[Article] Irish Independent Alleged VRT Scam

r3nu4l

Article here. You can register free to read it.

Basically this article claims that many dealers are deliberately avoiding vehicle registration tax by selling high-powered cars to boy/girl racers as lower powered cars.

...In the scam, cars are marked down on the registration books as being of lower power, helping dealers to avoid paying Vehicle Registration Tax (VRT) at the higher rate.

It then allows the boy racers to insure the turbo-charged modified cars as low-power vehicles with small engines - instead of high performance 'rockets'...

...An investigation they carried out found that 1.8-litre or 2-litre engined cars were being sold as 1.6-litres. The buyer insures the car as a normal vehicle.

Some dealers are so cocky about not getting caught they will advertise the unscrupulous activity.

One car advertised this week on a website offers a 1998 1.8-litre turbo Japanese model.

But the small print tells prospective owners the car was a 1.6-litre on the registration book...

My query: Are these cars really 1.8L etc. engines or is it that they are 1.6 (or whatever) but modified to have the same power as a 1.8 etc.?

Has anyone else experienced this? Are they charging the same prices on a "1.6L" as they would on these "super 1.6L" cars?

mike65

Well here's a list of Glanzas, would'nt mind betting quite a few are 'non-turbo' for tax/insurance purposes.

Here's a bit more from that article

Road Safety Authority (RSA) chief Noel Brett said he was ordering a full-scale probe into the scam after being handed details of the Irish Independent investigation. "I am massively concerned and absolutely shocked and horrified at this," he said yesterday. "Inexperienced young drivers are using deception to get into high performance cars." Meanwhile, Labour's justice spokesperson called for cars belonging to drivers who indulge in dangerous boy-racer style driving to be impounded, and in some instances confiscated permanently. Senator Joanna Tuffy said: "The phenomenon of boy-racers has become a blight in many communities." She called for laws whereby these dangerous driving practices would be punished by the confiscation of the offending driver's car."

Mike.

Sonnenblumen

Dealers deliberately breaching descriptions should be reported, prosecutedand hopefully barred form business.

All insurance companies reserve the rights to refuse any liability if they discover that the insured deliberately witheld/made false declarations at application stage.

I would not like to be in a case where you had to prove your innocence, afterall a blind man would see a turbo unit.

The tax man

Well here's a list of Glanzas, would'nt mind betting quite a few are 'non-turbo' for tax/insurance purposes.

200bhp 1.3 on log book:rolleyes:

and another one

Getting bored now:p

r3nu4l

So it seems as though the report is correct in some senses.

It's not so much outright lying, it's more like casual ommittance of importnat details. These are for example 1.3L cars, they just happen to be modified to produce more power than would normally be expected.

If this is the case then shouldn't there be a law stipulating that modifications used to increase power should be listed alongside teh engine size in the log book?

Also, shouldn't insurers be doing more to question the power of a car by asking specific questions about modifications? Would that solve the problem?

mike65

They should! When I was transfering insurace to my Audi I was asked for the exact engine spec as it might have been a 1.8 turbo model.

Mike.

Sonnenblumen

r3nu4l wrote:

So it seems as though the report is correct in some senses.

It's not so much outright lying, it's more like casual ommittance of importnat details. These are for example 1.3L cars, they just happen to be modified to produce more power than would normally be expected.



If this is the case then shouldn't there be a law stipulating that modifications used to increase power should be listed alongside teh engine size in the log book?

Also, shouldn't insurers be doing more to question the power of a car by asking specific questions about modifications? Would that solve the problem?

Check the small print on your Proposal form, if caught (witholding info/providing incorrect details) the insurers withdraw cover!!

Chipping is popular but again this could result in loss of cover, its simple. The insurers are offering cover for a particular make/model (and performance) if there any changes made that materially affect performance then the onus is on you the driver.

What more than the obvious questions to answer do you require, a SPOON?
HTG forms are busy enough without trying to accomodate chancers!!

peasant

It has always struck me as strange that there is no reference to the actual power (BHP, PS, KW) of the car in the vehicle log book. The ordinary Joe Soap often doesn't even know what the output of their car is.

All this evaluating of cars by their engine capacity is meaningless. There's old 2 litre Merc diesels with 60 BHP and 2 Litre Scoobies with 250+.

1.4' s with 60 BHP and the new Golf FSI turbo with whatisitagain...175 or so?

State engine power on the log book, make any modifications liable to official registration (possibly combined with an engineers report from the NCT or somesuch) ...end of story.

Del2005

I know the Gaurds are regularly stopping Glanzas and their ilk and calling the persons insurance company to ask if they are insured as Glanzas. If they aren't the Gaurds take the car and they have to walk home.

barryi200

lads this has been going on for years - just goes to show feck all has been done when this 1st cropped up....

KeRbDoG

The tax man wrote:

200bhp 1.3 on log book:rolleyes:

and another one

Getting bored now:p

Just say you where to be involved in a large accident in one of those. They notice that the car isn't as described by the insurance cert. BAM! You insurance is nullnvoid

VeVeX

The tax man wrote:

200bhp 1.3 on log book:rolleyes:

and another one

Getting bored now:p

All cars Glanzas or not will only have cc stated on the log book. Any turbo will not have referance on the log book. This 1.3 on book is BS to attract the 90° baseball hat brigade.

At the end of the day its up to the owner to disclose the car in full.

If I were buying one of these cars and read some of the crap these import dealers post on car sale sites it would seriously put me off that individual garage.

If you cant insure one of these cars legitamitly the reason is your a riisk to yourself and others. I personally hope theres something done about it. Its been going on for years at least its getting some public notice now.

There are a hell of alot less Starlet Turbos on the roads now then a couple of years ago I can imagine how many found the bottom of a ditch rather then scrap yards.

Yakuza

(from Carzone)
highly thuned car very fast hks front mount intercooler. hks dump valve. hks air filter. hks actuatour. hks fcd. apexi avcr boost controler set at 1.1 bar off boost +apexi turbo timer full blitz nur spec cat back exzaust + downpipe.org race active kluch ##tax till 4-07#nct till6-08##nkg iredeum plugs + high power leads. duble sun roof ###1.3 on log book ### 200 bhb### very fast car ####4000 euro spent have all recets.very clean car well looked after

Someone who spells like that probably doesn't even realise (or care) they're voiding their insurance by modding the bejaysus out of the engine.

Seth Brundle

Yakuza wrote:

Someone who spells like that probably doesn't even realise (or care) they're voiding their insurance by modding the bejaysus out of the engine.

Never mind that, would you trust them to have the engineering know-how to do it right?

Mc-BigE

The tax man wrote:

and another one

that one is strange, he says he owns the car for 2 years, but his price includes VRT? surely he should have paid that 2 years ago?

getting back to topic, what about when the car has to do NCT? Surely the tester would have difficultly finding a 1.3 non turbo car on his computer system to match the car in front of him which clearly has a turbo under the bonnet?

or is it just a matter of the NCT not looking at the car, only the paperwork?

ToxicPaddy

Mc-BigE wrote:

that one is strange, he says he owns the car for 2 years, but his price includes VRT? surely he should have paid that 2 years ago?

Ah this is common place, I know of a guy who works for a second hand car sales place and he takes the cars, sells them as his own giving his mobile no etc. In the ads he uses some of the phrases:

"forced sale due to company car"
"Had this car for years and selling it due to family circumstances"

All lies as most of the cars he's only sat behind the wheel to drive home and park outside his house when a prospective buyer is coming.

So this guy is probably doing the same, a small time dealer who claims to be the owner of this car but didnt think when putting in this ad.

Tox

Yakuza

Mc-BigE wrote:

that one is strange, he says he owns the car for 2 years, but his price includes VRT? surely he should have paid that 2 years ago?

The japanese plate and the generic "inside a lockup" background (seen on most genuine imported car ads) are a bit of a giveaway. I've owned an imported Celica in the past, but I only ever saw it with either trade plates or plates issued when I bought it. Surely only someone who imports cars directly would have had access to take a photo while it had its foreign plates on it. (Of course, he *could* have imported it personally).

MercMad

Whatever about insurance fraud, I know for a fact that the VRT folk only had typical Irish models on their databse up to a few years ago. They could not create new type codes for specific models soi in order to accept a VRT payment they used whatever code existed once it was close enough !

They got paid and whatever you did with your insurance was up to you, and when the NCT came around again that was your problem. This is why a lot of Jap cars failed their NCT when they had no centre lap belt. The Type code for the Irish model ( i.e 5 seats) had been entered originally !

Insurance companies werent entirely guilt free either ! Once I swapped companies and I filled out the form stating the engien size as 1782cc or whatever (Clio 16V) and recieved my cert etc and upon reading the fine print it stated Clio 1.2 ! I quiried it and they stated that they didn't have a 1.8 on their system, so I insisted they send me a letter stating the actual facts !

Kimbot

Alot of the dealers etc will actually give a lower spec engine number as the car they are looking to VRT.

i.e. Integra Type R = 1.8 Vtec (DC2 Model only)
Alot of people used to register these as the 1.6 non-vtec varient as car dealers get to do their VRT online so there is noone able to physically check that the car is what they say it is!! Therefore they wer able to save €€€€ and not pass that saving onto the customer!! Making a huge profit in the process. THen when you went to insure your car you would think that it was the 1.6 as the log book presumes, therefore you pay tax @ the 1.6 rate and not the 1.8 rate. and the same for your insurance!!
But the problem with all this is if you know that the log book is wrong then you will have to get it changed straight away as your tax/insurance is invalid straight away because its not really the car you are driving in!!

Guy:Incognito

MercMad wrote:

Insurance companies werent entirely guilt free either ! Once I swapped companies and I filled out the form stating the engien size as 1782cc or whatever (Clio 16V) and recieved my cert etc and upon reading the fine print it stated Clio 1.2 ! I quiried it and they stated that they didn't have a 1.8 on their system, so I insisted they send me a letter stating the actual facts !

Something similar happend to me with Hibernian when I bought my safrane. It's a 2.5 auto RXE model. The woman on the phone kept insisting it was a 2.2 diesel. So after a while of explaining that the 2.2 diesel is a different model to my 2.5 petrol she just changed the description and engine size on her computer. When I changed to Quinn they had the proper model on theri system.

Cerberus

The information in the article is correct, however his conclusions are not. Dealers putting 2.0l cars down as 1.8s on the log book benefits no one except the dealer. He pays substantially less VRT but charges for the car as if it had cost him the full rate. Result: dealer makes a greater margin. I fail to see how an incorrect log book helps young people get cheaper insurance? When was the last time your insurance company asked you to produce the log book? You can tell your insurance company your 280bhp evo is a 1.3 lancer and they won't question you or ask to see the log book. The reason being is that they don't care. If you have an accident and the assessor sees your big shiny turbo they will withhold some or all of the payout and maybe declare your insurance null and void. The law will then prosecute you for driving without insurance. The insurance company won't lose out either way.
Some young lads are gonna lie to their insurance companies whether they have a fiddled log book or not. Having one just gives them a false sense of security.

VRT fiddling is not killing people. It's just gonna be the latest bandwagon for the political sound bite monkeys to hop on instead of actually doing something constructive...

Henry Ford III

Cerberus wrote:

The information in the article is correct, however his conclusions are not. Dealers putting 2.0l cars down as 1.8s on the log book benefits no one except the dealer. He pays less substantially less VRT but charges for the car as if it had cost him the full rate. Result: dealer makes a greater margin. I fail to see how an incorrect log book helps young people get cheaper insurance? When was the last time your insurance company asked you to produce the log book? You can tell your insurance company your 280bhp evo is a 1.3 lancer and they won't question you or ask to see the log book. The reason being is that they don't care. If you have an accident and the assessor sees your big shiny turbo they will withhold some or all of the payout and maybe declare your insurance null and void. The law will then prosecute you for driving without insurance. They insurance company won't lose out either way.
Some young lads are gonna lie to their insurance companies whether they have a fiddled log book or not. Having one just gives them a false sense of security.

VRT fiddling is not killing people. It's just gonna be the latest bandwagon for the political sound bite monkeys to hop on instead of actually doing something constructive...

Fair points but who is loosing out here? It's us the compliant ordinary motorists.

If motor claims are correctly thown out by an Insurer, any 3rd party liability is paid for by the Bureau which is funded by Joe Public.

The liars who attempt to cheat on their insurance are simply robbing us.

Cerberus

Henry Ford III wrote:

Fair points but who is loosing out here? It's us the compliant ordinary motorists.

If motor claims are correctly thown out by an Insurer, any 3rd party liability is paid for by the Bureau which is funded by Joe Public.

The liars who attempt to cheat on their insurance are simply robbing us.

I totally agree with you. It's the ordinary motorist who ends up footing the insurance bills for these people. I wasn't trying to condone the practice of lying to your insurer. I'm just trying to get across the point that VRT scamming is a matter for the revenue. It's not a road safety issue like the article tries to make out. The article is adding 2 + 2 and coming up with 5 just because 5 grabs more headlines this week. My own view would be that VRT is a government sponsored scam so if people are trying to get around it then it's just a case of scammers scamming the scammers.

Sonnenblumen

Cerberus wrote:

VRT fiddling is not killing people. It's just gonna be the latest bandwagon for the political sound bite monkeys to hop on instead of actually doing something constructive...

Says who? VRT is a gov revnue just like paye, VAT etc etc, all technically going to the central exchequer, which in turn determines where the money goes, for example, funding the health service.

Talk is cheap talking crap is bull****. Where do you gems come from??:mad:

Rudolph Claus

Alot of the dealers etc will actually give a lower spec engine number as the car they are looking to VRT.

i.e. Integra Type R = 1.8 Vtec (DC2 Model only)
Alot of people used to register these as the 1.6 non-vtec varient as car dealers get to do their VRT online so there is noone able to physically check that the car is what they say it is!! Therefore they wer able to save €€€€ and not pass that saving onto the customer!! Making a huge profit in the process. THen when you went to insure your car you would think that it was the 1.6 as the log book presumes, therefore you pay tax @ the 1.6 rate and not the 1.8 rate. and the same for your insurance!!
But the problem with all this is if you know that the log book is wrong then you will have to get it changed straight away as your tax/insurance is invalid straight away because its not really the car you are driving in!!

Does the above mean that a dealer is taking the engine number or chasis number off of a 1.6 engine for example and using that 1.6number when registering the 1.8car for example? How can that be,,, would there not be 2cars on the system then with the same engine/chasis numbers if he "borrows" numbers off of another car?

Also, if a buyer bought a 1.8car that has been registered as a 1.6 off of a dealer as in the above example,,, even if the buyer declared to his insurance company the correct engine size of the car would the car "technically" not be insured as it has the wrong chasis/engine number? Would the buyer be actually insuring the car that the engine/chasis numbers were borrowed from?? What numbers do you actually need to register a car anyway, looking at my log book here all it has are 1590cc an the chasis number and reg plate number. So how can a dealer use the numbers off of a different car without it getting noticed even if they do it online? Does the system let you use the same chasis or whatever numbers you need over and over again?

Im confused,,, whats happening here ted?

ToxicPaddy

Looks like this might be clamped down on now lads.

An article from the examiner website today:

NCT to be made mandatory for imported second-hand cars

The National Car Test is reportedly set to become mandatory for all imported second-hand cars.

Reports this morning say the move is designed to crack down on a situation where some imported cars are registered as having lower-powered engines in order to avoid paying the proper level of vehicle registration tax.

The reports claim thousands of cars, many Japanese, are being imported with enhancements designed to make them go faster.

However, the sellers are reportedly neglecting to mention the enhancements, allowing them to pay less VRT and allowing motorists to get cheaper insurance.

Here

Do ya reckon they are listening to us???

Maybe Mr Cullen is a regular on here and reads the motors forum, has a look at the various topics and then decides what to do..
Thinking along the lines of "hmmm.. these guys seem to know what they are talking about"

Tox

Hotwheels

Unison has this about it....

NCT tests to combat boy racer top speed car scam
ADVERTISEMENT

IMPORTED used cars will have to undergo an NCT test before being sold on to boy racers.

The move is to combat the dangerous scam of disguising high-peformance cars as 'normal' low-engine size vehicles.

Until now, imported Japanese cars don't have to take an NCT test for at least a year after they are registered here.

An Irish Independent investigation revealed the widespread scam that has allowed thousands of high-performance cars to illegally get into the hands of boy racers, many of whom are being killed in high-speed race crashes. In the scam, cars are marked down on the registration books as being of lower power, helping dealers to avoid paying Vehicle Registration Tax (VRT) at the higher rate.

It then allows the boy racers to insure the turbo-charged modified cars as low-power vehicles with small engines - instead of high-performance 'rockets.'

Cars are registered as low-cc vehicles, when in fact they are turbo-charged cars designed to travel at top speeds, significantly above the legal limits.

Many of these high-performance imported cars are having their electronic transmissions "chipped". This process transforms the cars and makes it travel much faster.

Many used cars imported from England are having their mileage clocks turned up to pay a lower VRT rate. The clocks are then turned back before being sold.

Noel Brett, Road Safety Authority chief executive, said yesterday that as a result of the Irish Independent disclosure they would now be moving to make it mandatory for every imported used car to undergo an NCT test before it was sold.

Mr Brett said he was shocked at the revelation.

Part of the new check, details of which would have to be ironed out, would be to determine that the car has the proper specifications as determined by its manufacturer.

Cars that are modified or have the electronics on the engines "chipped" to alter its performance, would be detected, as well as the correct engine size.

A car dealer mentioned in our story as advertising that a 1.8-litre high-power turbo car was marked down as 1.6-litre normal car dropped the 1.6 reference from the web page yesterday.

Most of the cars getting into the hands of boy racers are believed to be Japanese imports, often sold on the side of the road.

The Society of the Irish Motor Industry (SIMI ) said yesterday it too was alarmed at the disclosure.

Cyril McHugh, SIMI chief executive, said: "There are so many scams going on in this area."

He criticised the Revenue Commissioners for not carrying out adequate checks on used cars arriving here.

Concerned

"The Revenue are not carrying out checks to see that the proper VRT is being paid," said the motor industry chief.

He also cited the practice of the mileage clocks being altered to avoid paying the car tax.

Mr McHugh said he was very concerned at the revelation that some car dealers made it easier for boy racers to buy and insure high performance cars by selling vehicles incorrectly registered for VRT.

Dick O'Driscoll, chief executive Hibernian Insurance, said yesterday he backed the NCT plan for imported cars once the true specifications of the cars were identified during the test. In the UK, the vehicle licensing authority had access to the vehicle's identification number as well as its registration details.

Insurance companies were therefore able to contact the authority to check up on each car's details.

Treacy Hogan

Mc-BigE

Cerberus wrote:

My own view would be that VRT is a government sponsored scam so if people are trying to get around it then it's just a case of scammers scamming the scammers.

Totally agree with you there, but on the flip side if people are lieing to their insurance companies about their car details, and they have a crash,its the tax payer who will suffer in the end, not the insurance co.

r3nu4l

Good stuff, hopefully that will sort it out I await the final details of the scheme with interest.

r3nu4l

Mc-BigE wrote:

...but on the flip side if people are lieing to their insurance companies about their car details, and they have a crash,its the tax payer who will suffer in the end, not the insurance co.

I have to display my ignorance here because I wouldn't know a modified engine if I saw one, I can do the basics like change the light bulbs, oil etc but I don't have enough experience to recognise a turbo by sight. So when it came to getting my insurance I would be claiming in good faith that it was a 1.4 L and would be horrified if my insurance was rendered void if something happened!

That said, I'm sure if I sat into a log book 1.4 and it took off like a rocket I'd have my suspicions but I wouldn't know for sure and I'm sure that while many boy/girl racers know exactly what they are getting some people probably wouldn't so it makes a bad situation even worse in my view.

Henry Ford III

If your 1.4 had a turbo you would know all about it. Believe me.

It would most likely also have a turbo boost gauage, and possibly a dump valve.

I don't think anyone could get away with an excuse of "I didn't know it was turbo charged/chipped".

The writing is on the wall for insurance fraudsters in this area.

Falsifying a cars log book to reduce VRT is one thing. A government issue due to lost VRT revenue.

Failing to inform an insurer of the true nature of a cars engine potential is a serious matter for the insurance industry. I have no doubt there are potentially thousands of fraudsters on the roads with invalid cover.

The thing is though an NCT inspection will quite easily reveal the VRT scam,
but who is to know if a cars insurance cover is valid. A naturally aspirated and unmodified Starlet 1.3 might have say 75 or 80 bhp, whereas a turbocharged modified one might have 200bhp.

The other point is that the insurance fraudsters have no problems clocking thier cars, so what's to stop them bringing their cars back to standard spec. every 2 years to satisfy the VRT man?