What's the news?
Next year could be the bumper year that the Irish motor industry has been waiting for if the latest findings from vehicle data expert Cartell.ie are to be believed. The bumper year is reliant on the right incentives being available but, with up to 42,000 cars currently in the Irish fleet that would have ordinarily been traded in, we could see a turn around.
With the downturn in the economy many car buyers are holding onto their cars for longer as evidenced by Cartell.ie's extensive research that shows not only is the average age of the fleet growing but many cars are still on the first owner. For pre-2009 cars at least; those able to purchase cars since the recession took hold are changing them at accepted, pre-recession, intervals of between three and five years, usually in line with car finance terms.
It is pre-2009 cars that account for the 42,000 overhang and Cartell.ie believes that, with the right incentives, owners of these cars may be encouraged to re-enter the new car market. The recently proposed SIMI 'Swappage' scheme, whereby a VRT rebate of up to €2,000 is given to the purchaser of a new vehicle where a vehicle that is six years or older is traded in, is one such incentive and one that is welcomed by Cartell.ie. Owners of these older cars have not been able to re-enter the market for a variety of reasons (lack of credit likely being the main one), but the change to emissions-based tax in 2008 means that demand for these older cars is lacking, increasing the 'cost to change' factor for owners. With the 'Swappage' €2,000 VRT rebate this cost to change gap may be bridged resulting in more car sales next year.
Anything else?
The Cartell.ie study does not take into account those who have imported a vehicle or those vehicles on their second or subsequent owner. These owners too could likely benefit from Swappage meaning the 42,000 figure could be only the beginning - here's hoping!