Despite encouragement from the European Commission to shop around to find cheaper new cars in other EU countries, Irish motorists can only watch with envy as bargains are snapped up by car buyers living in countries such as Britain and Germany which do not charge vehicle registration tax (VRT).
The latest EU report on the variance in new car prices across the 25 countries of the Union has found that substantial savings can be made by shopping abroad for new cars. Savings of almost 30 per cent can be found simply by buying a car in a country that charges its residents VRT and exporting it to one that does not.
This has come about because some car-makers are still effectively subsidising prices in countries with high VRT, such as Denmark and Finland.
Ireland, which also suffers from high VRT, has seen its subsidies eroded since the latest EU rules on competition in the car industry came into force in 2002. This has meant that the EU's goal of seeing car prices reduced here has not been achieved.
Denmark and Finland still enjoy significantly lower pre-tax prices for their new cars. However, because these countries charge the highest levels of VRT, their residents do not benefit.
But motorists from other EU countries can buy their new cars in Denmark or Finland and export them back to their country of residence. By doing this they benefit from the lower pre-tax cost of the cars there.
The practice is encouraged by the European Commission, as Competition Commissioner Neelie Kroes explained: "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."
Irish motorists who attempt this however will see any savings wiped out by the Revenue Commissioners when they come to register the car here and are presented with a large VRT bill. The Department of Finance has confirmed that, regardless of EU calls for a change to its policy, it is not considering scrapping VRT in the near future.
Despite continuing price convergence, as the European Competition Commissioner points out, the difference in the pre-tax cost of a new car across the EU can still be substantial. The Fiat Punto, for example, costs almost 30 per cent more in Germany than in Finland.
This difference represents a saving of €2,700 for Germans who travel to Finland to buy their new Fiat. Huge differences can be found on other cars, with savings of over 25 per cent available on the Ford Fiesta and Renault Clio.
Similar savings can be found on the larger VW Golf and Passat, but only for those motorists lucky enough to live elsewhere.