Motor Tax Bands


Can't say I know for sure and can't put my finger on anything in writing, but this is my understanding - and the understanding of friends/work colleagues too.

If so, under my system of car buying, changes won't affect me until about 2013 ish.
 
Bad deal for those who have agreed a deal for low emmissions new car for Jan.
 
upport said:
Bad deal for those who have agreed a deal for low emmissions new car for Jan.
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On the current conditions, yes, definatly. (It gets worse as given the changes, very few people will buy a new low emission car this side of July, so prices for these may drop to increase sales in the first six months of '08 - IMHO)

However, these things can change very fast. Who knows when these rules may be updated/changed to include all cars.
 
One solution would be to tax (road tax) 08 low emission cars from January onwards as per CO2 emissions and older cars on their renewal date.
 
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doesn't seem unfair that someone driving a low emission car prior to july next year continues to pay a higher road tax. perhaps if they offered a 'choice' to owners of cars registered prior to july next year which system they wished to be taxed under it would solve the problem. higher emission owners would opt for the current system, low emission for the new system. strikes me, and I am not in any way a legal eagle, that it cannot be right that two people driving the exact same car, with the exact same emissions pay two different rates of tax for said car. I do understand that it would be penalising someone who purchased last year to have to switch to the new system if it were to cost them a lot extra in road so maybe a 'choice' for such owners would solve the problem. probably too simple a solution for civil servants expecting another bonanza from benchmarking.
 
Very good point cuchulainn - a person who bought into eco-friendly / low emmission motoring in the last 12 months is now being penalised for being pro-active.
I'm wondering who is best to contact to try and have this "anomaly" rectified - as you suggest, maybe giving people a choice etc...
 
Excellent point dave28.I'm sending an email to Brian Cowan today suggesting that the new legislation should be implemented from 1-1-08 for low emmision new cars and that existing low emmision cars be given a choice on renewal.Contact:minister@finance.gov.ie
One e-mail will make no difference but if lots of people support this idea and contact Mr Cowan then the Government might realise that their otherwise laudable attempt to combat environmental issues could be implemented in a more constructive and customer friendly manner.
 
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Will all this cause a huge surge of second hand cars been imported from UK from next july to avail of the reduced tax rates?
 
As many users have spotted, it would seem that the new motor tax rates are unfair to those of us who have purchased low emissions cars (i.e. most diesels, hybrids & small petrols) in the past 2 years or so. We will continue to pay the old high rates based on engine size while the same make and model registered after 1st July 2008 will benefit from substantially lower rates.

This is especially unfair if used cars imported after 1st July will be taxed under the new system. I haven't seen any detail published by the minister on this point, but from what's published in the media, it seems that this is likely to be the case. This will lead to situations where identical cars are taxed at very different rates which will definitely cause the resale value of currently reistered low emissions cars to suffer. This seems like a strange way for a "green" minister to treat people who acted responibly and chose to buy a clean car.

I agree with the comments of other members - the only fair solution to this is allow people to choose which system to tax thier cars under after July 1st. High-emissions vehicle owners will opt for the old system which is cheaper for them while low emissions car owners will be much better off on the new system.

If you already own a low-emissions car (i.e. most diesels, hybrids & small petrols), this affects you. You should make your views strongly known to the minister (minister@environ.ie) and ask him to rectify this anomaly.
 


I agree with you that it effects the current 2nd hand diesel market (not so sure on the 1.2L -> 1.4L small car market, the emissions versus cost seem to be about the same under new and old systems),

however, I disagree that higher-emission cars should be allowed to choose their tax system ... surely this new system is targetted directly at the higher-emission cars

and you are not necessarily giving people any 'choice' -> everyone would of course pick the cheaper option

I don't agree 100% with the new system, but I can certainly see the point of it; and it was always going to be introduced at some stage. Cowan announced it would happen in last years budget.
 
I was a tad irate when I first posted about the unfairness to us people who bought oil burners in the last few years. It appeared badly thought-through by the minister. The people who it hurts are those people who bought environmentally-friendly cars and who probably voted Green Party in the last election. Someone who recently bought a 2.0l petrol actually benefits under the new system due to the effective appreciation of their car after July 1st. These purchasers were less likely to have voted Green and probably wouldn't in future elections. I suspect they voted FF but that's for another thread. The Greens would be consciously disenfranchising their own voters.

It's highly unlikely that even Minister Gormless didn't anticipate this scenario in advance and it's quite likely he's treating motorists and civil servants the same as putting a frog in hot water. Come July, he'll have gotten the new car tax system in place without the large amount of environmentally unfriendly owners complaining because it won't affect them. Current Green drivers will grumble a bit but are only 9.5% worse off compared to the previous year so they are unlikely to march on the Dail. Next November's budget will contain the first phase of extending it to older cars, possibly by a few years at a time. The number of possible complaints will be less this time next year as some people will already have changed.

Given a choice of taxing a second hand 1.9 "daysel" over the next five years or a second hand 1.6 petrol I'd choose the former.
 
Market effects of new tax bands.

One of the relevant points the department insisted when asking for submissions is that changes be broadly revenue neutral.

These bands, both for road tax and VRT, have been calculated to deliver the same amount of money to the coffers from the punters. So the estimates will have presumed that if some new cars will be cheaper, others will be more expensive to make up the deficit.

So it is naive to imagine they will allow people to pick the cheaper tax system, depending if they are advantaged/disadvantaged.

The whole system is geared to encourage or coerce people to opt for less polluting vehicles and you have to respect that. However it will mean there will be plenty of anomalies to create headaches for the motor trade.

In particular the economical cars registered before July '08 will be stuck with the old higher road tax, and this will cause faster depreciation. Much faster. Second and third owners are much less forgiving of a high yearly road tax, maybe because they can't afford as much as the owner who bought new. Watch how little a dealer will offer to take a trade in of a high tax car!!

Another area that has potential for disaster is the cars that just manage to be above 225g/km. These will see yearly tax jumping from a potential €1000 to €2000. Again, the real headache in this will be the potential depreciation. All cars in this upper bracket can expect to drop in value like a stone.

Having checked over the CO2 figures for the present batch of cars, one future trend immediately jumps out. New car buyers who don't want to suffer this new artificial depreciation will have to strongly consider smaller diesel engined cars. The likes of 1.3, 1.4, 1.5, 1.6 and some 1.8 turbodiesel cars will wipe the floor with the rest.

I'm glad I'm not a new car buyer.

 
The changes in tax will not make that big a difference to second hand car prices - Isin't the new system been phased in to all cars over a period??
 
No Ceatharlach, I don't think so. It comes in with a bang in July.

What I mean is the new low CO2 cars[assuming the dealers pass on the VRT savings 100%!] will be cheaper than the pre-July registered ones to buy. This will instantly depreciate the older cars.

In addition, any older car [even one 6 months old] will carry the handicap of a higher road tax from the old system, so second hand car buyers will pay less for those cars at trade-in time.

It's a double hit, lose-lose as they say. If I was a Green voter [I'm not!] with an economical car I would be very unhappy.

 
Re: Market effects of new tax bands.

alcyone said:
So it is naive to imagine they will allow people to pick the cheaper tax system, depending if they are advantaged/disadvantaged.


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I am talking talking specifically about people who in the last few years bought an eco-friendly, low-emissions vehicle (as the Green Party would have encouraged) and will now be stuck with a more expensive annual motor-tax.
We will have a ludicrous situation next July whereby a person who bought , for instance, a Toyota Prius last year will be paying 3 times the road tax that a new Prius owner will be paying.
I will be sending that e-mail to both Ministers !!
 
Re: Market effects of new tax bands.


You are right Dave. Send the emails.

My heart goes out to Prius owners. They should take comfort in the fact that while a few hundred of them are paying 3 times the [fairly low!] road tax they might be paying, that hundreds of thousands of tiger economy suv owners will be paying at least double the annual road tax than they were used to!

 
Re: Market effects of new tax bands.


Actually there's no comfort in this. Existing large SUV owners will continue to pay the rate of motor tax which applies now. It will be much higher for anyone buying a large SUV after July 1st, but for those who already have them (or buy them before July), there's no penalty. At least these people have the choice not to buy another SUV if they don't want to be hit by the higher tax. Conversely those of us who have already opted for low emissions motoring will suffer large deprecaition due to our vehicles being stuck on the higher tax rates.
Ironically, the "greener" the car, the more dramtic the effect will be (for existing owners). The worst affected cars (in order of impact) are as follows:

(1) Small hybrids (e.g. Toyota Prius).
(2) Low emissions family diesels (Skoda Octavia, Toyota Corolla D4D, etc)
(3) Small Petrol cars (Punto 1.2 , Polo 1.2) - effect is less significant here though.

We must also remember that it seems that used cars imported after July 1st will be assesed under the new system - this will serve to increase the impact of depreciation on existing Irish-registered low emissions cars.

I know that there was always the intention to maintain the tax take from motoring, but there's no need to do it in a way which will unfairly depreciate the value of low emissions cars. Not enough people know about the implications of this yet - there is a need to make people aware. I would encourage pep.ole to start writing to the minister, the newspapaers and to the AA. Also, it is likely that green voters will be most affected by this - make your views known to the green party also. It amazes me that it was their minister who introduced this.
 
Re: Market effects of new tax bands.


Why are you amazed?

All Green policies are High Tax policies always were and always will be.

Is there anyone from the car trade that would like to comment since they made representations via S.I.M.I. to the gov.?
 
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