Business Personal Finance

Saturday 17 November 2018

Bargains over the border

You could save thousands by buying your car in the North, so perhaps it's time to venture up there, writes Louise McBride

IF YOU like nothing better than to power through muddy country roads in a large jeep or landcruiser, your carbon footprint is probably the last thing on your mind.

You could get a wake-up call this July, however, when the new car tax system comes into play. From that month, the amount of vehicle registration tax (VRT) paid when you buy a new car or import a car into Ireland will depend on its carbon dioxide emissions. The lower the emissions, the lower the VRT.

But if -- like many a jeep or landcruiser -- your car has a four-litre engine or more, you're likely to be hit with a heftier VRT bill than before.

Engines of this size could easily emit more than 226g of carbon dioxide per kilometre -- an emission level which will attract a VRT rate of 36 per cent.

Currently, the top rate of VRT -- which is paid when a car is first registered in the Republic of Ireland -- is 30 per cent.

Owners of gas guzzlers are unlikely to ever avoid hefty tax bills. If you bought a jeep recently, you could have already paid €50,000 in tax. With tax bills like this -- and larger to come for those with high carbon footprints -- you might consider a trip to Northern Ireland.

If you live in the Republic, you could save thousands of euro by importing a car from the North. The best savings are usually made on high-performance or large cars rather than smaller cars. Indeed, you could save as much as €25,000 by importing a car from the North, according to a study by the Sunday Independent.

Although such savings sound tempting, choose your dealer carefully -- otherwise any savings made could soon run dry.

"The biggest problem with importing cars from the North and Britain is in after-sales and differences in manufacturer guarantees," says Tina Leonard, manager of the consumer lobby group, the European Consumer Centre.

"A manufacturer's guarantee might last for three years in the Republic, but only two years if the car is bought in the North," she adds.

If you find mechanical faults with your car after you buy it, and you bought your car from a dealer, the seller has a legal obligation to fix your car, depending on your warranty and how long after you bought the car that the problems arose.

However, if you are living in the Republic, it may not be convenient or possible to drive your car back up to the North for repairs.

This can cause practical problems, particularly if the seller refuses to cover the cost of repairs in your local garage.

"The seller has to pay for the problem to be remedied, but they are not obliged to remedy the problem locally," says Leonard.

"If the car is new, you may be able to hook up with your local dealer to get the car fixed and the seller may cover the cost. But if you import a second-hand car, this can be a bit more difficult. It may be a lot cheaper for the seller to repair the second-hand car in the North rather than in the Republic and the seller may therefore be reluctant to pay for your local garage to fix it."

Be careful if buying your car privately as such transactions are not covered by consumer legislation.

If importing your car from the North, choose a reputable dealer. Like any major purchase, do your homework. If buying a second-hand car, hire a mechanic to check out the car. Check the terms of the car warranty. Tell the vendor that you are importing the car into another jurisdiction.

"Whether bought privately, or through a dealer, you should always check the number of previous owners, and find out whether there is any outstanding finance owing on the car," advises Leonard, who ends with some words of warning: "Don't rely on the verbal assurances of the seller. Get everything in writing before you pay anything."

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