New cars are being taxed in the Irish auto market; Motor industry say the price could rise upto €6,000

Last updated Oct 8, 2020

Electric vehicle changing on street parking with graphical user interface, Future EV car concept

DUBLIN: The government is considering imposing a new tax on the car market. It has been pointed out that the increase in VRT (Vehicle Registration Tax) as per the recommendations of the Government’s Tax Strategy Group will increase the price of some cars to €6,000.

The tax strategy group says the measures are aimed at curbing the purchase of more polluting diesel and petrol cars. At the same time, the motor industry has come out with a warning that the proposal to increase the tax on new cars will affect consumers. Any such move would destroy the sector.

The car industry warns that thousands of jobs will be lost. Industry insiders say the industry is upset with the rise in VRT. Sales have been stagnant since the beginning of this year. There was little change in that in September. Even so, new car sales are down 26% year-on-year.

“VRT is a regressive tax, it has held us back. Every time VRT goes up, the market goes down,” said Frank Kelly dealer principal at Sheehy Motors in Naas, Co Kildare.

The average tax on a car in the UK and Northern Ireland is just 5,000 sterling. Here it is €15,000.

The government’s 2008 plan aims to have 250,000 electric cars on the road by 2020. But currently the number of electric cars is only 5%. Even globally, the transition from petrol to diesel has been slow.

But now if VRT increases proposals are implemented, the prices of some popular car models will go up significantly.

The Kia Sportage will be priced at €933, the Peugeot 3008 at €1,415, the Nissan Qashqai at €1,457, the Hyundai Tucson at €1,498 and the Skoda Karoq at €2,175.

Emma Mitchell of the Society of Irish Motor Industry (SIMI) says the 2008 VRT change has led to widespread job losses and the closure of several dealerships.

SIMI says that although there are only a small number of electric vehicles on the market, it offers great benefits.

Motorists will receive grants up to €10,000. There will also help to set up electric charging points at home. About 3,000 electric cars have been sold in Ireland so far this year. Sales increased by about 22%. In September alone, 664 electric cars were sold. This is 477% more than last September.