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Why are cars a rip-off in Ireland?

My question is: why are cars in Ireland a rip-off compared to the rest of the world? I live in the USA and just bought a 2010 Hyundai Santa Fe top-of-the-line model with leather, navigation, Onstar system and many more items for just $21,000.

Hyundai changes a few things on each of its models every year. The Santa Fe in Ireland has been the same since the model was realesed in 2007. Why are the specs so bad in Irish cars? And why are the people putting up with it? Who makes the decision to sell cars like that in Ireland?

The cars in the UK are much better spec wise. If you look at people carriers, the options in Ireland are so small and silly. Take a look at the new 2011 Toyota Sienna. It is a very nice car. Why can Irish people not get these kinds of cars?

Thanks, Raymond


Aug 2010 Filed under: taxation

Expert answer

Hello Raymond,

One word: tax. The United States and our near neighbours the UK aren't subject to anything like the taxation that we are when it comes to cars. The base price of our cars before you add VAT and Vehicle Registration Tax (VRT) have always been among the lowest in Europe. But when you add the taxes obviously the cars start becoming expensive. 

But also, because these taxes are also on optional extras (including safety features) then car distributors often have to bring in very basic versions so that the ordinary buyer can afford them. Hence, items that you would normally see as standard in other markets have often been taken out, even if this is something like ESP, which is a life-saving safety device. 

Those selling the cars have to do this because of how much of the car's value is going to the Government coffers. It has long been an issue in Ireland and one that the EU have taken a strong interest in too, because it sees it as double taxation on an item, which is against EU law. 

There are also other issues in relation to strengths of currencies at any given time and also that the USA has a manufacturing supply, so specific US-built cars are sold there and aren't treated as imported vehicles. Of course the US is a massive market and hence economies of scale come into play, where as Ireland is a tiny market in comparison.

Prices have come down here because at least now cars are taxed on their CO2 emissions and not their engine size, which was the case until July 2008 and made little sense. It meant that nobody bought diesel cars but instead bought small, underpowered petrol ones instead. 

With petrol (or should I say 'gas') much cheaper in the US, it has always been easier to buy V6, V8 or even V12 petrol cars there too.

Obviously it isn't ideal for us here in Ireland, but in Europe there are many countries just like us, including Denmark, Norway and Portugal so we are not alone. Just count yourself lucky that you are buying in the US!

I hope this answers your question.

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