VRT changes are 'anti-rural' and will lead to job losses says Cork car dealer

Industry representatives say the changes are likely to lead to an increase, rather than a reduction in car carbon emissions

Changes in the VRT bands will lead to price increases on many popular family models say car dealers

The changes to Vehicle Registration Tax (VRT) in Budget 2021 are “anti-rural and anti-climate” and are unlikely to result in a reduction in car carbon emissions according to those in the industry. 

The Irish Car Carbon Reduction Alliance (ICCRA), which represents the majority of new car dealers, said the new measures are likely to lead to an increase, rather than a reduction in car carbon emissions.

The new emissions testing system announced by Paschal Donohue yesterday, Worldwide Harmonised Light Vehicles Test Procedure or WLTP, will replace the old NEDC system and will see the number of VRT Bands increase to 20 from January 2021, with a significant gap between the highest and lowest VRT rates (7% to 37%).

Minister Donohue said the new VRT regime will be based on emissions performance levels “closer to real-world performance levels than is currently the case” and will encourage consumers to make “greener choices” when it comes to purchasing a new car.

VRT reliefs for Plug-in Hybrid Electric Vehicles and hybrids will be allowed to expire.

Denis Murphy, director of Blackwater Motors in Fermoy, said decisions made in yesterday's Budget will lead to job losses. Picture: Eddie O'Hare

Denis Murphy, managing director of Blackwater Motors, Cork and spokesperson for the ICCRA said: "penalising motorists for driving conventional cars is not going to lead to an increase in Electric Vehicles.” 

“Rather than incentivising the wide-scale adaption of newer, more carbon-efficient cars, people are going to hold onto their current car for longer, resulting in hundreds of thousands of older less carbon-efficient models remaining on Irish roads for years to come,” he added. 

Mr Murphy described the tax hikes as “a disproportionate response."

“Cars account for just 12% of the emissions in Ireland,” he said, adding that no other sector has been hit with such sweeping tax hikes.

“With Covid-19 having decimated the new car market and with Brexit on the horizon only adding to uncertainty, the tax increases further threaten the future of the motor sector Ireland.” 

“The Ministers for Finance and Public Expenditure and Reform both spoke today about protecting jobs in small and medium enterprises and creating some certainty in these uncertain times.” 

“Yet, they have proceeded to do the exact opposite with the retail car sector in Ireland. Jobs will be lost and livelihoods devastated by their decisions."

"We will now consider what options are available to us including legal avenues to challenges this,” he concluded.

Brian Cooke Director General SIMI. Picture: Aidan Oliver

The Society of the Irish Motor Industry (SIMI) said the changes to the VRT system will result in a €1,000 increase on the price of the average family car.

“This will make the new car market even more challenging for next year, reducing demand and slowing down the replacement of the oldest cars in the national fleet with newer lower-emitting cars," according to SIMI Director General Brian Cooke.

This, in turn, will make it "more difficult" to drive down carbon emissions caused by cars he said. 

We’re allocating €27m to support the roll-out of electric vehicles including grants and charging infrastructure. Changes to VRT will incentivise buyers of low or zero emission cars. #Budget2021 #GreenRecovery

— Eamon Ryan (@EamonRyan) October 13, 2020

Minister for the Environment, Climate and Communications and Transport Eamon Ryan has defended the changes to VRT announced in yesterday's Budget and said he believes electric vehicle sales "will soon skyrocket."