Make the most of Brexit and save money by importing your car
There are real savings to be made on a used vehicle by taking advantage of the recent lower exchange rate
Published 25/08/2016 | 15:22
The level of new-car sales is one of the key indicators of recession, and the end thereof. With over 134,000 cars carrying shiny new 161 or 162 registration plates, there seems little doubt that we have finally turned a corner in them.
But, for many people, a second-hand car is just as important a purchase, whether they’ve saved up for years or borrowed to buy. With the fallout of Brexit resulting in a collapse in sterling, many will be tempted by the lower exchange rate to import from the UK. To the end of July, 37,952 used cars have been imported, a 29pc increase on the same period last year.
Alan Nolan is director general of the Society of the Irish Motor Industry (SIMI). “During the years 2009-13 very few new cars were retailed in Ireland so there has been a shortage of supply of Irish-registered second-hand cars of those ages and the bulk of the used imports are in that age-group”, he says.
This, along with other economic positives, mean that imports, particularly among older cars, is likely to increase. “This year 56pc of imports have been over five years old, while 22pc were over eight years old”.
While many bag a bargain, it’s not an endeavour to be undertaken lightly. “The best advice to consumers buying any used cars is to know as much as you can about who you are buying from and know as much as you can about the car you are buying, before you actually buy”.
All of this is in addition to having the car technically assessed or at least checked by a competent person. “For buyers considering importing a car, or buying one that has been imported, the issues are exactly the same but the risks are increased if you do not know who you are buying from and particularly if you are not buying from a professional ethical business that should be prepared to resolve any problems that may arise,” says Nolan. “It is vital that consumers check the history of the car that they may wish to import as you need to reassure yourself, as far as you can, that the car was not crashed, written-off, has been clocked or has outstanding finance etc. Although checks are not 100pc accurate, they will at least help to reduce your risk”.
For those who do decide to take the plunge, just what is involved in importing from Britain?
There are four responsibilities for buyers when they return: Pay Vehicle Registration Tax (VRT); fit new registration plates; get appropriate motor insurance and motor tax.
Of these, VRT is the first, and most vital. It will also be the most expensive, so it is worth doing your sums on this alone before deciding if your ‘bargain’ is, in fact, one. Also, factor in the cost of physically getting to the UK, and bringing the car back on the ferry.
VRT is payable for the first registration of any car in Ireland. It is assessed at NCT test centres (you can make an appointment) and is based on a percentage of the Open Market Selling Price (OMSP). Rates for domestic cars range from 14-36pc, and are calculated on CO2 emissions along with make, model, year and condition of the car. You can get an estimate of the likely VRT on Revenue’s website (revenue.ie) and there is an appeals process if you disagree.
There are different scales for motorcycles, classic cars, vans and commercial vehicles.
VAT is also payable if the import is a new car (defined as under six-months-old, or with less than 6,000km on the clock). It is payable even if VAT was already paid in the country of manufacture, so is often not worth the extra and this is why the bulk of imports are second hand.
New, Irish-compliant registration plates must be fitted within three days of VRT being paid. As the UK plates are so distinctive, it is highly likely you will be challenged if you drive around for any longer with them and severe penalties, including impounding of the car, are in place.
Naturally many people worry about paying a garage abroad. While you can use a sterling bank draft, or inter-bank transfer in advance, you will pay hefty charges. A cheaper option is a third-party currency exchange specialist. Barry Dowling, co-founder of TransferMate Global Payments is one. “The primary benefit is that you can pay once you are in front of the car and happy that you are getting what you paid for and save money through better exchange rates”.
Dowling advises buyers to visit car dealers early in the morning and once they are satisfied with the car, to organise a same-day payment to the car dealer. TransferMate use local bank accounts in Ireland but, more importantly, bank accounts in the UK to ensure same day payment.
He adds: “More often than not, Irish banks apply high transfer fees for same-day payments. However, because we don’t do this we can save people over 70pc on the transfer fee and offer lower fees and better exchange rates”.
The same rules apply when buying a car there as here, of course. Having a mechanic with you to do more than kick the tyres can be a good investment; likewise getting a full service history and mileage check makes sense. It’s caveat emptor, twice!
‘I spent on travel but it was worth it’
Finola Cooke decided to import her 2014 Prius plug-in Hybrid from the UK after a friend saved money doing the same. She paid Stg£31,000 (€37,290), saving €3,000 on the same model here, despite VRT of €2,818.
The Waterford accountant did her sums first.
“I used the same garage which had given great service, and cars are in better condition due to the good roads in the UK; there’s also more of them for sale. The travel cost a few hundred euro, but it was worth it”.
One of her concerns had been payment. “I had been worried that I would have to transfer money ahead of the transaction but by using TransferMate I was able to transfer it after I had actually checked it out
and was completely happy with the car. The money I saved on bank charges was an additional bonus I wasn’t expecting”.
She found the registration process smooth and would “definitely” consider doing the same thing next time. “It was so straightforward”.