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What motorists should expect in Budget 2013

VRT increases, road tax increases, and a new registration plate system.

THE HEADY MIX of petrol, motor tax and car insurance makes being on the road an expensive facet of everyday life for many Irish households.

And as Budget 2013 approaches, it looks like the bill is set to grow significantly.

While we’re not sure what is in store for petrol prices, the changes to vehicle registration tax (VRT) and motor tax, as well as possible increases in VAT, will almost certainly make it more expensive to purchase or upgrade a vehicle.

Other changes already flagged to motorists and the car sales industry include a new registration plate system.

Spokesperson for Society of Irish Motor Industry, Suzanne Sheridan told TheJournal.ie that the representative group is worried about possible changes, but said that consultations had taken place this year.

“We don’t want increases, especially at this time,” she said.

VRT and Road Tax

In a document seen by TheJournal.ie, SIMI told members that they are facing an average VRT increase of 2.5 per cent from the 1 January 2013. According to one car dealer, this will see the price of a typical Ford Mondeo rise by between €800 and €920.

The new structure will see vehicles in the A1, A2, A3 and A4 bracket in the 14 per cent to 17 per cent bracket; the B1 and B2 at 18 and 19 per cent bracket, while C, D, E, F and G will be charged at between 23 per cent and 36 per cent.

The Government has also made promises to the Troika to increase road tax payable by vehicle owners. The four-year-plan flags a restructuring of the tax to reverse the fall in revenues seen after the CO2-based system was introduced in 2008.

By the end of last year, the intake from VRT had reduced from an average of 26 per cent to just 16 per cent, while road tax reduced from an average of €480 for cc based cars to an average of €220 for those on the CO2 scheme.

Although SIMI have not been brief on the road tax increases, it understands the new band structure will be likely to follow that of the new VRT system.

Registration Plate Change

One change that has been hailed as a positive by SIMI is the new registration plate system.

From next year, there will be two distinct registration periods. Cars bought and registered between January and end-June will use the 131 number, while those purchased between July and December will use 132. The system works around fears about the superstitions people hold about the number 13 but SIMI also hopes it will spread car sales more evenly across the whole year.

George Mordaunt, owner of the Mordaunt Group which sells used-cars, does not see any positives in the changes – for the consumer or the sector.

“This industry is absolutely on its knees,” he told TheJournal.ie. “We’ve just had our most challenging year ever and numbers may not even pass those seen in the 1980s.”

He called the registration system change “nothing more than a decoy or distraction”.

In more bad news for motorists, any potential rise in VAT will add to the price of a new vehicle.

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