With the plummeting value of Sterling the value of shopping for a second hand car in the UK is increasingly appealing to motorists in the Republic. In recent years, given the relative strength of the Pound and the Euro, it had been the case that only those looking for an expensive premium car could make a big enough saving that would make the trip across the water worthwhile. No longer. The precipitous collapse in the cost of Sterling, as it tumbles down a mineshaft of Brexit worries and angst, has made buying even the cheapest second hand cars in the UK a viable option.
Rise in imports
The number of used imports coming into the Republic from the North and Britain has accelerated rapidly this year. In January, we bought 4,523 cars in the UK and brought them here, but even before the asinine vote for Brexit on the 23rd of June, the numbers were picking up. In May they stood at 5,884, with similar figures in June and July. August spiked above 6,000 and September, as the global financial markets really put the squeeze on Britain's currency, more than 7,000 of us voted with our wallets and hopped on the ferry. The total for the year now stands at 53,908 (figures courtesy of Motorcheck.ie), or about a third of the number of new cars sold in Ireland so far this year.
It was Ashley Winston, of car-finding service Palmdale who first gave The Irish Times a heads up that things were changing. While motorists from the Republic interested in buying a premium car had been beating a steady path to his door, it was when someone looking for a humble Toyota Auris called Winston, adamant that he had done his sums and that there was a saving to be made, that he knew the game was turning. "Cars are now even cheaper than they were over here for buyers from the Republic, because of the currency shift," Winston told The Irish Times. "The limit at which you can make a saving now has fallen to around £5,000 I would say. It's not always the case of course - one buyer looking for a Volvo C30 recently did all the calculations and couldn't make it work, but the guy buying the Auris could. It's really on a model-by-model basis at the moment but we can help talk customers through that."
Michael Rochford of Motorcheck reckons that the rate of imports is accelerating fast and it's already having an effect on the values of used cars here. "Used imports are definitely on the up based on the figures we've seen. Figures for August and Septembert show increases of 74 per cent and 78 per cent respectively against the same months last year" he said.
"Both the Audi A4 and A6 as well as the BMW 3 Series and 5 Series appear in the top ten imported cars list but the top three are the Focus, Golf and Passat, demonstrating that the types of vehicles being imported are not just confined to the premium models and suggests that forecourts are being stocked with imports of these popular models. Used car values are softening as a result."
Irish distributors
For now, the Republic's importers are keeping a wary eye on the scene. BMW Ireland, which is an offshoot of the German car maker's UK operation, made hay the last time there was approximate parity between Sterling and Euro by importing used 5 Series models and re-marketing them here as a 'Sterling Edition.' When asked if that was under consideration again, BMW Ireland's sales director, Michael Nugent, said "no, but we are keeping the situation under close review. Ultimately, our primary concern is pleasing the customer, so we have a setup that allows our dealers to access and import cars from the UK if a customer desires a specific model. Beyond that, there is still a level of kudos in buying a car that was originally sold here, and has a full Irish history, but we'll keep an eye on the process as it moves along."
However, with the dramatic shift in the exchange rate, the Republic’s dealers and importers may well have to go through a painful process of devaluing some of their used stock.
Example of savings
As an example, we looked at buying a Ford Focus (currently the most popularly-imported used car) and a BMW 5 Series and looked at the potential difference in price if one were to eschew the ferry and the airport and simply drive up to Belfast to buy.
For the Focus, we found a 2013 1.6 TDCI hatchback in Titanium spec on sale at a main Ford dealer for €16,750 with 61,000km on the clock. Full history, used warranty, the works. In Belfast, again at a main Ford dealer, we found an identical car, albeit with 80,000km on the clock, for STG£7,995.
At the exchange rate - correct as at 4pm on the 11th of October - that’s €8,850. Using Revenue’s online ready-reckoner for the cost of Vehicle Registration Tax (VRT) we got a nominal figure of €2,711 (although admittedly that’s at best a moving target). That gives a total import price (and allowing an extra €200 for new number plates, the NCT inspection and fuel to get from Dublin to Belfast and back) of €11,761 - a saving of just under €5,000.
The numbers for the BMW 5 Series were equally stark. Taking a 2013 520d M-Sport as the model of choice, we found a car from an independent dealer in the Republic for €34,950 with 146,000km on the clock. Meanwhile, in Belfast with 96,000km on the clock, and again from an independent dealer, we found a 520d M-Sport for STG£16,495. That’s €18,255 at today’s rate, plus an estimated €5,919 into Revenue’s pockets, add €200 for expenses and you get a price of €24,374. Or slightly more than €10,000 of a saving.
While that’s all good news for the North’s dealers, it spells tough times for dealerships on this side of the border.
