Michael McAleer answers readers' motoring queries.
From Edward Rafferty:
Could you please let me know how well the Toyota Prius, the petrol/electric hybrid car is selling in the Republic? Does it qualify for any government tax deductions for alternative fuel vehicles?
Sales have been sluggish to say the least, with only two sold last year and 36 since its launch at the end 2000, despite the recent arrival of stars such as Leonardo Di Caprio to the Prius owner's club. As for tax deductions, there is a rebate of about €3,000 on the VRT. However, the full price must be paid and the rebate claimed back through the income tax.
From Derry Maguire:
Over the past few months, I have seen some stories in the papers about the "Block Exemption Regulations". I've heard that from October 1st 2003, the cost of new cars in Ireland will rise by 20 per cent, unless Minister McCreevy reduces the VRT. I managed, with a lot of difficulity, to find some information on the EU website, but it doesn't answer my questions. Could you please answer them for me:
(1) From what date do these changes take effect?
(2) I know this is a silly question but . . . are there any plans by the Department of Finance to reduce the VRT to keep the cost of new cars the same. If not, is there an effective lobby to ensure that this happens.
(3) Would you advise people who are in the market for a new car this year to buy one before these changes take effect?
The thorny issue of block exemption has dominated the European motor industry for some time now, but it would seem to be a done deal at this stage. Block exemption aims to harmonise the price of cars (less tax) within the EU. At present these prices vary significantly between states, hence the lively trade in cross-border purchasing.
Here it has meant numerous transporters crossing the border filled with cars, much to the ire of the British importers and distributors. There is no EU order to harmonise (this would be anti- competitive), but it has sought to free up competition to such an extent that, if prices are not harmonised within one state, dealers from other EU states where the pre-tax price is cheaper would be free to open competing dealerships.
In effect it means that prices will be harmonised.
When the changes are introduced, Irish prices are likely to rise, as the base price here is lower than many other states. Already there have been moves towards reducing the gap, and the next EU report on car prices is likely to show a narrowing of price differences across the Union.
On your second question, the Department of Finance has no plans to remove VRT and understandably so, considering it generates too much revenue for the Government coffers. So far this year, with 41,617 cars sold up to last Thursday, the Government has collected VRT of over €242 million and VAT of €122million on the sale of new cars. In total motorists generate 20 per cent of the tax bill, a cash cow they will want to milk for the foreseeable future.
As to whether you should buy now, the advice would be yes, as most analysts believe prices will rise.
In which case feel free to contact Mr McCreevy who would be keen to talk with you.
From Deirdre Ni Chuanachain:
I have a book containing a photo of Horace Plunkett in his De Dion Bouton, reported as the first motor car in Ireland. Was this the first make or type of car in Ireland or does it mean that Horace Plunkett was the owner of the first car in Ireland?
According to our mine of motoring information, Bob Montgomery, the reference to Mr Plunkett first appeared in a book by Elizabeth, Countess of Fingall and lover to the aforementioned Plunkett. However, the claim is far from the truth.
Numerous claims have been made as to the first motorist in Ireland, but Bob says that it's beyond doubt that John Shaw Brown of Dunmurry, Belfast, was the first motorist in Ireland, with his Serpollet Steamer back in March 1896.