In the market for a low-price high-spec used car? Buy before Brexit

Anyone in the market for a low-price high-spec used car needs to act fast or risk finding their options considerably reduced as a result of the complicated and increasingly unhinged Brexit dance being done by our neighbours.

If the appalling vista of a no-deal becomes a reality across the water – as some of the more hardline Brexiteers appear to want – then buying used cars from the United Kingdom will most likely become a thing of the past.

Bringing a car from Newry to Dundalk could become as complex as shipping it from Beijing to Bantry if the frictionless trade we have grown accustomed to stops. And this will happen if the UK becomes what is known as a Third Country.

Even if the paperwork involved in such a transaction does not become hideously complex, then the simple tax changes will make it a non-starter for many people. In the event of a no-deal Brexit people seeking to buy a car in the UK will have to pay VAT at 23 per cent on whatever they bring in on top of the additional vehicle registration tax (VRT). By any measure, that will more than wipe out any financial attraction the purchase might have.

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Such a prospect may be one reason spending on car imports from the UK has more than doubled in the first six months of the year.

This year the number of second-hand cars motorists here will import from there will overtake the number of new cars bought in the Republic for the first time, according to a study from UCD's Michael Smurfit graduate business school and the Marketing Institute of Ireland. This was published at the start of the summer.

The study predicted that UK imports will climb to 105,000 this year while new car sales will fall to 104,000. Just three years ago new car sales were outstripping the sale of imports at a rate of more than two to one. In 2016, 146,545 new cars were sold in the Republic while the number imported was 72,153.

The reason for the surge in popularity of the UK import is the weakness of sterling

A recently released report from financial group Fexco echoed the business school's findings. It showed that car imports from the UK more than doubled in the first six months of the year with spending on imports climbing by 107 per cent compared with the same period in 2018.

The reason for the surge in popularity of the UK import is the weakness of sterling. It has been tumbling against the euro ever since the UK voted to leave the EU more than three years ago.

At the start of this month a euro was worth about 92p. Before the Brexit vote in 2016 it was worth about 77p. The shift has meant the actual cost of cars bought in sterling by consumers in the Republic a fall of more than 10 per cent. This can equate to a cash saving of more than €3,000 on a high-end used car.

While there are savings to be made almost across the board, people spending comparatively small sums of money stand to benefit the least. A motorist with up to €12,000 to spend might save €500 by buying in the UK. The cash savings might not be great but the likelihood is that the buyer will end up with a higher-spec car.

A motorist who is looking to spend between €12,000 and €20,000 can expect to save around €1,500 while motorists looking to spend more than €20,000 will see the biggest savings.

A Lexus hybrid that might have had a ticket price of €120,000 in the Republic two or three years ago might be found on the second-hand market here for €80,000. The same car in the UK might end up costing about €70,000 if sourced in the UK – and that is with the VRT factored in.

By any measure such savings are not to be sniffed at. But while there is certainly deals to be found when importing, car mistakes can be made – with people who leap before they look most likely to find themselves in serious trouble.

It is a fact that when people are under time pressure and forced to act they tend to make errors. Scam artists and dodgy sales people worldwide know this which is why one of the key indicators of a scam is when the people behind it try and put undue pressure on the victims to act fast without thinking things through.

People in the market for a new car sometimes do that to themselves and an overeagerness to buy is how a lot of Irish motorists come undone.

It is easy for people to put themselves under real pressure to buy a car on a certain day in a certain place because they have travelled a long distance to get to a showroom, have probably taken time off work to be there and spent a few bob on the ferry or plane ticket.

Understandably they don’t want all that time, effort and money to go to waste by coming home empty-handed. So they end up buying a car that may not be right for them.

When you buy a car privately you can expect to pay less than if you buy it off a recognised dealer

An equally big mistake many people make when it comes to buying an import is to go for the cheapest car on the market. Searching out bargain basement deals frequently leads to the dodgiest of dealers.

As in this country, when you buy a car privately you can expect to pay less than if you buy it off a recognised dealer. But while the car might be cheaper there is little or no safety net should things go wrong. And the risks are dramatically exaggerated by the cross-border nature of the transaction.

By buying from a franchise car dealer, a consumer gets certain guarantees and the likelihood is that the warranty will be transferred from that jurisdiction to this one. There is no chance of that happening if you buy off a second-hand dealer or if you buy privately, particularly if you have not done due diligence before making the purchase.

The next mistake that is made is not doing due diligence on the car being bought. Pricewatch has frequently written about the problem of clocked cars for sale on forecourts across Ireland. It is a big problem here and it is a big problem in the UK too. It is very easy to run a check on a car being bought to see if it has been clocked, or written off or has financing issues.

Websites such as motorcheck.ieand cartell.ieshould be used as a matter of course by any would-be purchaser. A few minutes checking and a few bob spent on a report could save a whole lot of heartache further down the line.

Checklist for buying that used car

The first thing you need to do is decide on a budget and a model and spec of car that you want and then stick to it.

Then you need to start comparing prices. Open a couple of Irish car websites and a couple of similar websites based in the UK. When you are making the price comparisons, make sure to compare like for like and only match cars that are selling in dealerships here with ones that are selling in dealerships there.

Do the currency conversion and give yourself some wriggle room when doing so to allow for fluctuations between the moment you see the car and the moment you hand over the cash. Always err on the side of caution. Based on rates when Pricewatch last checked, £20,000 worked out at €21,935. So when we are doing the maths we’ll round it up to €22,500 just in case sterling makes an unexpected recovery.

Once you have found the car selling in an established dealer – and we can’t stress that enough – make contact with them and work out some of the finer details about warranties and price and all the rest. Have them reserve the car for you. Do not commit to buying it.

The closer the dealership is to Holyhead, the easier it will be to get it home and bear in mind that cars from the south of England – where it is warmer – tend to have less of a problem of corrosion than cars from the north where they have probably been driving over salted roads for longer.

Before you do anything further work out the final price. Add the sale price in the UK and the VRT that you will be liable to pay when you bring it home. The Revenue website ros.ie is easy to navigate and once you know the make, model and spec of the car you are buying, Revenue will do the work for you.

But the addition does not stop there. Make sure when you are totting up the figures, to include all the costs associated with getting you to the UK and getting you and your car home. Add on the the cost of taking time off work and the cost of getting a car’s history checked. If you want to be further assured that you are not making a mistake arrange for a mechanic in the UK – perhaps someone from the AA – to give the car the once over before you buy.

It is only at this point that you should travel to see it. And always travel knowing that it might not work out. Be prepared to walk away if it doesn’t feel right. Better to lose the couple of hundred quid it cost to get you to the UK that thousands after make the wrong purchase.