'Swappage' plan to make sense of a new deal on VRT
A PLAN to give buyers and sellers of cars a boost will be officially unveiled today (Wednesday).
Basically, the Society of the Irish Motor Industry (SIMI) will lay out a simple economic argument for what is being called a 'swappage' scheme.
It will ask the Government to reduce the VRT when a car aged five to seven years is traded in against a new one.
On the face of it, that would appear to be an appeal for help for an industry struggling to survive in the middle of a plunge in sales which is threatening businesses and jobs.
But it is less an appeal, more a planned way of stimulating growth.
At its core, as I understand it, is an argument that many ordinary people have not been able to replace their cars as they traditionally would – every three or four years.
As things now stand tens of thousands of these cars are aged between five and seven. They are at the stage where their owners are facing too large a gap between trade-in value and new-car purchase price.
Simply put, a new car is no longer affordable for vast numbers of buyers.
However, were the Government to accede to the idea of giving a VRT rebate where a five-to-seven year old is traded against a new motor, that chasm could be narrowed.
The argument also goes that the commercial activity involved around the sale of the new car and the trade-in would, of itself, provide a boost.
The core of the case is that the Government would benefit from more VRT income from an increased level of buying.
In other words, it would get less VRT for every car bought but would get a lot more in total because there would be an increase in the volume of cars sold.
If the SIMI can convince the Department of Finance on that aspect alone then it will have achieved a lot to show this plan could be of benefit to all.