Figures show that the number of used cars that are being imported from the UK has grown rapidly this year. This, of course, primarily comes down to the value currently on offer from the Sterling-Euro exchange rates. The pound has steadily dropped in value over the past 14 months since the Brexit referendum, and Irish car buyers have increasingly taken advantage of the slump.
At the time of going to print, the euro was trading at almost 92 pence. Prior to Brexit, the figure was significantly lower, hovering around 72 pence.
Statistics compiled by Motorcheck.ie show that 53,415 used cars were imported into Ireland in the first seven months of this year. To put that figure in perspective, the same period in 2016 accounted for 38,223 imports (representing an almost 40% rise). That did increase significantly over the last five months of the year, with a final figure of 72,603, demonstrating a major surge from the 2015 total of 47,865.
It is a record number for this time of the year, and represents almost half the figure for new car registrations in Ireland in the same time period.
The most popular imports from the UK include the Ford Focus, the VW Golf and Passat, the Audi A4 and A6, Vauxhall Insignia, Hyundai i30, BMW 5 Series, Mercedes E-Class and the Nissan Qashqai.
Anthony Gaffney, Managing Director of AutoXpress.ie on the Dock Road, specialises in importing used vehicles from the UK. He acknowledged that the current trend has presented Irish motorists with a big opportunity.
“There’s no doubt that there’s great value in the UK post-Brexit, with sterling rates at the lowest we’ve seen in ten years as one of Ireland’s largest vehicle importers,” he told Limerick Life.
However, there are obstacles attached to buying an imported car that motorists should be aware of, and Mr. Gaffney urges motorists not to “get too blinded by low prices.”
While motorists can get more bang for their buck than 18 months ago, there will also be a corresponding dip in the value of their current used car that they are either trying to sell privately or trade in.
Despite the carrot of big savings, motorists can still incur some big costs when it comes to importing a car. Vehicle Registration Tax (VRT) must be paid, which can be anything up to 36%.
Furthermore, there is also the possibility of having to pay VAT. This charge only appears if a car is less than six months or has been driven for 6,000km or less. Add in the costs of taking time off, currency fees, private mechanical / history checks and ferrying a car back home yourself, and you could have another €1,000 – €1,500 added to the bill.
A particularly worrying trend for the industry is the emergence of unestablished car sellers. Anthony Gaffney points to a raft of ‘”newly-created opportunists, going back and forth on the ferries”, who are bringing in one car at a time, and selling them cheaply to the buying public.
This can be a false economy, though, as quite often, they don’t have the experience in sourcing a high-quality car or the infrastructure to properly evaluate it prior to delivery.
“Buying a car is a big investment, so you need to make sure that you’re purchasing a good car as well as a good value car,” he said.
“Working with a recognised, reputable dealer might mean paying a little extra, but at least you will know, for sure, that the car has a perfect, unblemished history, a mechanically sound engine and a comprehensive dealership warranty for peace of mind,” added Mr. Gaffney.
Aside from the devaluation of sterling, there is another major factor behind the influx of used cars from the UK. Diesel sales have dramatically dropped in the British market (May’s figures alone showed a decrease in sales of 20%), as a mixture of bad press and government policy has led to many motorists abandoning their diesel vehicles in favour of petrol or electric counterparts.
UK dealers in turn have slashed prices on their diesel cars, with forecourts knocking off as much as 25% from the regular retail prices for used diesels. While this has been music to the ears of many Irish car buyers shopping in the UK markets, we need to be wary that our own Government may start disincentivising diesel, even as early as the 2018 budget.
However, for the time being, it seems that customers will be wooed by price tags, and 2017 will see in excess of 90,000 used cars imported to Ireland by the year end.