Saturday, 20th December 2008
Lack of information stalls sales of second-hand cars
Second-hand car importers are still unable to say how much their cars will cost under the new tax regime because they are still waiting for certain information from the government.
They are urging the government to publish the "residual values" of second-hand imported vehicles, which is the value of a car established by the government for registration purposes.
The Used Vehicles Importers' Association yesterday called on the authorities to publish these values as soon as possible to allow importers to work out the selling price of their cars.
Although the association is expecting a "substantial drop" in the prices of second-hand cars once the new registration tax comes into force, the 28 importers are unable to answer their clients' questions, association president Oliver Brownrigg charged.
"We cannot tell clients the price of cars under the new regime and this is costing us business," he said.
Mr Brownrigg explained that while new-car dealers are taking deposits and registering cars after January 1, importers of used cars are not even able to do that because they cannot give clients prices.
Moreover, since most of their business entails taking a customer's old car in exchange for a newer one, it is even more important to know the residual values in order to be able to value the old cars.
He said this was not the first time that second-hand car importers had encountered hurdles. The association was set up in 2002 when importers were being asked to show certification that cars were in line with European regulations.
Some years later, rumours circulated that the cars were not genuine and the Malta Transport Authority was checking each car's speedometer. Later, importers were asked to ensure that cars' emissions were in line with European regulations.
Mr Brownrigg said the reason for such obstacles was obvious: the government was being forced by their competitors to limit the success of the sector.
Asked yesterday when the residual values are expected to be published, the Finance Ministry did not reply.
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Before 2009 is out our Finance Minister and the ADT will have to go back to the drawing board. I advise that looking at things from the consumer point of view AND the environment would lead to a final solution which will conform with EU regulations. In the EU the consumer is King.
Paragraph A13 of the revised budget document gives the definition of a new motor vehicle which includes; “a motor vehicle which has been temporarily registered in another country and had been supplied less than six months after the date of first entry into service, or has traveled less than 6,000 kilometers”. Can the authorities explain how will they guarantee that a private person importing into Malta a new car (within the context of this definition), that the same registration tax will be imposed as is done on a same new vehicle imported by official car importers since the registration value and registration tax of new car imports are not made public?
The latest addition of the Budget document related to the new tax regime (available on the ADT website) has three new paragraphs; A12 to A14.
A12 claims that this new tax regime conforms to all EU requirements. This claim is unfounded. The European Commission will decide if the new tax regime conforms to all EU requirements and not the Maltese authorities.
Obviously, the lowest of Glass's prices is the most likely value but, given the present UK situation (economics + seasonal sales drought), it is probable that even these will not be obtainable and prices will be "behind book".
Auction house sales represent a truer value of any asset, since the real value is that which someone is willing to pay for it. I prefer autotrader.co.uk where I look for prices on offer, balanced by mileage and condition. Invariably, the lowest priced car will sell and others will have to price-match. In 2007, I sold my V6 3ltr Laguna Initiale for £stg 4450, in vgc with 27k mls. When new 4 yrs before, it cost £stg28k+. What would ADT's valuation have been?
So, where Malta is concerned, is it going to be a question of smiling sweetly at the valuer or will it depend on which side of the bed he got out of that morning? And transperancy?
On the wall of the ADT Inspection offices in Floriana is a notice that has been put by the authorities, and which was published in the Government Gazette.
It states that:
'The Malta Transport Authority wishes to advise the general public that all used Vehicles imported from EU countries will be evaluated for Registration Tax as per the UK Glass's Car Guide Book....'
These valuations can be bought on line from Glass's website for UKP 3.50
It should be noted that it also states;
'The vehicle condition will not be taken into consideration for this evaluation process....'