petrol car market share as the 10c difference between fuels is so small.

My understanding from the few car dealerships I have spoken to is that they cannot meet demand for petrol.

In a few years this will quickly filter down. Increasing diesel by 10c will also make people think twice.

gctest50

Just increase the road-tax on any diesel cars, much easier

colm_mcm

Lantus wrote: »

Car manufacturers are either increasing or about to increase the cost of diesel by several thousand compared to their equivalent petrol models

Are they?

gctest50

colm_mcm wrote: »

Are they?

They've fallen out of love with them - even Mercedes couldn't be assed designing their own so just stuck that Dacia diesel engine into their cars

celtic_oz

if they change the VRT bands for diesel cars would it come in over night or 1st Jan ?

colm_mcm

gctest50 wrote: »

They've fallen out of love with them - even Mercedes couldn't be assed designing their own so just stuck that Dacia diesel engine into their cars

Right, I'm replying to a comment that all manufacturers themselves will put the price of diesel cars up relative to petrol ones (before taxation is taken into account apparently)

Companies have been using other companies engines for decades, sure the Mercedes Citan van is a rebadged Kangoo for example. New Mercedes X Class is a reskinned Nissan Navara - Nothing wrong with Mercedes using a proven Renault engine in a car that globally will sell mainly in petrol (CLA/A Class etc)

walus

bazz26 wrote: »

As I said earlier, someone looking at a 2016 for 23-24k car probably wasn't looking at a brand new 43k car here to begin with. And you would want to have a few marbles lose to spend 43k on a new 508 even here as they suffer huge depreciation here too.

To the contrary. I’d say anyone who is looking to buy a new car surely looks at how much it is going to depreciate over the next 1-3 years and if getting a second hand with small mileage and still under manufacturer’s warranty would not be a wiser option. I gave an example of Peugeot here but same rule applies to VW Passat that literally have flooded the second hand car market in UK. The depreciation is not as high but on a 2016 model one would still save 15k over the new one in Ireland.

celtic_oz

i would imagine that buying nearly new second hand cars in the most cost effective way the state has of updating the stock of cars in Ireland

dil999

walus wrote: »

To the contrary. I’d say anyone who is looking to buy a new car surely looks at how much it is going to depreciate over the next 1-3 years and if getting a second hand with small mileage and still under manufacturer’s warranty would not be a wiser option. I gave an example of Peugeot here but same rule applies to VW Passat that literally have flooded the second hand car market in UK. The depreciation is not as high but on a 2016 model one would still save 15k over the new one in Ireland.

In general, used cars depreciate over time also . A new car is going to cost you just short of 60% of its purchase price over 3 years. The same car purchased at one year old is going is going to cost you 60% of its purchase price over 3 years.

The main reason people buy a 1 year old used car is because they want a car in a particular class and either can't afford or don't want to pay the cost of the new one. The other option they have is to go for a new car that is 20% cheaper than the car they would like. In € terms it will cost them exactly the same. I would say that the vast majority of car buyers don't ever consider the concept of depreciation when purchasing a car.

colm_mcm

On that basis, How much does a new car lose over 4 years?

dil999

Somewhere in the region of 70% of its purchase price.

Simple example
so called "depreciation" of 20% per year for 3 years and an additional 10% year 4.

A new car for 30K after 3 years is worth 12K, 12K/30K is 40% of purchase price
your car cost you 18K over 3 years

after 4 years car is worth 9K

the same car bought 1 year old for 24K. is worth 9K 3 years later. 9K/24K = 37.5% of purchase
price your car cost 13K over 3 years

A new car for 24K after 3 years is worth 12.6K, 12.6K/24K is 40% of purchase price
your car cost you 11.4K over 3 years

The reason a used car cost less than the same model new is because the purchase price is less. The cheaper the car you buy, the less it will cost you. Talking about depreciation in relation to mainstream cars is meaningless. When you buy a pair of shoes you don't ever consider how much you'll get back for them in 1 years time.

maidhc

dil999 wrote: »

The main reason people buy a 1 year old used car is because they want a car in a particular class and either can't afford or don't want to pay the cost of the new one. The other option they have is to go for a new car that is 20% cheaper than the car they would like. In € terms it will cost them exactly the same. I would say that the vast majority of car buyers don't ever consider the concept of depreciation when purchasing a car.

I don't agree that depreciation is linear, i.e. It doesn't always loose 30% of the value in year x+1. I don't know the figures, but certainly once a car reaches a certain age depreciation plateaus and I would be sure that the depreciation in year one is by far the highest.

It is all complicated by the fact larger cars depreciate far steepiner than small ones.

grogi

dil999 wrote: »

Somewhere in the region of 70% of its purchase price.

My extensive research shows that the average yearly depreciation is 82%.

After a year a car is worth 82% of its price, after two years it is 82% * 82% = 67%, after three years it is 82%*67%=55%...

Some depreciate slightly less, like Toyotas, some slightly more - but the difference is not that huge.

Squeaksoutloud

grogi wrote: »

My extensive research shows that the average yearly depreciation is 82%.

After a year a car is worth 82% of its price, after two years it is 82% * 82% = 67%, after three years it is 82%*67%=55%...

Some depreciate slightly less, like Toyotas, some slightly more - but the difference is not that huge.

Are these trade in prices or selling price. I.e. if trading in my 3 year old car I presume I won't get 55% of value but if buying I'll pay 55% of new equivalent?

Sono

dil999 wrote: »

Somewhere in the region of 70% of its purchase price.

Simple example
so called "depreciation" of 20% per year for 3 years and an additional 10% year 4.

A new car for 30K after 3 years is worth 12K, 12K/30K is 40% of purchase price
your car cost you 18K over 3 years

after 4 years car is worth 9K

the same car bought 1 year old for 24K. is worth 9K 3 years later. 9K/24K = 37.5% of purchase
price your car cost 13K over 3 years

A new car for 24K after 3 years is worth 12.6K, 12.6K/24K is 40% of purchase price
your car cost you 11.4K over 3 years

The reason a used car cost less than the same model new is because the purchase price is less. The cheaper the car you buy, the less it will cost you. Talking about depreciation in relation to mainstream cars is meaningless. When you buy a pair of shoes you don't ever consider how much you'll get back for them in 1 years time.

So a 30k car brand new is worth 12k after 3 years!? This is not true and is very much down to a lot of factors the main one being mileage.

In my opinion a 30k car does not depreciate by 18k over 3 years.

What are you basing this on exactly!?

creedp

dil999 wrote: »

VAT comes into play on a second hand car also. Its 23% of the difference between the purchase and the sale price (for dealers), so my calculation for VAT lost is obviously incorrect.

My point was really around the amount of money leaving the economy. If used cars are being purchased in the UK, instead of here, then all of that money is leaving the economy, instead of going into the domestic used car market. €700 million is 20,000 jobs at the average industrial wage.

Presumably the car manufacturers supply new cars to Ireland free of charge?