SIMI (Society of the Irish Motor Industry) today announced its proposal to government for the 2014 Budget. 'Swappage' would see a reduction of €2,000 on the VRT (Vehicle Registration Tax) paid with the purchase of every new car sold in cases whereby the car being traded in is six years old or older.
It is a proposal that is not too dissimilar to the popular scrappage schemes that have run in the past and given that the current age of a car in Ireland is estimated to be 8.7 years old, it means that this scheme - were it to be put into place - would be open to a considerable number of people. SIMI says the benefits are possible on a number of levels, particularly in the area of employment. It estimates that up to 2,200 new jobs both directly and indirectly could be created by the scheme. The Exchequer could also benefit to the tune of an estimated €129 million.
Alan Nolan, SIMI Director General added: "Similar to Scrappage but much more beneficial to the Exchequer, Swappage has the potential to deliver an even greater benefit but at no greater risk to tax revenues, the Industry or the State. If Swappage is introduced next year, it could help new car sales reach 90,000. On top of that, there would be an increase in used car sales and servicing due to the cycle of business generated by the resale of trade-ins and local jobs and businesses in 400 towns across the country would be protected."
Anything else?
In the proposals, SIMI estimate that up to 17,000 additional sales could come as a result of the Swappage scheme, which would be of huge benefit to an industry that has struggled for the last number of years. Naturally though, a lot of these proposed figures would also need to factor in consumer desire and ability to fund the purchase of these cars.