Car prices higher here despite EC move

Irish car-buyers will still face among the highest prices in Europe despite yesterday's move by the European Commission to encourage…

Irish car-buyers will still face among the highest prices in Europe despite yesterday's move by the European Commission to encourage competition in the market.

In principle, the move to end restrictive practices in the sale of new cars should create more competition and provide consumers with greater choice and lower prices but high domestic taxes on new vehicles here will continue to wipe out any benefit.

According to Commission surveys, car buyers in Ireland can expect to pay over €1,000 more than British consumers for a basic small car such as the Fiat Punto, and over €3,000 more than the Greeks.

The latest European car price differentials report, based on prices recorded last November, is due out in the next few weeks.

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It is expected to show similar disparities to those in the last published report, based on prices recorded in May of last year.

That survey showed the manufacturer's price of the same car differed from country to country by hundreds of euros.

But the most dramatic differences emerged once domestic taxes were added.

A basic model pre-tax Fiat Punto had a lowest manufacturer's price of €6,240 in Greece, a mid-range price of €7,519 in Ireland and a top price of €8,769 in Britain.

The relationship between Greek and British prices remained the same after tax - the Greek car cost €8,109 after 30 per cent tax and the British counterpart cost €10,292 with 16 per cent tax added.

Danish car-buyers take the most dramatic hit on tax, with over 100 per cent of the original price being added to the forecourt price.

The 53 per cent combination of Value Added Tax (VAT) and Vehicle Registration Tax (VRT) added in Ireland, however, increased the cost of the car to €11,476.

The European Consumer Centre welcomed yesterday's developments in Brussels but admitted the benefits would be slow to filter down to Irish buyers.

"In principle, people should be able to buy where they like, to buy in a supermarket-type setting or to buy online but there are obstacles," said public relations officer, Ms Mary-Denise Fitzgerald.

"We spend so much money on a car that we want to be able to get a feel for it before we pay for it. We want to take it for a test drive and go back in a week's time and do the same.

"That's harder for someone living on an island than on mainland Europe."

Ms Fitzgerald said her office had found in trials that dealers abroad were not always helpful to Irish callers and that right-hand drive vehicles were not always readily available.

In any case, the pre-tax prices were not always cheaper abroad and VAT and VRT wiped out any savings once the car reached Irish soil, although some buyers in the luxury or rare model market had reported savings.

"Where we may notice a difference is in the sales of car parts. We are moving towards a situation where any dealer should be able to sell any car part and that would benefit motorists here because most parts are imported."

Fine Gael has made a pre-election pledge to lower VRT in government.

The AA has said Irish motorists will be deprived of the benefits of a more open European market if VRT is not reduced. The Motor Insurance Justice Action Group has also criticised the levels of tax on new cars. A spokesman said premiums were calculated partly on car values which were artificially inflated by high taxes.