Car dealers blame confusion over VRT for 22% sales dip

MOTOR dealers yesterday blamed the economic downturn and confusion over the Government’s Vehicle Road Tax (VRT) changes for last month’s 22% fall in new car sales.

Dealers also said the joint St Patrick’s and Easter holiday fortnight during March had also blighted sales of new cars.

Figures released yesterday showed 20,190 new cars were registered in March — 22.3% lower than the same month last year when 25,974 were recorded.

In July the VRT levy on new cars is changing so gas guzzlers will be costlier while vehicles such as economical diesels will fall in price.

The change, announced by Finance Minister Brian Cowen in December, has led buyers to hold off new purchases either to get a better deal in the summer or because of confusion over new car prices.

Yesterday the Society of the Irish Motor Industry said the March figures were bad but sales so far this year remained healthy.

“There has been a fair amount of confusion about VRT but we are working hard to get information to the public,” said the society’s director general Alan Nolan.

“Even if people want to wait until July [to buy] we would not advise them to wait until then to put their order in.”

The tax changes mean the VRT levy will no longer be based on engine size but will instead be levied on emissions of carbon dioxide (CO2).

Cars such as two-litre diesels are among those expected to fall in price while petrol vehicles with the same sized engines could increase as diesel cars burn fuel more efficiently and produce less CO2 per kilometre.

Other tax changes mean vehicles with high CO2 emissions will pay more annual road tax than more environmentally friendly vehicles.

The registration figures were yesterday unveiled by the Central Statistics Office (CSO), which said the number of imported second-hand cars last month fell by 9.3% to 4,678 compared with March, 2007.

The CSO figures also show how another tax change has caused sales of environmentally friendly cars to rise.

Mr Cowen is reducing the tax saving on flexi-fuel cars, which can run on a clean-burn mix of 85% ethanol and 15% petrol.

Buyers get 50% off the amount of VRT due on a flexi-fuel car before July but thereafter the tax saving is capped at a maximum of €2,500.

In the first three months of this year dealers sold 1,248 flexi-fuel vehicles and 546 petrol-electric cars, which also get the 50% rebate, compared with 1,848 such vehicles in the whole of 2007.

www.ros.ie/VRTEnquiryServlet/showCarCalculator — to calculate VRT details for your car.