Bonanza for dealerships in North as drivers rush to bag a bargain
Car buyers are making a break for the Border, hoping to bag last minute pre-Brexit bargains amid political turmoil and confusion over what will happen to car imports after March 29.
Dealers in the North saw a spike in cars sold to southern buyers in recent months and describe an "unprecedented" surge in the first weeks of this year.
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Imported used cars totalled a record 100,755 last year - a hike of 7.8pc on the 2017 figure, and more than double the 47,774 in 2015.
At the same time, new car registrations in the Republic were down 12.6pc in January this year compared to last.
The bonanza on car imports began the day after the referendum in June 2016 when sterling plummeted 8.5pc overnight - within three months, the currency's decline had reached 18pc.
Car traders imported large numbers of cars from Britain to sell on, but the majority of private buyers chose to take the short trip North to get their cars.
Now, despite sterling experiencing modest gains last week, the number of car-buyers heading North has stepped up a gear due to Border uncertainties and fears of tax being added to imports after Brexit.
David Anderson, director of operations at John Mulholland Motors, a dealership in Derry and Co Antrim, said: "There is a feeling of urgency from buyers this January compared to last.
"People don't know the outcome of Brexit, so they are thinking 'just buy now'."
Charles Hurst Group, one of the North's largest dealerships, saw a 20pc rise in inquiries from the south in January. Sales operations director Jeff McCartney said: "People are doing the maths and seeing they can save around £3,000 (€3,425) on the average family car."
So lucrative is the market on exports to the Republic that Northern dealerships are sending video tours of the cars to potential buyers and offering lifts from train stations to forecourts, so new owners can drive their car home the same day.
The boom in cross-border trade is having a big impact on the car market here, with a drop of 4.4pc in new cars registered in 2018.
Society of the Irish Motor Industry director general designate Brian Cooke said: "New car sales were over 140,000 in 2016 - with economic growth we would have expected that to grow to more than 150,000, but instead we had 135,000 in 2017 and 125,000 in 2018.
"Used imports less than two years old are being bought as direct substitutes for new cars, and the sterling exchange rate has devalued Irish used cars."
Private buyers need to factor in hefty VRT costs, which can add thousands of euro on top of the price of a car from the UK. Revenue has an online calculator which can tell buyers how much VRT they can expect to pay, with charges based on emissions and what Revenue deems to be the value of the car - often much higher than the actual price paid.
Used cars are not liable for additional VAT, but some buyers get a nasty surprise when they realise Revenue regards any car which has been in service for less than six months or has less than 6,000km on the clock as a new car, and charges 23pc VAT on it. The buyer is entitled to seek a VAT refund from the UK to avoid double taxation.
Some 40pc of used cars from the UK are over five years old, and tend to have higher emissions than new cars. The motor industry has used this to campaign for a ban on older imports, with Nissan claiming it would prevent the displacement of over 66,000 new car sales in 2019, generating €400m in new tax revenue.
An increase of 1pc VRT was added to diesel cars at the start of the year, but with the demonisation of diesel in full swing in the UK, the price of used diesels there has dropped 10.3pc, while the price of used petrol cars rose by a similar figure.
Environmental incentives have led to a greater uptake in electric and hybrid cars here, with 811 bought in January compared with 1,233 for the whole of 2018.
However, with savings to be made, diesel sales remain buoyant. Mr Anderson, of John Mulholland, said: "There is still a place for diesel, particularly among rural buyers."
Those with more cash to splash are getting a higher spec, and research by Fexco Corporate Payments showed the average vehicle imported from the UK cost €21,612 - up €5,478 on 2017's figure.
And then there are the lucky few seeking luxury models that aren't available in Ireland. Mr McCartney, of Charles Hurst Group, said: "We have sold a considerable number of the new Bentley GT to the South."