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The price of new cars could rise in January if reports about planned VRT hikes ring true. PA/PA Wire/Press Association Images

Vehicle registration tax hikes 'understandable but disappointing' - AA

It’s reported today that changes to the vehicle registration system will likely send the price of new cars even higher.

AA IRELAND has said reported plans to change Ireland’s system of vehicle registration – which would probably see a significant increase in the price of new cars from next year – is understandable but a disappointment for motorists.

The Auto Trade Journal reports that the current ‘A’ band representing low-emissions vehicles is to be split in four – meaning that some cars which currently qualify for tax at 14 per cent of their market prices could see the rate increased to 17 per cent.

Similar incremental bands are reportedly planned for less efficient vehicles – which could see a serious increase in the tax paid by motorists to register a new car.

Conor Faughnan of AA Ireland offered a mixed reaction to the reports. ”On the one hand it is very disappointing – motorists will be very angry when they read about it,” he said.

“Tax on cars is going to increase, then there’s the additional tax that we’re now paying on motor insurance costs, and the ongoing expansion of the motor tax that everybody pays.”

Faughnan said the reform of vehicle registration taxes in 2008, which had been intended to incentivise the purchase of low-emissions cars, had been tremendously effective – but the system had not been future-proofed at the time.

“The legislation at the time stayed silent on what would happen if car technology continued to improve, and it has done,” he said.

Using 2008 emissions standards as the basis for taxation in 2013 is hopelessly out of date. It’s like using six-year-old standards for modern mobile phones.

The adaptation of the system, which had failed to anticipate improving emissions standards in new cars, meant it was now possible to pay less motor tax on a €55,000 luxury car than it was on “an eight-year-old petrol runabout”.

“We do understand that context, but there’s no doubt that how you dress it up: this is a tax increase,” he said.

Motorists were already “extremely angry” at the rising costs of motor tax and fuel, and an increase in the outright cost of buying a car in the first place “might make us more reluctant to believe future promises”, he said.

Poll: Should the number 13 be taken off car licence plates next year?

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