Ireland Adds Vehicle-Registration Period, Hikes Taxes

The Irish new-car industry cheers as the government announces a move to two vehicle registration periods a year.

New vehicles next year will get a registration plate that includes a 131 number for the first six months and a 132 plate from July.

Society of Irish Motor Industries President Alan Lyons calls the introduction of the new registration period good news for the industry.

“For several years, we have been highlighting the problem of seasonality in our industry, where 80% of new cars are sold in the first half of the year, forcing garages to reduce staff because of lack of business later on in the year,” Lyons says in a statement.

The sales are tilted because buyers opt to get a new vehicle when the annual registration plate is newest.

Until now, an Irish registration plate has carried a 2-digit number for the year of registration followed by a 2-letter county identifier and a sequence number, starting with the first vehicle registered in the county that year.

Registration remains fixed on the vehicle for its full life and cannot be transferred to other vehicles.

“While we may not see a significant change in buying patterns in its first year of introduction, the new plate will have a hugely positive impact on the industry in the long term,” Lyons says.

The government also delivers bad news to the industry by raising the vehicle registration tax and road tax.

“We warned the government that now is not the time, and it is certainly not the time to increase both,” Lyons says. “The motorist is already paying enough tax to be on the road and new-car sales are down 10,000 on last year.”

SIMI long has argued more government revenues would be generated by increasing car sales, not taxes.

“The (vehicle registration tax) increases should deliver about €50 million ($64.7 million), but this amount could be generated from the sale of just 6,000 extra cars and would also support 800 extra jobs, which would save the government almost €20 million ($25.9 million),” Lyons says.

SIMI says the sale of a new car generates about €7,700 ($9,951) in VRT and value added tax.

VRT reductions for electric vehicles of up to €5,000 ($6,467), plug-in hybrid electric vehicles of up to €2,500 ($3,233) and hybrid and flexible-fuel vehicles of up to €1,500 ($1,940) are being retained another 12 months to December 2013.

The annual road tax on EVs is reduced to €120 ($155) from €157 ($203).

The Irish Independent newspaper says the annual tax on the average family car will climb to more than €500 ($646) for the first time.

Owners of the most common family cars, those powered by 1.6L engines, will see a 7.5% rise from €478 ($618) to €514 ($664). The biggest increase in road tax is for owners of pre-2008 models with 3.0L engines, up from €1,683 ($2,176) to €1,809 ($2,340).