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Registrations of new cars fell by 13.8 per cent in October, compared to the same period in 2016, according to figures released by the Society of the Irish Motor Industry (SIMI). That means that the total market fall this year remains depressed by 10.7 per cent overall. The number of used cars imported from the UK, which is still cited as one of the main reasons for the fall-off in new car sales, rose by 20.1 per cent in October, and is up by 35.6 per cent for the year to date.
That means that 79,322 UK cars, made cheaper by the Brexit-led fall in the value of Sterling, have been imported, compared to 130,504 new car sales. That's enough for an estimated €1,385.3-million in contributions to the national exchequer, according to SIMI, a modest fall of 1.78 per cent on 2016.
In its third quarterly review of the year, SIMI pointed out that fuel has become more expensive (both petrol and diesel have risen by around five per cent this year), while the price of a new car has actually fallen, on average, by 3.5 per cent. Insurance costs are 14 per cent lower than at this time last year, but are shockingly 44 per cent higher than the same period in 2013.
SIMI also pointed out a potential concern in the banning of some older, more polluting models from city centres in the UK. It's possible, even likely, that many of these older models will become heavily devalued, and could be exported to Ireland along with the rest of the rising tide of imports, putting more pressure on Irish used car values, but also effectively importing pollution from the UK.
Jim Power Economist and author of the SIMI report said: "The surge in used imports from the UK effectively means that those prices are now setting prices for the domestic second-hand car stock, and this is making the cost of change to a new car more expensive and is also serving to undermine new car sales. In normal circumstances, the positive economic backdrop would be expected to deliver growth of up to 20 per cent in the new car market in 2018. However, the distortionary impact of sterling weakness and the associated surge in used imports from the UK will in all likelihood more than offset the positive economics."
Brian Cooke Deputy Director General SIMI commented: "In a recent survey our members confirmed Jim Power's observation that Irish used car values have dropped, with members indicating a 15 per cent reduction year on year, and indications are that this trend will continue. On the positive side this means that there is real value to be had for consumers looking for a used car; however, this is a doubled edged sword and it also means their used car is devalued on a trade in, thus impacting negatively on their cost to change".