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More used UK cars sold in Ireland than new ones, study finds

The sale of imported second-hand cars from the UK to Ireland is this year outstripping the numbers of new cars sold, a new study has found.

The shift to used imports comes as new car sales in Ireland continue to decline, researchers at UCD’s Michael Smurfit graduate business school and the Marketing Institute of Ireland have shown.

According to the Consumer Market Monitor, authored by Prof Mary Lambkin, used imports will climb to 105,000 this year as the new market falls to 104,000.

“The latest data represents a significant blow to the Exchequer and the motor industry as tax revenues from lower sales and dealer profit margins continue to fall,” Prof Lambkin said.

Although the take-in percentage terms are roughly the same to the Irish exchequer, the value of new cars is significantly higher, Prof Lambkin said.

Pictured is a British (GB) Number Plate, United Kingdom. (Photo: Sam Boal/RollingNews.ie)

The tax take from the motor industry is still standing almost €600 million off the boom-time peak of €1.4 billion. In 2018, receipts from vehicle registration tax, which also encompasses VAT on new cars, totalled €820 million.

“One of the reasons for that is that while the car sales have recovered, second-hand sales have grown much faster than the new ones, so revenue per sale is getting less than they were in the good old days,” said Prof Lambkin.

Sterling weakness has been attributed as one factor contributing to the extent of secondhand car imports from the UK.

“Here we see Brexit playing out in full technicolour, but nobody seems to be talking about it,” Prof Lambkin said.

Audi car garage in Kildare (Photo: Eamonn Farrell/Photocall Ireland)

The Society of the Irish Motor Industry (Simi) has suggested that the average tax take on a new car is about €10,000, while it is €5,000 on a secondhand vehicle, resulting from the value of the car being lower and no VAT being paid in Ireland.

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At its peak in 2000, the car market here topped 230,000 vehicles. Since 2016, new car sales have declined steadily from 146,545 to 125,654 in 2018, with sales dropping almost 8 per cent so far this year.

Imported second-hand vehicles registered for the first time, however, continue to rise – from 72,153 in 2016 to 100,755 in 2018.

So far this year, 43,224 used passenger cars have been imported, a jump of 2.17 per cent on the first five months of last year.

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