Monday 24 July 2017

Drive a bargain when shopping for a second-hand car

Experts believe that it is still cheaper to import a second-hand car from the UK or the North, even taking VRT into account, but be careful you don't pay over the odds, writes John Cradden

John Cradden

IF you are one of the many thousands of motorists who sourced a used car from the UK in search of better value over the last few years, the chances are you got a bargain.

Thanks to the long weakness of sterling against the euro, the price-inflating effect of Vehicle Registration Tax (VRT) on used car values in Ireland, and the lower prices (and wider availability) of used cars in the UK, the rate of used-car imports from across the Irish Sea soared from slightly fewer than 14,000 a year in 2003, to a peak of more than 60,000 in 2008.

Widespread anecdotal and media-survey evidence suggested that buyers could reasonably expect to save around 20pc or more on the price of an equivalent car in Ireland.

This is even taking into account the VRT that must be paid when re-registering the car, among other expenses.

However, in the past two years a couple of things have changed for the Irish used-car market that have made UK used-car imports less attractive.

The first is that sterling has strengthened against the euro, while the second is that used-car prices in Ireland have fallen (some say in response to the number of cheaper imports).

Prices

A third factor, according to motor-trade sources, is that used-car prices in the UK have hardened a little.

"Part of the problem is that the UK is fast running out of stock, which means sourcing from over there is not as easy as it used to be and if sterling strengthens, it will be even more difficult," says Shane Teskey of car history-checking website Motorcheck.ie.

But he adds that because of the collapse in new-car sales, Ireland is also beginning to experience a shortage in the supply of good second-hand cars, which he says will become a significant problem over the next two or three years.

"The drop in (new car) sales from 2009 means that used car supply is starting to dry up."

Indeed, figures from the Central Statistics Office, as well as Motorcheck.ie, show that while the number of used-car imports in 2010 is down nearly 40pc on the 2008 peak, they are almost on a par (so far) with figures in 2009, when slightly less than 50,000 were imported.

So, even if the total costs of importing UK cars generally appear to be much the same as the prices of used cars on sale in Ireland, problems with second-hand supply suggest that UK imports will remain a popular option for many motorists here over the next few years.

Indeed, importing cars from the UK is such a part of Irish used car-buying culture that many dealers here have been importing used models from the UK to meet demand.

Many car enthusiasts familiar with the experience of importing a UK used car have been keenly watching changes in the Irish market.

Klaus Gottsche from Galway imported some cars over the past few years, but his last import, a Renault Clio 172 (a hot hatchback), was in 2008.

He says he certainly wouldn't save much on bringing in a car from the UK today.

"You would be hard pressed to find anything like that now, with only enthusiasts like me on the lookout for a clean, well-serviced, well-minded example, or people looking for specific specs like leather and other little goodies in middle or upmarket models," he says.

Mr Gottsche believes many people have become wary of Ireland being used as a "dumping ground" for dodgy, crashed or clocked cars from the UK. He adds that many Irish used cars are now actually a good deal cheaper than in the UK.

"Any petrol-engined car over 1.6 or 1.8 litre, for example, is unwanted because of our punitive pre-2008 engine size-based tax regime and the big swing towards diesel," he says.

But someone who has done the numbers on a UK car import in recent weeks -- albeit hypothetically -- is Bob Flavin, who runs motoring blog Smokerspack.com. Recently, he carefully compared the prices for a 2007 BMW 520d SE automatic, both here and in the UK.

Both cars were in similar condition and mileage. Even taking into account all the costs of importing the UK car, it still worked out nearly €5,000 cheaper than the Irish one. But, he notes that his comparison was made purely on paper.

"The prices of the cars I'm using are the full quoted price," he wrote.

"If you walk into any dealer in Ireland with €22,000 in your pocket, and no trade-in, the price becomes negotiable."

Mr Flavin believes many more dealers here will go out of business because those who would normally trade up around three to four years into their ownership are hanging on to their cars, making decent used cars rare.

"I don't blame the dealers here, because of our frankly crazy VRT, UK cars start off far cheaper than the Irish models."

Irish Independent

Promoted articles

Also in Business