New registration system unveiled in Budget 2013

Finance Minister, Michael Noonan has introduced a new registration system, that comes into effect on January 1, as predicted by AutoTrade.ie last August.

Back in August AutoTrade.ie broke the news that Finance Minister, Michael Noonan, was set to introduce a new registration system, along the lines of the UK system.

The Minister has now introduced a second vehicle registration period in the year, beginning in 2013, in an effort to generate an additional sales peak in the second half of each year, and to stabilise employment in the motor industry, which it was felt could arise from the effect of that second peak.

As a result, 2013 will see the introduction of a second registration period. The sequence will take the form of a separate 3-digit year identifier for the first and second six month periods in the year, i.e. 131 and 132 respectively, and the number sequence will revert to “1” for the second period.

The VRT reliefs currently in place for electric vehicles (up to €5,000), plug-in hybrid electric vehicles (up to €2,500), and hybrid and flexible fuel vehicles (up to €1,500) are being retained for a further 12 months to end December 2013. It should also be noted that the motor tax on electric cars is being reduced to €120.

VRT system

The Minister has overhauled the VRT bands on new car sales. The Minister has split Band A into four individual categories. Band A1 (0-80g) has a VRT rate of 14%, while A2 (81-100g) will be levied at 15%. A3 (101-110g) will be levied at 16% and A4 (111-120g) will be charged at 17%.

Band B has been split into two categories, B1 (121-130g) will be levied at 18%, while B2 (131-140g) will be charged at 19%.

VRT on Band C has been increased by 3% to 23%, while band D also increases by 3% to 27%. Band E anf F inreases by 2% to 30% and 34% respectively, while Band G remains unchanged at 36%.

Motor Tax

Finance Minister Michael Noonan has increased Motor Tax in Budget 2013, announced in the Dail on Wednesday.

Cars taxed under the new VRT system will see rates increase from €10 (Band A1) to €92 (Band G).

Cars that were regsitered before January 1 2008 will see increases range from €14 for cars less 1,000cc to €126 for cars with an engine over 3,001cc.

The motor industry, has given a mixed reaction to Budget 2013.

“It is a shame that the motor business here in Ireland again appears to be seen as something of a cash cow and that the Government is again seeking to drain more revenue from the beleaguered motorist,” said Volkswagen Group Ireland Managing Director Simon Elliott.

“While any increase in VRT and motor tax might worry consumers we must welcome the news that there will be a second registration plate in 2013 which is something that we in particular in Volkswagen Group Ireland lobbied hard to achieve. We also welcome the decision not to increase duty on petrol or diesel. I am also delighted that in terms of our retail offers that they are stronger than they have ever been which will give some comfort to those new car buyers for the New Year.”

SIMI

The Society of the Irish Motor Industry (SIMI) has expressed its dispappointment at the VRT increases announced in yesterday’s Budget but welcome the new vehicle registration system

Alan Nolan, Director General, SIMI to AutoTrade.ie: “While increases in VRT and Road Tax were strongly signalled, we warned Government that now is not the time and it is certainly not the time to increase both. The motorist is already paying enough tax to be on the road and new car sales are down 10,000 on last year. We have always said that more tax would be generated from increasing the sale of cars rather than increasing taxation. The Budget VRT increases should deliver about €50 million but this amount could be generated from the sale of just 6,000 extra cars and this would also support 800 extra jobs which would save the Government almost €20 million.”

Reacting to the Budget Renault Ireland says it will continue to freeze prices on new vehicles purchased before December 31, 2012.

The new Clio, new Megane and Fluence prices all are frozen until end of the month.