Sales of new cars dropped by almost 50 per cent in June ahead of new rules on calculating car taxes that took effect today.
According to the Society of the Irish Motor Industry (Simi), there were 7,907 new cars sold last month, a drop of 48.65 per cent on June 2007, when 15,399 were sold.
Sales for the first six months of the year (124,146) were down 18.83 per cent down on the same period in 2007 (152,938), according to the Simi statistics.
Simi Director General Alan Nolan said the drop had been “widely expected” that a drop in May would continue in June “as we moved closer to the July changeover date and this has proven to be the case.”
The new tax rules governing new and imported cars came into effect at midnight.
The new regime sees a reduction in Vehicle Registration Tax (VRT) and ordinary motor tax for cars with lower CO2 emissions and an increase for cars that give out higher levels of CO2.
Under the old rules both VRT and car tax were based on engine size. Car bought before today will continue to be taxed on this basis.
However, vehicles bought since January 1st can, on renewal, opt to have their car tax calculated under the new scheme if it is beneficial.
The new rules favour diesel-powered vehicles and will see a large reduction in price on many models. However, the net benefit to motorists who trade their cars in may be lost as the price of second-hand models, operating on the old car tax system, has fallen significantly.
Mr Nolan said the new tax regime was “really good news for consumers
as cars will be cheaper to buy if they make the good choices.”
"There are savings across all ranges and technologies including efficient petrol engines, cleaner diesels, biofuel and hybrid cars,” said Mr Nolan.
“We have already begun to see the changes affecting the used car market with a recent survey indicating that asking prices on used diesel cars have dropped on average by 11 per cent, and petrol cars on average by 15 per cent since the
start of the year. There is incredibly good value out there for buyers in new and used cars.”
