Irish paying up to 50% more for cars

IRISH motorists are paying up to 50% over the EU average price for new cars, according to a major report.

Figures from the European Commission show Irish consumers are still being sold some of the most expensive car prices in Europe, despite the continuing elimination of price differences on the cost of new, pre-tax vehicles between the various EU countries.

And the Government is the sole culprit for this element of “rip-off Ireland” as taxes add at least 52% to the price of every new vehicle sold in the Republic.

For example, the pre-tax price of a new BMW 320d model is only €24,852 but will cost a motorist almost €42,000 to buy - a 66% increase through the addition of VAT and VRT.

The report shows Ireland is one of cheapest countries within the 12-member Eurozone for such a model before tax. However, it becomes the second most expensive place in Europe to buy a BMW 320d after the Government takes its share of the forecourt price.

The report also highlights how after-tax prices for motor vehicles in Ireland remain stubbornly high even though price differences between the 25 EU countries continues to fall.

After-tax prices for new cars in the Republic are at least 30% above the EU average for most models. The price of a Nissan Micra at €14,550 is almost 50% above the EU average.

On a more positive note, however, inflation in car prices in Ireland was among the lowest in the EU over the past year at just 0.8% compared to the general inflation rate of 2.2%.

Meanwhile, EU Competition Commissioner Neelie Kroes welcomed the continuing improvement in convergence of car prices within the EU.

“However, price differences for certain models remain significant and consumers should not hesitate to make competition play so as to benefit from the good deals that still exist when buying abroad,” she said.

But the VRT imposed by the Government largely eliminates any such benefits for Irish motorists thinking of importing a vehicle from outside the Republic.

The Society of the Irish Motoring Industry, which has repeatedly called for the abolition of VRT, has welcomed recommendations by the EU that VRT should be phased out over the next decade as it interferes with the free movement of goods within a single market.