New VRT Bands in todays Indo

Meister

Well if its true (im sure it is), its all based on Co2 emissions. eg from the paper
Lexus IS220d current rate 30% vrt, new rate 24% -7%. (-7.9% on RRP)
Vw Passat 1.9tdi, current rate 25% new rate 20%- 5% (-6.3% on RRP)

Well at least it seem to be moving in the right direction. On my figures BMW 320D will drop from 30% vrt, to 20%, with about a 12% reduction in RRP

Anan1

I'd be a lot happier if I saw it in a proper newspaper.

E92

This if true looks to be just about the best thing the Government has ever done for the car industry. Full marks to the Government for this. I really wasn't expecting that. In the absense of a tax on fuel replacing VRT, this is the best possible solution. Hopefully the days of Irish specials like the BMW 316i, Toyota Avensis 1.6 etc will be well and truley numbered.

BMW and MINI will beover the moon though, after all their most popular cars like the 1,3 and 5 series have petrol engines that offer diesel like economy(and the lower emissions to boot than the said diesels) never mind the diesels. I don't know of any other 3.0 litre petrol car that averages 39.8 mpg bar the 325i. Even the Toyota Avensis 1.6 can't match that(at 39.1 mpg) Like the Merc C320 CDI which averages 38.7 mpg for acomparision(and that despite the badging has a 3.0 litre and not a 3.2. The C280 pollutes 219 g/km(and 3.0 with 231 bhp), unlike its rival 330i which pollutes 173 g/km. Not to mention the MINI Cooper D which offers the same CO2 as a Toyota Prius. Others will be very happy, like the Audi A8 2.8 with its lowest in class CO2 of 199 g/km, and the Bluemotion Polo with 99 g/km CO2(maybe VW will import it now with the new VRT system?)


Anyway the main change is going to be that diesels will be in some cases quite a good deal cheaper that they are presently, and some petrols will be dearer. I don't see much happening with Hybrids, some may actually go up like the big Lexus models such as the RX400h etc because all Hybrids already get a 50% VRT rebate. Maybe cars like the Prius and Civic IMA will be cheaper, I don't have the exact changes to hand, so I don't know how it will turn out in reality, but so far from what I've heard I like the sound of it.


Anyway here are 2 articles from the Sindo about it:
State to push ahead with VRT system despite risks

Reasons against not sufficient to delay change
By JODY CORCORAN
Sunday November 25 2007

This time last year, when the Government announced a consultation process on the Vehicle Registration Tax system change, it said there were various reasons for relating the system to CO2 emissions.

Under the Kyoto Protocol, Ireland has agreed to limit the growth in greenhouse gas emissions to 13 per cent above 1990 levels in the period 2008-2012.
In 1990, CO2 emissions from the road transport sector were under 5 million tonnes (Mt) of CO2.
Since then, CO2 emissions from road transport have more than doubled, and is projected to reach over 13 Mt per annum in the period 2008 to 2012.
Controlling and reducing CO2 emissions from transport, especially from cars, has an important role to play in reducing the cost to the Exchequer from emissions, the Finance Minister, Mr Cowen said last year.
If no action was taken, he said, the total quantity of CO2 emissions relating to car transport would continue to increase.
The car industry is playing a role in reducing the emissions from new vehicles. However, the ongoing technical improvement in new cars is not thought sufficient to overcome the increased demand for cars and the effect of the trend to purchase larger cars.
The Government believes the change to the VRT system, as well as the motor tax system, can both affect car buyers' behaviour directly through pricing adjustments favouring lower-emissions cars, but also by making more explicit in their minds the link between their vehicle choice and its environmental impacts.
The new system will not be without potential risk.
When it announced its consultation process, the Government said it was considered then that to base the VRT system solely on CO2 emission levels "should not be adopted due to a number of reasons."
These reasons included:
l "The outcome of a VRT system based solely on CO2 emission levels is too difficult to predict or estimate;
l "Given the yield from VRT at around €1.3bn in 2006, a change in the VRT system should not put a significant proportion of this revenue yield at risk. Consequently any change in the VRT system to link it more to CO2 emission levels should be done on a phased basis;
l "Cars create costs and have adverse effects on society (as well as benefits) beyond those arising from CO2 emissions (health costs, accident costs, road congestion and building costs, noise etc). Therefore it would be unwise to base the VRT system solely on CO2 emissions. As with all major tax heads, revenue raising for the purposes of allowing Government to provide services to our people is the principal purpose of this tax."
The Government is obviously satisfied that these potential risks were insufficient to delay the introduction of this new system.
- JODY CORCORAN

And here is number 2:
Revealed: what Budget will mean for tax on new cars

By JODY CORCORAN EXCLUSIVE
Sunday November 25 2007

The Government is to introduce a radical new system of Vehicle Registration Tax based no longer on car engine size but solely on carbon dioxide emissions, the Sunday Independent can reveal.

The new system, which will come into force on July 1 next year, will see VRT reduced on 53 per cent of new cars and increased on 47 per cent of new cars.
This, in turn, will lead to significant changes in the open market sales price of new motor cars, with prices of some cars falling by over 10 per cent and others increasing by a similar amount. Long term, this change will affect car buyers' behaviour directly, through pricing adjustments, favouring lower-emission cars, but also by making more explicit the link between vehicle choice and its environmental impacts.
Most recent figures show that an estimated 180,000 new cars are sold in Ireland every year.
Under the current system, three bands of VRT are applied on new cars, according to their engine size. But that system is to be entirely scrapped and a new CO2-based system, with seven bands of VRT, will be applied.
As a general rule of thumb, the new system will see VRT reduced on new diesel and hybrid cars. Broadly speaking, the new system will also see increases in VRT on most new larger cars, and decreases on most new smaller or medium-sized cars -- but that will not strictly be the case.
For example, under the new system, a small Volkswagen 1.4 GP Comf will see its VRT increase by 1.5 per cent, while an executive car such as the Lexus IS 220D will see its VRT decrease by almost 8 per cent (see further examples on page 6).
The new system is to be announced in the Budget next month by Finance Minister Brian Cowen.
Details of a complementary new system of rebalancing motor tax is also expected to be announced by Mr Cowen on December 5.
Underpinning both of these initiatives would be a new mandatory emissions-based labelling system for cars, along the lines of that used for white goods such as fridges and washing machines.
VRT is an important source of revenue for the Exchequer, yielding €1.3bn in 2006, most from passenger cars. In the 2007 Budget Statement, Mr Cowen announced his intention to rebalance the current VRT system to build in some reward for consumers choosing lower-emission vehicles, and to levy higher VRT on higher-emission vehicles.
A range of possible VRT options was set out in the Budget booklet and a public consultation process was announced.
At the same time, the then Minister for the Environment announced that he would consult on proposals for a complementary rebalancing of motor tax. The Department of Finance consultation closed on March 1, 2007.
Over 60 submissions were received: 19 from representative organisations or firms and the remainder from individuals. Representatives from the Department of Finance, the Revenue Commissioners and the Department of the Environment met eight organisations and five individuals to discuss their submissions.
Any changes were originally to have effect from a target date of January 1, 2008.
However, in order to give members of the public, Revenue (as administrators of the VRT scheme), and the car industry sufficient notice of any changes, the revised VRT scheme will now be introduced from July 1, 2008.
See page 6
- JODY CORCORAN EXCLUSIVE


Question:does anyone know what is on page 6? I can't find it on the internet.

eringobragh

Anan1 wrote: »

I'd be a lot happier if I saw it in a proper newspaper.

The Star perhaps :rolleyes:

copacetic

hmmm, surely announcing this on Dec 5th and then not implementing it until July is going to cause problems for the car market? i.e anyone whose car pick will be coming down will wait, anyone whose car pick is going up will buy now..

E92

copacetic wrote: »

hmmm, surely announcing this on Dec 5th and then not implementing it until July is going to cause problems for the car market? i.e anyone whose car pick will be coming down will wait, anyone whose car pick is going up will buy now..

Exactly, however as the changes will be quite radical and could make some cars a lot dearer and others a lot cheaper, the industry says that they need 6 months(because that is the 08 orders went out in the summer of this year), it would have been better if they announced this in the summer just gone by, and then the change would happen at the start of next year, however we are where we are, and better late than never.

Anan1

eringobragh wrote: »

The Star perhaps :rolleyes:

I'm sorry, I don't understand what you're trying to say?

flogen

Anan1 wrote: »

I'd be a lot happier if I saw it in a proper newspaper.

If it's in the Sunday Independent you can take it as read that it's straight from the Government.
Everything else in that "newspaper" is, anyway.

copacetic

flogen wrote: »

If it's in the Sunday Independent you can take it as read that it's straight from the Government.
Everything else in that "newspaper" is, anyway.

agreed, especially since it is jody corcoran in the byline. This is the government flying a flag before wednesday week to see the reaction.

hotshots85

to bring this stuff out at this time of year is just really stupid . if i was going to buy in jan id hold off ,so imo its going to mess up the new year car sales .i also think that its just a fianna fail give "the greens something "after poolebeg got the go ahead .

pburns

I was expecting a thread about 5 pages long! If true, this has HUGE implications to our car-buying habits. I won't be convinced until I see Cowen's budget though. Surely there is a danger the government will lose revenue on this? I can only presume they've done their sums very carefully.

That caveat aside, I think it's a great news and have voiced the opinion that VRT should be directly linked to CO2 levels many times on this board.

On a personal level, it puts me in an awkward position. I am (was?) interested in buying a new diesel Mazda 6 when they arrive in March. However if what's in today's Sindo is to be believed the reduction in VRT for this car could be anything between 8-10% (AFAIK the diesel Mazda is 149g/km).

The 320d should be a big winner, as should the Lexus IS220d -7.9%).

Looks like I'll be postponing my car-purchasing descision and come July the car-buying landscape might be very different.

But like I said, I'll wait 'til I see if Biffo confirms this...

HarryHood

Apologies but I'm stumped on these VRT changes!

I've ordered a 1.6 car (3 series) for delivery in January '08. We have agreed a "difference to change" price (on paper) but now I'm afraid the dealer will ask me to cough up more due to VRT? I've already handed over a hefty deposit (d'oh!) so can't really afford to pull out (plus I really like the BMW).
Does anyone know for certain if the dealer will have gorunds (VRT) to ask for more cash or how will I be affected?

Many thanks.

pburns

HarryHood wrote: »

Apologies but I'm stumped on these VRT changes!

I've ordered a 1.6 car (3 series) for delivery in January '08. We have agreed a "difference to change" price (on paper) but now I'm afraid the dealer will ask me to cough up more due to VRT? I've already handed over a hefty deposit (d'oh!) so can't really afford to pull out (plus I really like the BMW).
Does anyone know for certain if the dealer will have gorunds (VRT) to ask for more cash or how will I be affected?

Many thanks.

I can't see any grounds for the dealer pulling out. The VRT changes don't come in 'til July and the value of the car you're trading in is not going to change in the short-term.

In fact I'd seriously question the wisdom of buying a 1.6 3-series. This car isn't even imported into UK or elsewhere 'cos it's really too titchy an engine for such a car. It is only because of our (current) CC-based VRT system that the car was produced for Ireland. If VRT is to be linked to CO2 emissions there will surely be better options - the 318d/320d for example...

HarryHood

Thanks PBurns, I'm hoping the increase in bhp in their new 1.6 engine will soften the blow of not having gone the diesel route.

Should I phone the dealer to ensure my deal still stands or leave it?

BrianD3

A huge issue it is alright - I'm surprised the Indo didn't put it on the front page.

Looks like the "Efficient Dynamics" BMWs are going to be big winners from this if the figures are correct VRT will reduce from 30% to 16% for many of them. But what about the person who has bought one now or ordered one for January will they see the value of their car plummet come July?

The Renault Laguna 1.5 will also do well from this as its VRT will fall from 25% to 16%. Not many cars in this class will have 16% VRT. The Corolla 1.4 D4D wil go from 22.5% to 16%. Maybe Toyota and PSA wil now decide to sell the 1.4 HDi Aygo/107 here. Etc.

This is certainly going to be a big shock to the market.

edit: I might have gotten the BMW figures wrong, maye they will reduce to 20% rather than 16. Stil a big saving though.

BrianD3

Going back to the original post - if the VRT for the 320D is 30% and drops to 20% how does that result in a 12% reduction in RRP. Surely a 10% reduction in VRT will result in significantly less than a 10% drop in RRP.

copacetic

BrianD3 wrote: »

Going back to the original post - if the VRT for the 320D is 30% and drops to 20% how does that result in a 12% reduction in RRP. Surely a 10% reduction in VRT will result in significantly less than a 10% drop in RRP.

I spoke to someone who has read it and the indo makes no mention of RRP reductions, these
are the OPs figures. They only give percentage changes in vrt rate, but look to have calculated
them wrongly.

Ice_Box

I hope they drop VRT completly on safty type extras such as extra air bags and ESP.

Lex Luthor

I didn't get a chance to get the Indo today, so if anyone can explain how the prices for VRT change came about?

Did they give specific examples like the 320d/IS220d to show the drop in price or did they provide a chart?

I'd be interested to know how the VRT changes are going to affect the 1.9 Alfa GT if anyone knows?

copacetic

Lex Luthor wrote: »

I didn't get a chance to get the Indo today, so if anyone can explain how the prices for VRT change came about?

Did they give specific examples like the 320d/IS220d to show the drop in price or did they provide a chart?

I'd be interested to know how the VRT changes are going to affect the 1.9 Alfa GT if anyone knows?

I have it now and the OPs numbers are not in it, he has made them up himself I presume. all they say is the reduction in vrt and they give a chart of example vrt reductions NOT RRP reductions. They also calculate them wrongly. the main bands given are:

121-140 gCO2/km
16% vrt
141-155
20% vrt
156-170
24% vrt

They mention the Alfa 1.9 JTS going up by 7% VRT.

However the OP has gone well wrong with his % RRP changes.

Meister

copacetic wrote: »

I spoke to someone who has read it and the indo makes no mention of RRP reductions, these
are the OPs figures. They only give percentage changes in vrt rate, but look to have calculated
them wrongly.

I put RRP's in, apologies.
VRT is calculated as a % of OMSP (the mystery figure!)ie Current
Breakdown of Tax Content of Car Prices
< 1400cc 22.5% 1400cc - 1900cc 25% >1900cc 30%
Pre Tax Price € 9,970 € 15,397 € 23,624
VAT € 2,094 € 3,233 € 4,961
VRT € 3,502 € 6,210 € 12,251
Post Tax Price€ 15,566 € 24,841 € 40,836
56% 61% 73%
Tax as a % of Pre Tax Price

Lifted this from the SIMI site

copacetic

hmmm, had a look at the car I am pondering.

The new A4 1.8T goes from 25% VRT band (1401 -1900cc) to
24% VRT band (156-170 gco2/km) so a 1% change to vrt ~ 0.4% change in price.

The new A4 2.0TDI does from 30% VRT band (over 1900cc) to
20% VRT band (141-155) and is only 4 gms off the 16% band.

However I make this 10% reduction in VRT only worth about a 4% saving on RRP, so possibly the changes aren't half as significant as people are making out?

Open to correction on that, that is off top of my head...

Anan1

BrianD3 wrote: »

Going back to the original post - if the VRT for the 320D is 30% and drops to 20% how does that result in a 12% reduction in RRP. Surely a 10% reduction in VRT will result in significantly less than a 10% drop in RRP.

VRT is calculated as a percentage of the Open Market Selling Price.

testicle

copacetic wrote: »

I have it now and the OPs numbers are not in it, he has made them up himself I presume. all they say is the reduction in vrt and they give a chart of example vrt reductions NOT RRP reductions. They also calculate them wrongly. the main bands given are:

121-140 gCO2/km
16% vrt
141-155
20% vrt
156-170
24% vrt

They mention the Alfa 1.9 JTS going up by 7% VRT.

However the OP has gone well wrong with his % RRP changes.

The Accord diesel appears to be dropping from 30% to 20% VRT so, as it's 143 g/km

Meister

copacetic wrote: »

hmmm, had a look at the car I am pondering.

The new A4 1.8T goes from 25% VRT band (1401 -1900cc) to
24% VRT band (156-170 gco2/km) so a 1% change to vrt ~ 0.4% change in price.

The new A4 2.0TDI does from 30% VRT band (over 1900cc) to
20% VRT band (141-155) and is only 4 gms off the 16% band.

However I make this 10% reduction in VRT only worth about a 4% saving on RRP, so possibly the changes aren't half as significant as people are making out?

Open to correction on that, that is off top of my head...

Based on the table in my previous post, i would estimte it at somewhere like
A4 1.8T Current €39,900 July €36,806 (39,990-9% (what I have based the OMSP % difference as... or dealer margin) -25%=€27,231 add the new 24% rate = €33,767 + OMSP difference est @9%= €36,808.

Same formula for A4 2td
Current €43,320 July €36,094

Maybe im complety off!!...I surley have to be?

RoundyMooney

I presume this applies to secondhand imports too?

If so \o/

Either way, it's a commendable approach.

Ice_Box

BMW 120D is 129 g/km so dropping from 30% vrt to 16%vrt
whats that 4 or 5 grand?

Ice_Box

To calculate the new price...
divide the current price by 1.3 and multiply by 1.16
thats assuming the current vrt rate is 30%
and the new rate is 16%

HarryHood

So can anyone tell if the RRP on a 316i will go up or down in July, and if so, by how much?
Thanks.

copacetic

Meister wrote: »

Based on the table in my previous post, i would estimte it at somewhere like
A4 1.8T Current €39,900 July €36,806 (39,990-9% (what I have based the OMSP % difference as... or dealer margin) -25%=€27,231 add the new 24% rate = €33,767 + OMSP difference est @9%= €36,808.

Same formula for A4 2td
Current €43,320 July €36,094

Maybe im complety off!!...I surley have to be?

that doesn't make any sense at all to me Meister.
The only change to an A4 1.8T is 1% in the VRT rate but you have somehow managed to knock nearly 10% off the overall price, when it should be more like 0.4% off imo?

VRT is the last thing calculated and also you are taking it off wrongly, i.e if VRT is 25%, you can't just take 25% off final price as that is much more than 25% VRT would have added.


edit: I see icebox has the right idea, divide current price by 1 + current rate to get cost before VRT
was applied, then mulitply by 1+new vrt rate.

so for new A4 for the 1.8T you would take
the price of (39980/1.25)x1.24 = 39,660 price.

for the 2.0TDI (43,320/1.30)x1.20 = 39,987 new price

lafors

My previous 'VRT will go' thread looks a bit off so, though I always expected it to be replaced by a gormley tax.

Maybe I'm being pessimistic but does no one else think the dealers will just not change the price if it goes down, but will increase it if it goes up, and as usual us Irish will bend over and take it like we always take price increases on anything.

And are the savings going to be as big as originally made out?
Is this for new cars or is it for imports too?
If it is for imports, how do they judge the emissions? Based on NCT?