Sunday 25 February 2018

How tax helps create two-tier safety system for car owners

Government drives up price of safer cars by charging VRT and VAT on 'life-saving' technologies

The price of safer cars is being driven up.
The price of safer cars is being driven up.
Intelligence Safety Assistance (ISA) could reduce accidents according to experts.
Eddie Cunningham

Eddie Cunningham

Wehave a two-tier safety system for car owners.

There are two reasons for that.

First and obvious: if you have the money you can buy bigger cars with lots more safety technology.

Secondly, our taxation system can put increasingly important items beyond the reach of most family-car buyers by charging Vehicle Registration Tax (VRT) and VAT on what many regard as basic and potentially 'life-saving' devices.

Obviously, every item on a car contributes to its cost - be it comfort, performance or safety.

Most cars today have a spread of safety devices and appliances that are either mandatory or included by makers to be competitive in the market place.

But as each item is added, the meter is running on VRT and VAT too.

It means that elements such as the airbags in your car, ABS and so on all attract a tax charge, either directly or indirectly.

That is how the system works and has done for a long time despite some energetic campaigning back through the years.

It might be seen as a trifle gauche in some quarters to call that a tax on safety but that's what it is.

However, it is being brought into ever sharper relief, of late, with the advent of truly sophisticated technologies that intervene to make cars safer to drive because they can influence events and avert accidents. These technologies range from alerting you that you are dangerously close to the car in front, to applying the brakes and swerving for you if the system deems it necessary to take action.

The level of sophistication increases by the day, with semi-autonomous driving now on some larger cars.

While all contribute to safety, one development in particular appears to have gained universal backing as a potential life-saver.

It is called Intelligent Safety Assistance (ISA). International experts I've spoken with say it could reduce accidents, injuries and deaths by between 20pc-30pc - immediately. They want the EU Commission to fast-track it as mandatory on all new cars.

The basic idea is simple. A camera on the windscreen picks up on speed-limit signs.

The system uses this information to control the flow of fuel and power to the engine to ensure the car does not exceed the limit.

I've driven a car in Dublin and Kildare with ISA on board and it does work. I pressed hard on the accelerator but the car did not respond because it was obeying the speed limit. I could (and did for research purposes) jam my foot heavily on the accelerator and that 'broke' the chain of command. But you really would want to be acting the idiot, or in need of instant safe acceleration, to do that.

The car I drove with the system was a Titanium trim Ford S-MAX people carrier (that's me at the wheel in the picture). And yes, I was surprised. It's standard on that top-of-the-range model but would cost €660 (inclusive of VRT and VAT) to have it put on (lower-spec) Zetec versions.

To have the cruise control system (a necessary prerequisite for ISA) added to a Zetec S-MAX 2-litre TDCi 150PS, for example, would cost €660. Of that total, VRT comes to €107 and VAT amounts to €127. I make that €234 in tax alone on one safety item. See what I mean about two-tier?

And as the VRT element is calculated on emissions, a car with higher CO2 would have an even higher price for the safety equipment. I'm not saying the tax burden is so heavy that it is an unequivocal deterrent.

But with so many passive and active safety bits and pieces now in our cars, the cumulative effect could be the difference between buying a car with fewer or more safety items as standard. That's how two-tier systems operate. Money and tax mean safer cars for those who can afford them.

It doesn't make them better drivers but, all the experts agree, it significantly reduces the likelihood of accident and injury.

What do you think? Does it matter that much to you?

Let me know at:

Indo Motoring

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