Increase in used-car imports blamed on VRT confusion

A significant increase in the number of used cars being imported into the Republic has been blamed on confusion surrounding Government changes to the vehicle registration tax (VRT) regime.

More than 118,000 used cars have been imported in last 23 months, according to figures obtained from the Department of Finance by Fine Gael’s environment spokesman Phil Hogan.

The figures show 59,539 cars were imported in 2007 and a similar figure of 59,013 has been recorded for the first 11 months of this year.

The total for the two years represents a near 20 per cent increase on the number of used cars imported in 2005 and 2006 which was 98,038.

Mr Hogan claimed Minister for Environment John Gormley’s “botched” handling of the changes to the VRT has directly contributed to the increase in used-car imports and to a fall off in new car sales here.

“Since he became Minister in June 2007, Mr Gormley’s comments on VRT sowed confusion throughout the car industry and this, undoubtedly, contributed to the huge amount of cars brought into Ireland over the last 23 months,” Mr Hogan said.

In the 2007 Budget, Mr Gormley announced the introduction of new CO2-based motor taxation regime for all new cars purchased after July 1st of this year.

He subsequently extended the scheme to apply to all new cars bought in 2008.

In a statement responding to Mr Hogan’s claims, the Department of the Environment said the trend in relation to the purchase of second-hand cards was increasing long before the Minister’s changes.

“The car industry has been impacted by the global economic downturn the same as all other sectors. The strength of the euro is also having an impact on imports from Northern Ireland and Britain.”

“The purpose of introducing the emissions based system in the first place was to encourage and incentivise as many people as possible to purchase greener cars,” it said.

"Deputy Hogan as Fine Gael’s environment spokesperson should be aware of the big picture and be aware the purpose was to reduce carbon emissions from the transport sector which is one of the areas of increased emissions,” it added.

Mr Hogan said recent substantial differences in VAT rates between North and South is likely to exacerbate the fall off in domestic car sales.

“There is little doubt that southern consumers will find it cheaper to travel North of the border to buy cars and the numbers being imported will remain at an incredibly high level once again showing that Fianna Fáil’s botched Budget is hurting Irish businesses and attacking sales and jobs,” he said.