CompleteCar.ie is calling for the addition of an additional lower VRT (Vehicle Registration Tax) rate and the removal of road tax on newer, lower-emission vehicles for a period of two years.
While there have been welcome announcements regarding grants for electric and plug-in hybrid vehicles to encourage the purchase of this new technology, the existing VRT and motor tax band system fails to offer an incentive to buyers of new petrol or diesel cars with emissions of less than 100g/km.
"Car manufacturers are being forced to lower their average emissions at an EU level and in some cases this has lead to newer models with ultra low emissions," says Paddy Comyn of CompleteCar.ie. "Advances in technology, as well as the addition of stop-start technology mean that new petrol and diesel models are coming on stream with emissions as low as 92g/km, but the difficulty is that here in Ireland there is no real incentive for manufacturers to sell these cars - or for customers to buy them. In a lot of cases, the technology that allows these cars to be so frugal isn't cheap and they can end up costing more than models with higher emissions."
The lowest VRT and tax band, Band A, includes cars with emissions of 0-120g/km, and while this is a band that Irish buyers have embraced, there are now significantly more cars available in this band than there were in 2008 when the current emissions legislation came into effect. Newer eco-friendly models, such as the Fiat 500 TwinAir, Audi A3 TDI, MINI Cooper Diesel, Opel Corsa EcoFlex and Volkswagen Golf BlueMotion, now come with emissions of less than 100g/km yet are taxed in the same way as higher emitting versions.
CompleteCar.ie is calling for a new Eco VRT Band of 10%, plus a period of free road tax for two years to be applied to petrol or diesel cars with emissions of less than 100g/km.
"In other countries in Europe*, including the UK, France and Sweden there is an incentive for cars with emissions of less than 100g/km. If we are really serious about being at the forefront of new green technology then we should encourage its purchase. We have already seen how Irish car buyers have embraced cleaner cars, with 77% of new cars sold so far in 2010 being from Band A and B," says Shane O' Donoghue of CompleteCar.ie.
"There will be plenty of incentives for buyers to buy electric vehicles for the next two years, but this is a leap that many drivers won't want to make yet, often for practical reasons."
A new VRT band would also encourage buyers to keep buying standard hybrid cars such as the Toyota Prius, which loses its €2,500 VRT refund at the end of 2010 yet has emissions of just 89g/km.