Why Are Cars So Expensive in Ireland – If you’re living in Ireland, you may have noticed that cars tend to be much more expensive here than in other countries.
In fact, Ireland has some of the highest car prices in Europe, with the cost of a new car averaging around €30,000.
But why exactly are cars so expensive in Ireland? In this article, we’ll explore the various factors that contribute to the high cost of cars in Ireland and provide some insights into why this is the case.
Reason Why Are Cars So Expensive in Ireland
Taxes and Duties
One of the main reasons why cars are so expensive in Ireland is due to the high taxes and duties that are applied to them.
When you purchase a car in Ireland, you’ll be hit with a number of taxes and duties, including Vehicle Registration Tax (VRT), Value Added Tax (VAT), and Motor Tax.
VRT is a tax that is based on the CO2 emissions of the car. The more CO2 emissions a car produces, the higher the VRT will be.
For example, if you purchase a car that produces less than 80g/km of CO2 emissions, you’ll pay just 7% VRT.
If you purchase a car that produces more than 225g/km of CO2 emissions, you’ll pay a whopping 36% VRT.
VAT is another tax that is applied to cars in Ireland. Currently, the standard rate of VAT is 23%, which is added to the purchase price of the car. This means that if you purchase a car for €30,000, you’ll pay an additional €6,900 in VAT.
Motor Tax is an annual tax that is applied to all cars in Ireland. The amount of motor tax you’ll pay depends on the CO2 emissions of the car and the engine size. For example, if you purchase a car with a 1.6L engine and CO2 emissions of 120g/km, you’ll pay €270 per year in motor tax.
All of these taxes and duties can add significantly to the cost of a car in Ireland. In fact, according to a recent study by the AA, VRT, and other taxes can account for up to 50% of the total cost of a car in Ireland.
Limited Market Size
Another reason why cars are so expensive in Ireland is due to the limited market size. Ireland is a relatively small country with a population of just under 6 million people.
This means that there is a relatively small market for cars in Ireland compared to other European countries.
The limited market size in Ireland can affect the supply and demand of cars, which can lead to higher prices.
With a smaller market, car manufacturers may not be as incentivized to bring their cars to Ireland, as it may not be as profitable as other larger markets.
The lack of competition in the Irish car market can also contribute to higher prices. With fewer car dealerships and manufacturers in Ireland, there is less competition, which can drive up the prices of cars.
Import Costs and Shipping
Importing cars into Ireland can also contribute to the high cost of cars. When you import a car into Ireland, you’ll be hit with a number of additional costs, including shipping and handling fees, import duties, and customs fees.
The cost of importing a car can vary depending on the country of origin of the car.
For example, if you import a car from a non-EU country, you’ll be hit with additional import duties and customs fees, which can add significantly to the overall cost of the car.
Another factor that can contribute to the high cost of cars in Ireland is insurance costs. In Ireland, car insurance can be quite expensive, with the average cost of insurance for a new driver ranging from €1,200 to €2,500 per year.
Insurance costs are based on a number of factors, including the age of the driver, the type of car being insured, and the location of the driver.
In Ireland, insurance costs are influenced by a number of factors, including the high number of uninsured drivers on the road, which can increase insurance premiums for law-abiding drivers.
Insurance companies in Ireland are subject to a number of regulations, which can increase their operating costs and ultimately result in higher insurance premiums for customers.
Inflation can also contribute to the high cost of cars in Ireland. Inflation is the general increase in prices of goods and services over time.
In Ireland, inflation has been relatively high over the past decade, with prices for many goods and services increasing year on year.
This means that the cost of cars in Ireland is likely to increase over time, as car manufacturers and dealerships pass on the increased costs of inflation to their customers.
The high levels of inflation in Ireland can also contribute to higher taxes and duties on cars, as the government may need to increase these taxes to keep up with inflation.
Will car prices come down in Ireland?
It’s difficult to predict whether car prices will come down in Ireland as it depends on a variety of factors such as changes in taxes and duties, exchange rates, market demand, and inflation.
With the increasing popularity of electric and hybrid cars, there may be more competition in the market which could potentially drive prices down in the future.
What is the most bought car in Ireland?
As for the most bought car in Ireland, according to the latest statistics from the Society of the Irish Motor Industry (SIMI), the Toyota Corolla is currently the most popular car in Ireland.
This is followed closely by the Hyundai Tucson, the Volkswagen Golf, and the Ford Focus. However, this can vary depending on factors such as market trends and the availability of certain models.
In conclusion, there are a number of factors that contribute to the high cost of cars in Ireland, including taxes and duties, limited market size, import costs, insurance costs, and inflation.
While these factors can make cars more expensive in Ireland, there are ways to save money when purchasing a car, such as buying a used car, negotiating with dealerships, and shopping around for the best insurance rates.
It’s important to understand the various costs associated with purchasing a car in Ireland so that you can make an informed decision when it comes to buying a car.
With a little bit of research and planning, you can find a car that meets your needs and budget, without breaking the bank.