Drive to kickstart car sales with new 'swappage' plan
THE Government will be asked to bring in a 'swappage scheme' for owners of middle-aged cars in a move aimed at kickstarting sales in the motor industry.
The plan is being put together by the motor industry, in the hope of restoring a more normal buying cycle.
It would mean motorists getting a vehicle registration tax (VRT) rebate when they trade in against a new model.
The amount involved is likely to be linked to the age of the car – possibly from five or six years upwards – though this has not yet been worked out.
Still at the early stages of development, the 'swappage' plan is being structured so it wouldn't cost the Government a cent. Indeed, sources say it would generate hundreds of millions of extra revenue in VAT and VRT for the Exchequer if given the green light. Crucially, it would mean owners of middle-aged cars would not have to pay as much for their new vehicle.
The plan will not be ready for the new 132 registration period from July 1 but, if accepted, could be in place after the Budget in October, for the more traditional start-of-year January sales.
Society of the Irish Motor Industry (SIMI) chief Alan Nolan declined to comment when asked by the Irish Independent other than to say they were in the early development of putting something together.
The Irish Independent understands from a variety of sources, however, that a standalone, revenue-generating 'swappage' deal is being readied with a view to submitting it to Finance Minister Michael Noonan.
Sources say that under the plan, the amount of VRT rebate would be linked to the age of the car. Details of how old the car would have to be and how much the VRT rebate would come to are uncertain as of now.
Another source said the plan would have to be seen to create a significant tax revenue incentive for the Government for it to have a chance of getting backing.
Sales this year are heading for a miserly 68,000 but even that figure masks an implosion in real retail buying. When pre-registrations, rentals and company car purchases are excluded, the number of private buyers is likely to be under 30,000 – a level that can't sustain an industry.
The 'swappage' plan is directly targeted at getting private owners to trade in and buy new. As an indication of how old so many cars have become, only 460,000 of the 1.9 million or so cars on the road are under five. In 2007, the number of cars aged five or under was 850,000.