Second-hand car registrations quadruple
The average lifespan of a car in Malta is 15 years, the highest across the EU.
Monthly registrations of used cars originating from the European Union have almost quadrupled since January, according to figures provided by the Malta Transport Authority.
In January, when the new registration tax regime came into force, 256 second-hand cars were registered with the ADT. Registrations surged to 821 by April, after reaching 456 in February and 750 in March.
Registrations of EU and non-EU new cars peaked at 801 in January, but dipped to 474 in February. In March and April, registrations totalled 702 and 700.
Meanwhile, the Finance Ministry is analysing a report submitted by the Association of Car Importers which proposes the introduction of an eco-incentive or “scrappage” scheme, a ministry spokesman told The Times Business.
In the report, car importers illustrate how a scheme modelled on similar initiatives implemented in 12 EU member states – the latest launched in the UK last Monday with some hiccups – would see Malta’s roads occupied by a cleaner, younger fleet. The average lifespan of a car in Malta is 15 years, the highest across the EU.
The scheme would ostensibly boost new car sales while ridding Malta of polluting cars in view of steep emission reduction targets set by the EU. Local agents say both they and the manufacturers they represent would support the scheme financially.
A ministry spokesman said the authorities were “open to the car importers’ concerns” in the new market conditions which has seen a flood of second-hand bargain imports from the continent, most notably from the UK where a weakened currency has made car purchases more attractive.
The spokesman said the ministry has “worked in tandem” with car importers who had input in decision-making. He pointed out, however, that new car sales had not dropped. Rather, he pointed out, it was brand choice that had been affected.
According to data released by the National Office of Statistics last month, there was a 26 per cent increase of new cars on the road in the first quarter of this year compared to January to March 2008. Used vehicles on the road increased by 46 per cent from 1,028 in the first quarter last year to 1,864 this year. In three months, 4,264 vehicles were registered compared to 3,276 between January and March last year, an average rise of 300 cars a month.
The influx of second-hand car imports has also distorted the local used car market, significantly fuelling depreciation.
Asked how it was calculating the depreciation on cars when policies were up for renewal, a leading insurance company told The Times Business that clients were advised to insure cars at the current market value and it was up to clients to inform the insurer of their estimate of value.
“We do however assist clients by letting them know the estimated market value shown in the Malta Insurance Association’s Vehicle Values Guide, which is also available on the association’s website,” the company said.
“We also inform our clients that they can provide us with an annual professional valuation of their car if they require the value to be on an ‘agreed value’ basis.”
Although it was too early to gauge the full impact on motor insurance business, the insurance company said there were indications that the reduced value of cars was “having a negative impact on our premium levels”.
Premiums for bargain second-hand luxury imports also posed problems as repair costs have remained the same. The company said it was “monitoring the impact with a view to seeking a solution which can be implemented in the medium to long term.”
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Oliver Attard
May 24th 2009, 01:04
The average lifespan of a car in Malta is 15 years, the highest across the EU, and when we scrap our cars they have half the milage they have across the EU.
Chris Grillo
May 23rd 2009, 12:47
Max Bartolo's words are nothing more than an advert! Toodling over to his site listing, it is clear to see why people buy abroad!!! Blow me!!!! '94 Corsa 3000Euro(!!!!!!) A 1996 Peugot for 3500 Euros? Int bis-serjeta? Jew biex tidhaq bina? Fiesta ta zmien il brodu elfejn euro?
ESSEX Ford CENTER (Southend, UK) , f'Jannar bdew jaghtu B'XEJN, karozzi tal-kumpannija li ma ghaddewx mil-M.O.T. ingliza, FERM iktar harxa minn taghna!
Nirrepeti...Escorts u Fiestas Mark 5 u 6...B'XEJN!!! Basta tiffirma li responsabbli int , u tehodhom b'Tow Truck....dawn it-taxxi huma illegali u unfair.
Ghaliex bniedem ghandu jixtri flokk tal-football jew computer u ma jhallsx taxxi, u jien irrid karozza u nhallas? Stupidagni.
Il-karozzi f'Malta jibqghu balla! Mhux ta b'xejn jaghmlu 18 il sena....
W Spencer
May 23rd 2009, 10:09
@ P Ciantar..........before coming to Malta / Gozo, I was advised by many locals, DO NOT buy a motor cycle / scooter as you will risk getting killed / injuring yourself !
Why ? Well firstly you will have to zig zag on the roads to avoid the craters (the word potholes is not a true description of the holes in the road), if you hit one you are in serious trouble, and secondly as you are zig zagging you are not looking at other traffic which could / does result in collisions.
Solution ? repair the roads PROPERLY, not just bodge them !!! Not enough money to carry out the works .....don't make me laugh.
PJ Mifsud
May 23rd 2009, 07:37
The government reversed the VAT it previously charged onto the Car Registration Tax (CRT). The practice was illegal according to EU regulations because it couldn't levy VAT on the CRT. The price of new cars did decrease, but only to the tune of LM 500 on cars that were previously being sold at LM 6,600.
The high CRTmakes Malta one of the EU countries where cars are the most expensive. Before the introduction of the new tax regime, the government used to earn some LM 50 million from CRT. Somehow or other, it had to recoup the income and decided that the best way was to raise car licences. These were to be linked to levels of carbon emissions, size of car engine and body and its age according to the year of manufacture.
Local new car agents should lower their enormous profit margins now that they're feeling the pinch. If the government wants to toe the "scrappage" line that only favours new car agents, it should lower CRT to ensure that old models are scrapped. However the free market system in second-hand and new car imports should continue to operate.
S. Camilleri
May 22nd 2009, 15:35
@Carl Engerer
Sorry...but are you living in Cuckoo Land?? What did the Government reverse? Government did what it knows best ... taking us for a ride. How is Malta the cheapest place to own a car? Do you watch TV??
Kevin Cassar
May 22nd 2009, 14:52
Any measure that hides behind the "save the environment" mask is actually a measure to increase revenue or protect the local money makers. If the government really cared about the environment he would place better incentives on greener products and assist more people in making the change that is required by all. Newer cars don't necessarily mean cleaner cars as it all depends on engine efficiency. If we really want to go a bigger step further we need to look at newer technology like electric cars. Have a look at the new Tesla Model S for example. This is a totally electric powered family car that performs like a sports car but does not emit anything. The price is about $50,000, which is still a bit expensive for most but it's getting closer and would be even more affordable if government would subsidize it. Some people would think the price is way over the conventional cars but you have to consider that a $25,000 car would actually cost about $35,000 when you add the cost of fuel and service for a 5 year timeframe to it.
PAUL PORTELLI
May 22nd 2009, 14:00
MELA ARA HA JFAQALNA TAXXA OHRA GONZI ISSOLTU TIEGHU.......
beppe pisani
May 22nd 2009, 13:15
@ Mr Bartolo
Very good and practical URL . At least ALL the prices are listed!
Carl Engerer
May 22nd 2009, 13:03
I have to say that I am really happy that the government has totally reversed its very greedy car tax regime that was illegally collected and against European law. Now Malta is one of the cheapest places to own a car in Europe and every consumer in this country has the chance of affording a fuel efficient, clean and comfortable car.
Max Bartolo
May 22nd 2009, 12:28
Regarding Beppe Pisani's comment.
This seems to be the reasoning behind the decision of quite a few to import their personal vehicle from the UK. However, one must try to take as much as possible into consideration. Obvious expenses such as transport, lodging, food, insurance in the UK when going for the car must be accounted for and, if you choose to import the car without going to see it, you are always risking that bit more. Transportation costs to Malta and registration tax also increase the cost significantly. By buying a new car in Malta, you also gain a few extra perks such as guarantee, you get to choose your extras, colour, etc and when it eventually comes to selling the car, it would have a higher value due to it having 1 owner and not being as old.
In the long run, it might actually be worth purchasing a new vehicle from Malta. I'm not saying that this is always the case but one should try consider everything before rushing into any hasty decisions.
Or you could always buy a quality second hand car from Malta..
Max Bartolo
http://www.maltacarmarket.com
beppe pisani
May 22nd 2009, 07:30
What the new car importers can do to sell more cars is a simple commercial exercise.................reduce their high profit margin!
With the prices UK very good second hand cars are selling, one has to be insane to but a new car from the local agents.
An example is a 2006 VW Golf TDi from the Uk would be 50% cheaper than bought locally!
Godwin Saliba
May 21st 2009, 21:36
In Malta there is a huge problem with air pollution and traffic: and the main problem is not that the cars on the roads are old and inefficient, but the main problem is that there are too many cars on the road. Instead of offering incentives to scrap old cars and buy new ones, the government should do its best to improve the public transport system so that less people would have the need to buy a car.
We need less cars on the road and more bicycles, bikes, scooters and buses. These can be the solution to save the environment, and not 'fuel-efficient' cars.
Robert Caruana
May 21st 2009, 16:47
The environment is being used left right and centre to justify decisions that are purely economic. As long as a car is well maintained and has a small capacity engine suited to the mass and aerodynamics of the vehicle, an old car can be pretty efficient. Holding on to such a car, particularly if the annual milage is modest is much more environmentally friendly than changing cars every so often.
The manufacture and transport of new vehicles consumes energy and gives off greenhouse gases. The manufacture of new cars means more finite resources being used up. The scrapping of old cars, their dismantling and the export of recyclable parts also consumes energy. Holding on to an older well maintained, small-engined vehicle is probably more environmentally friendly than going through 3 or 4 vehicle changes in the same period of time for a small reduction in gCO2 /km. Holding on to a good but older car is also beneficial for our pockets. Nice to see that new motor car agents have suddenly become so concerned about our environment!
r ferriggi
May 21st 2009, 14:03
limportaturi u lagenti issa qedin jibku.
mela il poplu x'ghamel f'dawn is snin kollha li ilu jinstellah min dawn l'imsemmija??
issa,,, forsi il gvern se jikkollabora maghhom biex ma jhallix lil poplu jiehu ftit nifs??
ma ngibux skuzi bl'ambjent please. issa iddejjaqna bl'iskuzi foqra.
George Poitier
May 21st 2009, 13:56
Yes, so many friends own 15 year old cars. I brought mine from the UK years back, brand new it was half the price of a car here in Malta and I felt sorry for many Maltese. Now it seems there is a payback system, and people in Malta can afford to buy GOOD, used almost new and incredibly cheaper vehicles from Europe. My wife needed a car 2 years ago and after making friends with a local authorised dealer managed to get a Fiesta for Lm5950. After looking at new cars abroad, we had no choice, it really cut me up inside because I felt we had betrayed a friend, but there was a Lm2000 diference in the price. I fully agree with a cash back system on old cars, if it works and there is no reason why it should not, many people would be delighted. But then again, the refund must be fair. Fair and healthy competition never hurt anyone, especially the consumer.
S. Camilleri
May 21st 2009, 13:53
So instead of being the dumping ground for Japan, we are now the dumping ground for Europe...... Not that I blame the people importing these cars; I would if I hd not changed mine already!!
To blame are the obscene registration taxes and the illogical way they penalise new cars and even hybrids in favour of old gas gusslers!!
Joe Galea
May 21st 2009, 13:47
Good on you Mr Caruana, as a Maltese Australian returned migrant i fully agree
Well said mate and its all fairdinkum.
Joe Galea
Joe Borg Camilleri
May 21st 2009, 13:35
Have you ever heard about environmental economics?????? Pls find wikipedea's link for ease of reference....
http://en.wikipedia.org/wiki/Environmental_economics
D Delia
May 21st 2009, 13:06
As someone said before, environment and economy do not mix will.
The scrappage scheme introduced in the UK and Germany has an underlying direct effect on employment and their economies for the simple reason that these countries produce lots of cars. Malta does not produce cars at all and such a scheme will only benefit a handful of importers.
The Association of Car Importers should have pointed out instead that the new tax regime is somehow favoring second hand imports and not new imports as intended.
Andrew Sammut
May 21st 2009, 11:43
B Zammit....cars last longer because of our shorter distances....you must be joking really! Compare the average 2 year old car on the continent with your average 2 year old car in Malta with the same mileage....In Malta after two years a car looks like it's been to the wars and back, whilst it's European counterpart would be practically new.
Dense traffic (more frequent gear changes, unpredictable road users (slamming on brakes), salty air and high concentrations of particulate matter all contribute to ageing a car much quicker in Malta than most other places in Europe....and I haven't even started on the potholes, sleeping policemen, flooded roads, lax VRT tests etc. etc. So no, by any standards, your average 15 year old car in Malta can not, by any stretch of the imagination be compared to the same car with the same mileage anywhere else in Europe.
If on the other hand you were to argue that it's not worth changing your 15 year old car because cars age too quickly in Malta, then yes I'd agree with you....
P.Ciantar
May 21st 2009, 11:41
Any motorbike incentive, from the Ministry of Finance?? It is so easy too include more small motorbikes on our roads and hence less traffic and less pollution. But I am sorry to say that this Govt. just ignore such comments or suggestions cause CAR DEALERS new and second hand won't VOTE. Wake up Govt. please and act as you should. WE ARE VERYCROWDED WITHCARS. Put down the motorbike licences and initiate an incentive to use bikes on such a small island. Unbelievable how you still here people coming for work to the City or Floriana from St.Venera, Hamrun etc... COME ON !!!
Freddie Caruana (ex-pat)
May 21st 2009, 11:32
Now that the ADT are cashing it in why not return ALL the VAT paid in the previous illegal registration tax without all the hasstle of the international law courts? Any Replies anyone?
Victor Testa
May 21st 2009, 11:18
@all the car importers;
Mela inqrastu fl-ahhar?? wara li ilkom toqorsu lil Maltin kollha!!! Bummers! Issa ngibu l-iskuza bl-ambjent ux hekk?? Allijista jkun ta, andkomx xi plot mibni f'nofs l-eghlieqi uxx?? jew nkella xi bini mostruz milli ghandna mal-Kosta ta Malta li irrovina l-arja li tidhol min fuq il-bahar, specjalment f'tas-Sliema!
Anthony Neil Pace
May 21st 2009, 11:00
If the Government creates a scrappage scheme, here are the positive outcomes I can see:
Cars which are harmful to the environment and expensive to run can be replaced, because of a refreshed incentive by car owners for newer cars.
The average car age in Malta should go down, and this will encourage first time drivers to scrap their secondhand cars which are in a state of disrepair to be replaced.
But, I for one agree with everybody who says that some of the old cars which are in good condition should'nt be scrapped. because Exceptional cars from the 70s sand 80s are more common here than in other countries.
examples of which are: VW Golf GTI Mk1, VW Beetle 1969 models and Audi 800s from the 1970s.
I have been abroad, and most of the cars I've seen in Europe are less than five years old.
B Fenech
May 21st 2009, 10:54
Let not start making mountains out of mole hills. The scheme proposed is an suggested incentive, which normally means that it will be on a voluntary basis and no-one will be forced to scrap if old banger. What is wrong for the new car importers to try and stimulate the market towards the new cars and protect the livelihood of 800 people working in this industry? Some of these businesses have been giving a service to the motor industry and the Maltese economy for over 80 years.
Joe Borg Camilleri
May 21st 2009, 10:52
One reason why cars should be replaced is because we all consider that polluting the environment without incurring any costs is almost a 'human right'. As time flies by, newer more efficient technology (vide article hereunder) is brought on to the market and older much more pollutant cars become outdated. Besides, this 'depreciation' has also a domino effect of other countries' policies and therefore they get rid of their unwanted cars by selling them abroad to countries like Malta. Well, one can argue that Malta's option is to embrace their policy.
http://www.euractiv.com/en/transport/euro-5-emissions-standards-cars/article-133325
"The EU has adopted strict new caps on pollutant emissions from diesel and petrol cars, limiting in particular nitrogen oxides (NOx) and particulate matter (PM) which pose the most serious health and environmental problems.
Fuel exhausts have an impact on air quality and human health, especially in urban areas where traffic is dense. To reduce this impact, the EU has adopted legislation to impose stricter emissions caps on both diesel and petrol cars, limiting in particular nitrogen oxides (NOx) and particulate matter (PM) which pose the most serious health problems. The next generation of standards (known as Euro 5) will enter into force in 2009."
jcmicallef
May 21st 2009, 10:51
1st - apologies for the spelling mistakes and typos in my earlier contribution :-)
2nd - wanted to highlight and agree with the valid point raised by B Zammit. It is amazing how we always twist things to accomodate our arguments. Dealerships always raise the excuse that Malta is different from other european countries (to justify prices, poor choice of models, expensive mods and accesories, etc) now, suddenly, we are comparing our cars' lifespan with european countries. If our cars travel a FRACTION of the distance, why should they not last longer? Elementary, I guess...or maybe not...
I think we should be proud that we manage this fact. The Maltese are supposed to be thrifty. Given our country's balance of payments, more frequent car replacements won't be such a great an idea after all.
@ r buttigieg - older cars may not necessarily be in such a poor condition. But, as I always say, there should be the VRT to take care of that. I see plenty recent cars that smoke a lot or been through so many bashes that they are no longer roadworthy. Somehow, they manage to get their VRT pass.
Agreed on road quality issues.
a.camilleri
May 21st 2009, 10:27
i have a bmw that i brought with me when i returned to malta from the uk, i look after it, have it servised and all that, why should i scrap it when iits 15yrs old specially if i like the car?
Nigel Lawrence
May 21st 2009, 10:04
which proposes the introduction of an eco-incentive or “scrappage” scheme,---
Another "industry" looking for a gov't subsidy to satisfy their own profits.
Point. The scrappage schemes have been put in place by other EU countries to support their ailing car manufacturers, so this does not apply to Malta.
The scheme would ostensibly boost new car sales----so this is to please the new car importers who cannot face a bit of competition.
The influx of second-hand car imports has also distorted the local used car market, significantly fuelling depreciation.--------Welcome to the free market. The consumer rules.
C. Sapiano
May 21st 2009, 09:56
There is the positive side of this news. Many cars coming from the UK are luxurious cars and expensive suv's, even if second-hand. This means that the recession didn't really hit Malta that bad.
B Zammit
May 21st 2009, 09:53
Cars last longer also because of our short distances.
In Malta, a trip from Valletta to Mellieha is 'long distance'.
On the Continent such a trip is 'just round the corner'
Cars would last even longer if our roads were better ...but we are getting there .. slowly.
The registration rules have made ownership more affordable. Thumbs up!
jcmicallef
May 21st 2009, 09:50
@Bertie O'Cassey - ghandek ragun biex tbigh! Agreed. Perhaps ppl should learn how to manage their finances first.
Scrappage or no scrappage, I find it difficult to understand how the frequent replacement of a commodity could ever help the environment. My Clio will be 7 years old this year, It was and still is a very low emission vehicle (whows form the comprehensive VRT carried out) - so why should I be forced to scrap it and replace it?
Are we really trying to restore the environment or the economy? These 2 things don't mix very well.
Waht we need in malta is not a younger, cleaner fleet, but a SMALLER fleet!
When I lived in a busy road, the air was hardly breathable on weekends ad feasts, let alone on workdays. Tests of the air showed very high levels of pollution. younger cleaners cars would only marginally solve this.
Why can't we have a flippin' decent public trnasport service? I travel abroad 3-4 times a year and have no problem using buses and trams. The local new ones are gas-guzzlers and the to say that the (dis)service is lacklustre is an understatement.
Need to find ways to reduce congestion!
Peter Aquilina
May 21st 2009, 09:42
An expected result since the weakening of the British Pound against the Euro.
Brand new car first registrations would have somehow improved , but, only if their importers were to have sensibly revised and lowered their exorbitant prices !
r buttigieg
May 21st 2009, 09:37
The lifespan is 15 years because people use their car until it is fully worn out as they cant afford to purchase a new one. One could still see cars that are 20 or 30 years on the road...with an engine that is on the verge of exploding. Yet even though the new registration tax has been implemented, the government did dot calculate this well. One can see that it is more expensive to register a car that has been on the roads since 2004 than a car that has been on the roads since 2000. Also, there was no consideration taken for newer cars with bigger engines. Some of these consume less fuel than medium sized engines that have been on the roads for 5 to 6 years, due to technological progress. I hope that the 15 years will not be used as an excuse not to fix our roads. Since the high maintenance fees one has to pay to fix a car after having it on the roads for an average of 3 years, result to be quite high.
Joe Borg Camilleri
May 21st 2009, 09:37
The scrappage scheme in favour of the environment has been suggested by the undersigned way back in March. http://archive.timesofmalta.com/articles/view/20090310/letters/germany-in-the-driving-seat-on-economy
This is feasible as it is no groundbreaking innovation and have proved successful in the countries which adopted such a scheme. Well done for taking such proposal into consideration !!
Bertie O'Cassey
May 21st 2009, 09:25
U le ma hawnx flus fil pajjiz, kullhadd immutt bil guh minhabba il kontijiet tad-dawl u l-ilma....... Alla jbierek kull min igorr kollha jonfqu....