WITH LESS than a week left before the new emissions-based tax regime comes into effect, a new survey doesn’t offer much comfort to the car industry.
The survey compiled for GE Money by RedC shows that while the motor industry is hoping for a much-needed sales boom from July 1st, 53 per cent of those surveyed said the new changes would have no impact on the likelihood of them buying a new car, while another 32 per cent said it meant they were less likely to buy a new car.
That’s not good news for a new car market down 15.5 per cent at the end of last month. Many in the industry are hoping some of the sales downturn is due to potential buyers postponing their purchases until the introduction of the new emissions-based VRT and road tax regime which comes into effect on July 1st. Commenting on the findings, Nigel Rutherford, head of auto finance at GE Money Ireland said: “Confusion around the new tax system has created uncertainty among consumers looking to buy a new car and this has contributed to a drop in sales compared with last year. As the changes are predicted to flow on to used car values, they will influence purchase decisions right through the early part of the traditional car buying season in the early months of 2009.”
In the used car market, the majority of those surveyed believe the new tax regime will have little impact on their motoring lives.
The survey found that 54 per cent of car owners are not concerned about the impact of the changes on the future price of their used cars. Rutherford attributes this lack of concern to be “primarily an issue of awareness”. “It remains unclear how the changes will work their way through into used car prices,” he says, “but the full impact on resale values – be it positive or negative – will only be realised when consumers look to sell their cars.”
The survey has more positive news for the sellers of more eco-friendly models. Of those surveyed, 46 per cent said they were likely to buy a flexifuel as their next car, while 39 per cent said they were likely to buy a hybrid. Rutherford assesses these as the impact of rising fuel costs. “Consumer attitudes are being affected by increasing petrol and diesel prices and this will feed into demand by motorists for smaller cars and vehicle technologies offering more fuel-efficient motoring,” he says.
On the issue of road tax, 57 per cent of respondents said that the new emissions-based system should apply to all cars not just new ones. Initially the tax applied only to new cars registered from July 1st, but the Government rolled back the date to January 1st of this year and allowed motorists with cars registered in the first six months of the year to choose which system they wished to apply.
The GE Money/RedC survey of 1,006 Irish adults was carried out from June 2nd-4th.