EP Mooney closes another sad day for the motor industry !

Hellrazer

Autoplatz1 wrote: »

To set the record straight, I had many dealings with Paraic Mooney and he was and still is a gentleman to deal with. He ran a large business but unfortunately like so many people in the motor industry and property business the current economic times has taken their toll. No Doubt we will see Paraic Mooney back in action in the near future.

Im not denying he was a gent,I always got along very well with the man.All Im saying is that in lets say the last 2 years or so he had other interests than his staff in mind and that was down to the downturn in the property business.

I hope he does bounce back from this but I hope he bounces back in the business hes good at and thats selling cars and not property speculation

Mr. Presentable

I have had dealings with EP in several capacities down the years. I know a couple of the girls there socially, have met Christian (above) a couple of times, and been a small supplier to the group. I have without exception found them to be top quality people, and am saddened they find themselves in this situation. Without commenting on his business accumen, I am happy to say the staff in Mooney's reflect Paraic's personality - a decent human being.

THEDONWALDO

cvisser wrote: »

Guy's i have been reading the past 7 pages since last night and this morning, i worked in EP Mooney's until the worst day of my life yesterday! If you werent there you cant comment on it, it was the most emotional and tearfull time for alot of people and will never forget it. i am usually behind my desk making calls to customers regarding changing there cars/follow up/ service call's from my ACT (Database) instead i am here @ home and getting ready to sign on!!! I have been reading over and over the above 2 Paragraphs above and agree with parts apart from Selling thecars for nothing, it was allways the other way the i could not compete with any deals from our closest rivals who sell Nissan too and have garges all over the Country and run by Nissan Ireland! was never a level paying field for me, I only came up against deal on Monday, Nissan Qashqai 1.6 se Petrol MY 2010 with 3 years free servicing/rac/warranty for € 19,000 straight. Paraic loved selling car's, He would there @ 6:30 am every morning and would be there till 8pm, and people would be allways coming into see him to buys cars of him. Now i have to go now i'm getting a lift down to the dole office to join the Q!!!

Chin up Guy's & Gals, What wont kill us will make us Stronger, i'm not going down without a Fight.

Laters Guys

Christian.

Hi All

I agree with everything Chris has just said, I too worked for Mooneys for the last 13 years and yesterday was the worst day of my life and all staff of ep mooneys. hopefully we all will bounce back from this. there has been too many casualties in the motor trade.

Thanks

Colin

kravmaga

If a car scrappage scheme was introduced by the government in the forth coming budget would it help at all to car dealerships here in ROI.

I know they did this in Germany and UK......

I did business with EP Mooneys and always found them very professional

Just a shock that such a large dealership can go under.

Wonder how many more dealers are in the same position

Darragh29

The tragedy of all of this is that it takes many years to build up a service department, to get volumes of work up to a consistent level where it becomes profitable. Before you reach that point, you have to go through a period of loss making, then breakeven and during these times, you have to carry losses like overheads, staff wages, etc.

EP Mooney had clearly got a very well developed service department across all brands, as has been said above by a staff member, the service departments were very busy, obviously profitable, but all this hard work over the years must have been put on the table for big extravagant deals.

Even in a depression, their service departments were busy and their workshop were loaded. Not legally separating out the service business from the rest of the business that was getting involved in unsustainable growth was obviously a big mistake, but this shows the flawed logic, the money being made in large top end dealer service departments charging around 100 Euro an hour labour, was micky money compared to what could be made out of propety investment.

As for the comment above that the owner charged the business rent, this is normal in business, the owner buys the business asset and leases it back to the business.

VolvoMan

blueeyedboy wrote: »

If a car scrappage scheme was introduced by the government in the forth coming budget would it help at all to car dealerships here in ROI.

It wouldn't work. We have no motor industry here besides dealers and if such a scheme was introduced, it would only prolong the period until they are facing bankruptcy again.

Drummerboy08

The government need to look at some form of a subsidised scheme to get the banks lending again if they want to get the motor trade moving.

A scrappage scheme is worthless IMO.

smash

The problem is that they went buying up other garages that were in trouble in the hopes they could create a 'super chain' of garages like a car supermarket in the UK. they may have bought out the others cheaply but in a recession it was never going to work.

Darsad

VolvoMan wrote: »

It wouldn't work. We have no motor industry here besides dealers and if such a scheme was introduced, it would only prolong the period until they are facing bankruptcy again.

The main reason many are struggling is because of the massive in hand losses on second hand stock all dealers had to absorb thanks to the greens and the change to the VRTand road tax system combined with the economic down turn. Many have now worked through this loss while others have fallen by the way those now left to trade are hopefully in a better position to do so. If a scrappage scheme combined with finance been made available was offered i think it would give a much needed lift to a beleaguered industry and i dont think it will just prolong bankruptcy as you say but rather improve the prospects into the future.

GreeBo

I would just like to applaud EP Mooney for closing up before they are up to their eyes in debt and potentially bringing others (suppliers etc) down with them.

Darragh29

Drummerboy08 wrote: »

The government need to look at some form of a subsidised scheme to get the banks lending again if they want to get the motor trade moving.

A scrappage scheme is worthless IMO.

I'd argue here that what we are seeing with the closure of Belgard, EP Mooney and many more, and indeed many more yet to close, is a natural and inevitable shrinkage of the market back to where it actually ought to have been.

We had a few years here where new car sales went through the roof, these businesses acquired infrastructure to meet this demand, the demand was not long term sustainable or desirable, so what should happen now???

Unpleasant and unsavory as it surely is for the people working for these businesses, the only thing that should happen here is that the mrket must shrink back to where it ought to be, the infrastructure that was acquired by the Belgards, the EP Mooney's, is now very much surplus to requirements.

I'm not for a scrappage scheme, I think the job in the independent garage should be as fairly protected as the job in the new car sales showroom I think.

Even if we had a scrappage scheme, we know the banks are still not lending so where is the 17K as opposed to the 20K, or the 22K as opposed to the 25K for a new car going to come from???

People are no longer prepared to pay this money for a car, there was a brief period where the banks were throwing money around and giving anyone 20K for a car. Why should someone change their car every year???

I think some of the old rules of car ownership are now out the window and it's time the dealerships started facing up to the new reality instead of looking for state welfare for their businesses.

Think about this for a minute...

A service department with 6 service bays charging 80 Euro an hour + VAT...

Labour Revenue a day at 80% workshop efficiency, based on an 8 hour working day: 3,072 Euro, or 15,360 Euro a week.

This is before you look at revenue on parts, lubricants, etc...

If the NCT can make it work, why can't motor dealerships???

Drummerboy08

Darragh29 wrote: »

I'd argue here that what we are seeing with the closure of Belgard, EP Mooney and many more, and indeed many more yet to close, is a natural and inevitable shrinkage of the market back to where it actually ought to have been.

Thats the nail on the head IMO.

VolvoMan

steve06 wrote: »

The problem is that they went buying up other garages that were in trouble in the hopes they could create a 'super chain' of garages like a car supermarket in the UK. they may have bought out the others cheaply but in a recession it was never going to work.

I don't think that ever happened.

Jody S

I have been dealing with Koping Volvo Motors over the past few years with my own Volvo & our company cars. I didn't realise they where part of the EP Mooney Group & am shocked to find out today when I tried to book my car in that they have closed down,what a shame.
Over the past 3 years I have had dealings with 3 Volvo dealers & by far Koping Volvo was the best.The service & parts staff I found to be very helpful,nothing was ever problem. A few months ago my girlfriend had a puncture late on a Saturday afternoon & couldn't find anywhere to fix it,she had to do a lot of mileage with work that weekend & was uncomfortabe driving on the skinny spare wheel so out of desperation she drove down to Koping & recognised a chap getting in to his car,when he saw her he got out to see what she wanted & when she explained he told her to drive around to the back of the workshop where he opened up & took a wheel of a demonstration car while she waited & this was 6 o'clock in the evening.Typical of the service they give there customers.
The one thing that always struck me was their enthusiasm for Volvo Cars.
This I think comes from the owner Paul Mooney,before buying our car from him we test drove an S40 & by the time we got back to the garage my girlfriend had made our minds up for us,she was mightily impressed, his love,enthusiasm & knowledge for Volvo was infectious & we love our Volvo,although I don't get to drive it that often.
I hope they can turn things around & re open,Volvo & the industry needs dealers like this.I think I might wait a few weeks before I have the service done,maybe by then they might be back in action.
Best of luck to the management & staff.
Jody

Lord Trollington

Darragh29 wrote: »

I think some of the old rules of car ownership are now out the window and it's time the dealerships started facing up to the new reality instead of looking for state welfare for their businesses.

Think about this for a minute...

A service department with 6 service bays charging 80 Euro an hour + VAT...

Labour Revenue a day at 80% workshop efficiency, based on an 8 hour working day: 3,072 Euro, or 15,360 Euro a week.

This is before you look at revenue on parts, lubricants, etc...

If the NCT can make it work, why can't motor dealerships???

Apologies in advance for this long Post.

The motor industry in Ireland went from around 200,000 units a year to 60,000 units a year in a very short time.

Now i agree that the 200,000 new vehicle sales a year was never sustainable such a sudden and sharp decline in vehicle sales is threatening the thousands of Jobs in the Motor Trade.

The closure of EP Mooneys is going to have a knock on effect in practially every business in the surrounding areas.

Its suppliers,local shops,restaurants,Petrol stations ect ect ect.

Further decreasing spending and further deflating the economy.
Not to mention less Revenue and VAT inake from the government from all this.

A scrappage scheme would help garages adjust to the sharp fall in sales and further job losses and garage closures. Is a short term solution to allow garages to get their "houses" in order.

How is a scrappage scheme in your eyes a "welfare" from the state as in the long run any vehicle sold through a scrappage scheme would actually be of benefit to the state in terms of VAT intake??

You also touch on the charges of service departments.

There is plenty of garages out there for people to shop around for good deals.

You could get Jimmy down the road to service your car, who is not paying any Tax,VAT, Insurance on his property,Rates to the local authority not providing any employment to the locality and contributing nothing to the economy other than the money he puts in his own back pocket.
That is an option.

But whilst people do that, in the next breath they cannot give out about the recession and the rapid decline in the economy because people who do this are a contributor to its decline.

crosstownk

Anyone know if this has an impact on Westpark Fitness? It was owned by Mooney's - not sure if it still is.....

THEDONWALDO

westpark is remaining open, it is just the dealerships in lmr, naas rd and airton rd that are in liquidation. paraic mooney is an owner of westpark

Mr.Boots

Fellas....Get it into your head...the scrappage scheme wont work!!
The banks are closed for business and have been for some time.
When NAMA kicks in it might help matters...but thats a might.
The scrappage scheme is like giving someone a bowl of soup with no spoon to drink it.

Darragh29

whycliff wrote: »

Apologies in advance for this long Post.

The motor industry in Ireland went from around 200,000 units a year to 60,000 units a year in a very short time.

Now i agree that the 200,000 new vehicle sales a year was never sustainable such a sudden and sharp decline in vehicle sales is threatening the thousands of Jobs in the Motor Trade.

The closure of EP Mooneys is going to have a knock on effect in practially every business in the surrounding areas.

Its suppliers,local shops,restaurants,Petrol stations ect ect ect.

Further decreasing spending and further deflating the economy.
Not to mention less Revenue and VAT inake from the government from all this.

A scrappage scheme would help garages adjust to the sharp fall in sales and further job losses and garage closures. Is a short term solution to allow garages to get their "houses" in order.

How is a scrappage scheme in your eyes a "welfare" from the state as in the long run any vehicle sold through a scrappage scheme would actually be of benefit to the state in terms of VAT intake??

You also touch on the charges of service departments.

There is plenty of garages out there for people to shop around for good deals.

You could get Jimmy down the road to service your car, who is not paying any Tax,VAT, Insurance on his property,Rates to the local authority not providing any employment to the locality and contributing nothing to the economy other than the money he puts in his own back pocket.
That is an option.

But whilst people do that, in the next breath they cannot give out about the recession and the rapid decline in the economy because people who do this are a contributor to its decline.

Right, if a business takes on serious debt on the mistaken belief that 200,000 units being sold a year is a long term viable situation, and they then find themselves in a position where sales fall off a cliff back down to 60,000 units a year, they can do whatever housekeeping they want, but the business has already been compromised. It's not an easy thing to just shrink the business back down to where it should be, after you've guaranteed loans and taken on substantial risk.

If it were other options available here, scrappage scheme or no scrappage scheme, I imagine that they would have been availed of... There are no other options, no amount of housekeeping can sort these businesses out, they are immersed in debt and are basket case businesses now...

Furthermore, "Jimmy down the road", could be fully registered for tax, be can be running a totally legitimate business with a better level of service and offer you better value than the main dealer with the fancy glass showroom that charges you over 100 Euro an hour labour to pay for it...

A scrappage scheme is industrial welfare for those that have traded recklessly. Many businesses in the industry can turn a few bob, make a bit of profit and get on with it. As I've pointed out, the NCT can make plently of money running a professional operation without scabbing for welfare...

Lucifer

Darragh29 wrote: »

As I've pointed out, the NCT can make plently of money running a professional operation without scabbing for welfare...

Saying that the NCT can manage to make money is a bit silly I think. There is a law which states that every car in the country over 4 years old must use their service every 2 years! If they brought out a new law tomorrow stating that every car in the country had to use the garage I work for once every 2years for a check over we would be laughing! And also you give out about main dealers charging €100 an hour... an NCT test is €50 and takes less than a half hour so they are charging more and it is compulsory!

TomMc

Lucifer wrote: »

Saying that the NCT can manage to make money is a bit silly I think. There is a law which states that every car in the country over 4 years old must use their service every 2 years! If they brought out a new law tomorrow stating that every car in the country had to use the garage I work for once every 2years for a check over we would be laughing! And also you give out about main dealers charging €100 an hour... an NCT test is €50 and takes less than a half hour so they are charging more and it is compulsory!

But you could also argue that an NCT test centre / testers give a car a comprehensive examination in that 30 minutes. Would franchised dealers be as productive in the same amount of time, I doubt it. Plus they would have vested interests to find faults for their own financial ends. Where as the NCT's business is entirely to do with safety of vehicles, nothing more.

Lucifer

I agree with your point. You would be doing well to get another garage to give it the same check for the price. But to say they manage to do ok is a bit rich given the fact that there is a law to say we have to use them and they charge about the same as some main dealers charge per hour. I work for a main dealer and we dont charge anything near €100 per hour, we simply wouldnt get the business these days if we did.

TomMc

Also as the NCT do not carry out any mechanical work themselves, when they fail a vehicle it automatically generates work the motor trade.

It seems like Franchised Dealers want it all their own way. They have become one of the main whingers in business / society now.

Darragh29

Lucifer wrote: »

Saying that the NCT can manage to make money is a bit silly I think. There is a law which states that every car in the country over 4 years old must use their service every 2 years! If they brought out a new law tomorrow stating that every car in the country had to use the garage I work for once every 2years for a check over we would be laughing! And also you give out about main dealers charging €100 an hour... an NCT test is €50 and takes less than a half hour so they are charging more and it is compulsory!

At the end of the day, the NCT is a model of efficiency, transparency and fairness. There isn't an aftersales outlet in the country that would issue you with the same report for anywhere close to the same price. What amazes me is that I know many dealerships that have invested tens of millions of Euro in a showroom, I don't know that many that have invested in an NCT test lane for their aftersales customers, costing around 20K plus VAT.

These dealerships need to get back to a place in their heads where 50% of their business is going through their aftersales and parts department, and 50% of their business is going through sales. There is a model that works for dealerships, it has worked for many years in places like Belgard Motors and EP Mooneys, these guys departed from the working model and the consequences are there for everyone to see now... Should they be bailed out and subsidised by the state for departing from a profitable business model and embracing a reckless business model??? I'd argue no they should not...

This is how capitalism works and this is how it really should work, and I say this as a guy who had a business fail a few years ago. You take your chances and you do your best, if you succeed you succeed and if you fail you fail, all capitalism depends upon it!

What are we being asked to do here, take the risk out of entrepreneurship?!?!?!?

Seth Brundle

Lucifer wrote: »

Saying that the NCT can manage to make money is a bit silly I think. There is a law which states that every car in the country over 4 years old must use their service every 2 years! If they brought out a new law tomorrow stating that every car in the country had to use the garage I work for once every 2years for a check over we would be laughing! And also you give out about main dealers charging €100 an hour... an NCT test is €50 and takes less than a half hour so they are charging more and it is compulsory!

Isn't the NCT contract awarded on a fixed price basis and any profit going to the government?

brandon_flowers

kbannon wrote: »

Isn't the NCT contract awarded on a fixed price basis and any profit going to the government?

Yes it is, didn't a Spanish crowd win the contract early this year.


Edit: Googled it. Applus RTD won it and they have it for ten years!

Beep Beep

<snip>

Hellrazer

Jesus at least let the lads get over the loss of their jobs before pimping your business.

Theres a lot of us here in the trade that could have pimped our businesses 5/6 pages ago but we have a bit of decency.

Beep Beep wrote: »

shilling stuff removed

Lord Trollington

Darragh29 wrote: »

These dealerships need to get back to a place in their heads where 50% of their business is going through their aftersales and parts department, and 50% of their business is going through sales. There is a model that works for dealerships, it has worked for many years in places like Belgard Motors and EP Mooneys, these guys departed from the working model and the consequences are there for everyone to see now... Should they be bailed out and subsidised by the state for departing from a profitable business model and embracing a reckless business model??? I'd argue no they should not...

This is how capitalism works and this is how it really should work, and

Again you claim that a scrappege scheme is a bail out or subsidy from the government, on what basis do you make this claim?

Darragh29

whycliff wrote: »

Again you claim that a scrappege scheme is a bail out or subsidy from the government, on what basis do you make this claim?

Because that is what is it!!! It is a discount generated on the book value on a new car, paid for by the government, with only one requirement, which is that you are scrapping a car. This discount last time around I think was around 3,000 Euro, the government picks up the tab for this on the basis that the customer who is party to the transaction is scrapping a car as part of the transaction.

If this isn't a state subsidation of a sale, then what is it???

There is an agenda at play here that you might not be aware of, which is that dealerships have been on a mission over the last few years to get as many people to trade their cars in every single year for a new car.

People are now not prepared to buy a new car every year. The market is sending a very clear message to dealers, and dealers don't want to hear that message, so they are going back to the government saying, "we need you to interfere in the market"...

People don't have a couple of thousand Euro a year now to upgrade their car so that they can have a newer car than their neighbour, this is the reality of the situation. Just like we had to learn that a house is for living in, and not investing in for wealth aquisition, we are now learning that cars are really for getting around in and not for having the newest car on the block to make a statement about yourself. The market has changed, I don't see it going back to where it was, for a very long time if it ever does at all, and unfortunately this means that people who built business operations that were based on an illusion (which was that new car sales would grow exponentially), are going to lose their investment. Consequently, jobs will be lost and the conversation I think we ought to be having now, is not how do we stop the job losses that regrettably have to happen, but how do we make sure that we don't arrive back in this place again...

Lord Trollington

Darragh29 wrote: »

Because that is what is it!!! It is a discount generated on the book value on a new car, paid for by the government, with only one requirement, which is that you are scrapping a car. This discount last time around I think was around 3,000 Euro, the government picks up the tab for this on the basis that the customer who is party to the transaction is scrapping a car as part of the transaction.

If this isn't a state subsidation of a sale, then what is it...

Its not a discount generated on the book value of a car.There is no "Tab" for the government to be picked up.
Its of no cost to the state or tax payer, and it would actually increase revenue for the goverment.

For example a new micra costs €16,000 in round figures.

€3000 of that is VRT. Which leaves €13,000. VAT @ 21.5% of this is €2301.

If the government introduced a €3000 scrappage offer, it would be in effect a cancelling out the VRT on most models.

They would still be recieveing revenue in terms of VAT. In this case €2301

A scrappage scheme is to target people who wouldnt have had it in mind to change their car, they're driving an old car and feel it is worthless.

Once again it would cost the government and Tax payer nothing.

If cars are not selling the government recieve no VAT and no VRT.

Big Nasty

The scrappage scheme would be a short term quick fix - even if it was approved, based on your figures, one would still need €10k+ on finance for most ordinary cars and 70% of people are being refused finance.

smash

whycliff wrote: »

Once again it would cost the government and Tax payer nothing.

And it wouldn't save jobs, there's been plenty of threads about this! read here

Darragh29

whycliff wrote: »

Its not a discount generated on the book value of a car.There is no "Tab" for the government to be picked up.
Its of no cost to the state or tax payer, and it would actually increase revenue for the goverment.

For example a new micra costs €16,000 in round figures.

€3000 of that is VRT. Which leaves €13,000. VAT @ 21.5% of this is €2301.

If the government introduced a €3000 scrappage offer, it would be in effect a cancelling out the VRT on most models.

They would still be recieveing revenue in terms of VAT. In this case €2301

A scrappage scheme is to target people who wouldnt have had it in mind to change their car, they're driving an old car and feel it is worthless.

Once again it would cost the government and Tax payer nothing.

If cars are not selling the government recieve no VAT and no VRT.

Cars are selling right now no problem at all, they are just not new cars. I'm hearing that cars selling for the 5-6K mark are moving no bother. There is more to the motor industry than new car sales! I'm hearing that independent garages have no shortage of work, only there is more shopping around for prices now and you have to fight a bit harder for the work, but it is out there if you are prepared to haggle a bit for it and look after your customers...

I don't think that there is any getting away from the fact that there are insolvent dealers out there who will have to close and no amount of scrappage deals or any other subventions will turn this around, as we've seen from recent closures, some of these businesses are leveraged up to the absolute hilt with non-motor business activities, increasing their new car sales by a few a week will not improve their situation.

Even if scrappage was brought back, banks still are not lending, people are still not spending, the notion that people want to change a car every year is now completely out of fashion... The message couldn't be clearer I think, people don't want new cars now, they don't want to change every year, they are more interested I think in getting some decent standard of service when they have to get work done, and getting it done at a better price and maybe getting a "thank you" when you pay...

And there is a "tab" for the government to be picked up, say the scrappage scheme doesn't make an impact on new car sales... You have the same number of cars being sold with a 56.6% fall in the tax that you failed to collect because you basically forfeited it to get the same volume of sales nationally. We are living in extraordinary times, and it is no longer as simple as discounting the tax liability in order to stimulate sales, when there are other factors at play here, for example banks still won't lend and people still will not spend money when their salaries are being cut and they are not confident they will have a job this time next year.

TomMc

+1 and I'm sure most dealers would prefer to shift existing second hand stock on their books first of all (in straight deals) than merely sell only brand new cars. Better to liquidate existing assets and get some cash flow in, than just new car sales commission.

Cuddlesworth

whycliff wrote: »

Vrt etc

We don't make cars. No matter what way you look at it, its a incentive to actively give money to other economies. Overall we would be far better off with little to no car sales.

R.O.R

Cuddlesworth wrote: »

Overall we would be far better off with little to no car sales.

How the hell do you come to that conclusion? On the figures posted on the previous page (which aren't far off the mark) there is €6,000 going to the Revenue for a small new car.

If you cut off that revenue stream for the government, then they have to make that money back somehow and everyone's taxes go up.

I don't fancy that much.....

sparklepants

Cuddlesworth wrote: »

We don't make cars. No matter what way you look at it, its a incentive to actively give money to other economies.

This bit I agree with.

Overall we would be far better off with little to no car sales.

This bit I disagree with. By that logic we'd be far better off with no imports of any kind. No cars, no buses, no trains, no electronic equipment, no steel, etc. What do you think we'd be left with?

Cuddlesworth

R.O.R wrote: »

How the hell do you come to that conclusion? On the figures posted on the previous page (which aren't far off the mark) there is €6,000 going to the Revenue for a small new car.

And at least 8k leaving the economy. Where as in England which manufacturers cars that figure would be around 1k, maybe even less.

R.O.R wrote: »

If you cut off that revenue stream for the government, then they have to make that money back somehow and everyone's taxes go up.

Numerous reports and recommendations over the years have clearly stated that the government should move away from stealth tax's and move more towards a predictable model of direct taxation. It might as well start now.

R.O.R wrote: »

I don't fancy that much.....

The deficit implies that everybody's tax's are going to go up. Regardless. and government expenditure has to go down. Spending money we don't have is not a answer to the problem.

Cuddlesworth

sparklepants wrote: »

This bit I agree with.
This bit I disagree with. By that logic we'd be far better off with no imports of any kind. No cars, no buses, no trains, no electronic equipment, no steel, etc. What do you think we'd be left with?

Nothing. Currently the only thing keeping this country afloat is the low corporation tax. We have trillions filtered through tiny multinational offices in the IFSC all year round availing of this low rate.

Other then that, we don't have any real exports and we import close to everything. We are completely unsustainable as a country and Island.

Cionád

R.O.R wrote: »

If you cut off that revenue stream for the government, then they have to make that money back somehow and everyone's taxes go up.

I don't fancy that much.....

True, but if you move taxation to a model of usage instead of taxing at the source its more sustainable. A key reason why the public finances have crumbled is people no longer buying cars (VRT) or houses (Stamp Duty). Replacing stamp duty with a property tax, and VRT with a usage-based model will guard against this boom-bust problem.

As for a scrappage scheme, that is a terrible idea economically, environmentally and morally.

PixelTrawler

whycliff wrote: »

Its not a discount generated on the book value of a car.There is no "Tab" for the government to be picked up.
Its of no cost to the state or tax payer, and it would actually increase revenue for the goverment.

For example a new micra costs €16,000 in round figures.

€3000 of that is VRT. Which leaves €13,000. VAT @ 21.5% of this is €2301.

If the government introduced a €3000 scrappage offer, it would be in effect a cancelling out the VRT on most models.

They would still be recieveing revenue in terms of VAT. In this case €2301

A scrappage scheme is to target people who wouldnt have had it in mind to change their car, they're driving an old car and feel it is worthless.

Once again it would cost the government and Tax payer nothing.

If cars are not selling the government recieve no VAT and no VRT.

By your own figures, the government gets reduced revenue on a scrappage scheme. You could argue this is in fact costing them money vs a non scrappage scheme car.

You also have to wonder with money this tight at the moment will a scrappage scheme of 2k really make that much of a difference to a buyer.

You'd nearly negotiate that off a dealer these days.

PixelTrawler

Cionád wrote: »

True, but if you move taxation to a model of usage instead of taxing at the source its more sustainable. A key reason why the public finances have crumbled is people no longer buying cars (VRT) or houses (Stamp Duty). Replacing stamp duty with a property tax, and VRT with a usage-based model will guard against this boom-bust problem.

As for a scrappage scheme, that is a terrible idea economically, environmentally and morally.

The only snag with a usage scheme or motor tax on petrol etc, is people suffer from bad planning by being forced to live long distances from work. Public transport just isnt there.

Lord Trollington

Solyad wrote: »

By your own figures, the government gets reduced revenue on a scrappage scheme. You could argue this is in fact costing them money vs a non scrappage scheme car.

You also have to wonder with money this tight at the moment will a scrappage scheme of 2k really make that much of a difference to a buyer.

You'd nearly negotiate that off a dealer these days.

Its an incentive to boost car sales,the figures suggest an extra 20,000 cars would sell in 2010 if a scrappage scheme was intorduced. Thats an extra 20,000 cars that the government can take in VAT on.

most people availing of a scrappage scheme would not have considered buying a new car as it falls out of there budget but with the scrappage it brings a new car into the loop.

So in fact the govenment would be getting revenue they would not have got without a scrappage scheme.

Regarding negotiating a better price, if a government introduced a scrappage scheme, it doenst eat into any margin that the dealer has so they can give them discount on a new car along with the scrappage deal from the government.

Lord Trollington

Cuddlesworth wrote: »

We don't make cars. No matter what way you look at it, its a incentive to actively give money to other economies. Overall we would be far better off with little to no car sales.

Majority of what we purchase in Ireland is imported, whether it be cars, clothes, electronic goods and some food products.

That computer you that rediculous statement on was more than likely made in china.

PixelTrawler

whycliff wrote: »

Its an incentive to boost car sales,the figures suggest an extra 20,000 cars would sell in 2010 if a scrappage scheme was intorduced. Thats an extra 20,000 cars that the government can take in VAT on.

most people availing of a scrappage scheme would not have considered buying a new car as it falls out of there budget but with the scrappage it brings a new car into the loop.

So in fact the govenment would be getting revenue they would not have got without a scrappage scheme.

Regarding negotiating a better price, if a government introduced a scrappage scheme, it doenst eat into any margin that the dealer has so they can give them discount on a new car along with the scrappage deal from the government.

I've yet to be convinced it actually boost sales, merely brings forward future sales at their expense. Long term there may be little net gain overall.

If the person buys a new car now, they probably wont in a year or two again, when they might have normally.

If the government give 20000 discounts now, thats a lot of cash lost (although granted they get cash flow right now, overall / long term its a loss for them)

Lord Trollington

Solyad wrote: »

I've yet to be convinced it actually boost sales, merely brings forward future sales at their expense. Long term there may be little net gain overall.

If the person buys a new car now, they probably wont in a year or two again, when they might have normally.

Without a scrappage they may opt to buy second hand.

It will boost sales, it has done so throughout Europe when introduced.

PixelTrawler

Thats still a sale! Whats the markup on a new car versus a second hand, to a dealer?

Darragh29

One of the major problems with a scrappage scheme is that many dealers cannot take a trade in or cannot give the price sought for it because they already have excess used 07, 08 and 09 stock over 10K in value that they cannot shift.

quietsailor

Cionád wrote: »

.As for a scrappage scheme, that is a terrible idea economically, environmentally and morally.

A scrappage scheme is a GOOD idea environmentally. I can't argue the other pros and cons of the scheme ie revenue intake, VRT intake to the government, sales for the dealers but, if the scheme was put in place with with a ruling that only cars over eg 10 years of age or below a certain environmental efficency can avail of 100% of the scheme you will see a lot of the older polluting cars taken off the road.

Maybe for other cars eg ones who are newer/manufacturer claims they have a low emissions but they are high mileage a sliding scale could be introduced. - We're already taxing on emissions, why can't we use this info for a scrappage scheme.

One downfall I can see though is that cars which are future classics eg an exotic audi like an RS4 from the 90's which isn't anywhere near a classic now may be scrapped. But there is nothing we can do about that unless you want to buy it and put it in a garage