Matthew Xuereb
Second-hand car market takes over
New car tax yields less revenue
Second-hand cars have become much cheaper to register compared with brand new cars, so most major car importers now sell second-hand cars themselves.
Nearly two-thirds of cars registered last year were second-hand, which has now become by far the most popular choice of car for Maltese motorists, The Sunday Times has learnt.
However, the change in vehicle-buying habits are causing new car dealerships to consider shedding staff as they complain about the disparity created by the cheaper registration tax on second-hand cars.
Figures seen by this newspaper show that only 5,522 new cars were registered last year, just over 35 per cent of the total cars registered.
Second-hand cars accounted for nearly 10,500 of the 16,000 vehicles imported.
Association of Car Importers Malta (ACIM) secretary William Shaw confirmed that the association had written to Prime Minister Lawrence Gonzi and Finance Minister Tonio Fenech expressing “deep concern” over the figures which, he said, confirmed what car importers had experienced in 2009 and 2010.
Statistics show that car sales plummeted to an average of 300 a month from an average of 650 to 700 a month in 2008, before the new registration tax regime kicked in for second-hand cars.
Figures show that the 65-35 new-old ratio in 2008 switched to a 35-65 ratio in favour of second-hand cars in 2009 and 2010.
Mr Shaw said car importers wanted the government to create a level playing field after the introduction of the revamped car registration tax in January 2009.
As a result of this new regime, second-hand cars imported from both within and outside the EU became much cheaper to register compared with brand new cars.
The problem with the new regime, he said, was that it was based on the UK model, the difference being that the British model levies VAT but no registration tax.
The changes to the registration tax regime came about as a result of pressure, including from the EU, that Malta was charging consumers VAT twice – 18 per cent of the vehicle purchase price, including registration tax, on which they would have already paid VAT.
Even though most of the major importers now sell second-hand imported cars themselves, Mr Shaw said it was a pity that many Maltese preferred buying used cars from abroad as opposed to brand new cars.
“For some it’s a question of budget, but many Maltese are under the impression that buying second-hand cars is a bargain. It’s a pity because you don’t really know what you’re buying when you buy from abroad,” Mr Shaw said.
He also said that under the current tax regime on second-hand cars, the government was collecting far less revenue from registration tax.
Furthermore, certain extras, such as electric adjustable seats and steering wheels, electric sunroofs and TFT screens installed in the headrests were already installed in the second-hand cars, but would be subject to VAT if added in Malta.
He also lamented that many individuals were making profit by driving cars from the UK without registering themselves as businessmen and without paying any form of tax on the profit they were making.
Asked whether car importers were considering downsizing their staff if the situation remained unchanged, Mr Shaw said: “Importers employ 700 people, so it’s 700 families we are talking about.
“There is not much that importers can do about the situation, and then it boils down to a business concern.
“Overheads increase, and something’s got to give.”
The registration figures for last year show that the largest number of new cars was purchased in December, when 538 cars were registered. This is probably due to the scrappage scheme introduced by the government in November, which is partly financed by the car importers.
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Mario Bonnici
Feb 8th 2011, 16:53
Taf xinsejtu hbieb. Insejtu li dawn it talin izoqqu wiehed jew tnejn mill partiti. Something will happen to force us to buy new cars. Mark my words. As of we are going to let the ACIM members become poor. Jiena u int iva dawn le!!
J Vella
Feb 8th 2011, 12:13
I think cars in Malta are relatively cheap, especially new ones. It really frustrates me to read such inconsiderate comments on here about the small, fair and sensible amount of tax citizens have to pay when purchasing their car, how else is the government supposed to pay for a lavish piano designed parliament house and government employees sleeping at their desks?
W Spencer
Feb 8th 2011, 17:36
Cars in Malta relatively cheap ?? I commend your sense of humour !!
K. Rizzo
Feb 8th 2011, 01:35
>>> A discrimination which is being done against the Maltese citizen who has a lower average wage when compared to the European citizen but then has to buy his new car at approx 40% more than the European citizen because his Government is not smart enough to get income from elsewhere. And when I say Government I don't refer to political parties but to any Government there has been since we've become autonomous. The current one has just made matters worse by lowering by tax on new cars by X in 2009 but then lowering it by10X on 2nd hand imports!...instead of abolishing it completely to give us the opportunity equal to other EU countries...and our Government itself who buys its 'company cars' Reg-tax-free! SHAME SHAME SHAME!!!!
K. Rizzo
Feb 8th 2011, 01:24
Unless the Government removes the DISGUSTINGLY DISCRIMINATIVE REGISTRATION TAX on both new cars and second hand imports Malta will remain a 2nd hand country when it comes to cars. I work with a new car importer and know the internal sums. Profits are FAR from what you think they are! I can shout it out loud in everyone's face that YOU ARE BEING RIPPED OFF AND DISCRIMINATED AGAINST BY THE MALTESE GOVERNMENT EACH TIME YOU BOUGHT A CAR BE IT NEW OR OLD! The only difference is that now the tax rates on second hand are by far lower than those on new therefore the playing field between new and second hand is not level at all. A car which in Italy starts 20,300, in Malta starts 24,500 and that's with help from the mother company to offset some of the reg tax daylight robbery that occurs here! I can't vouch for all importers cause I don't know their back office but what I can say for sure is that even with fair/poor profits a new car cannot compete fairly with a used one due to SEVERE REG TAX DISCRIMINATION!>>>
Paul A. Camilleri
Feb 7th 2011, 13:55
It was only yesterday that I saw the New Polo GTI being advertised on an Italian station for the price of EUROS10,500. This same model from the local agents would cost a BOMB.
J Galea
Feb 7th 2011, 06:59
There is one simple solution to all of this and that is to lower the registration tax on new cars. Forget scrappage schemes that are only helping overseas producers of vehicles. What is needed is something to help the Maltese consumer so that s/he can buy a new car and help the environment at the same time. If the government wants to create a sustainable environmentally-friendly regime it should consider differential registration taxes for persons owning more than 2 cars for non-business related use.
Chris Grillo
Feb 7th 2011, 05:02
"Association of Car Importers Malta (ACIM) secretary William Shaw confirmed ... bla bla ... expressing “deep concern” over the figures which, ... more bla bla... Is Mr.Shaw not too deeply concerned that a Skoda Fabia in Malta is nearly 13,000 Euros, 5k more than in Italy? I purchased two IMMACULATE Daihatsu Boon (Sirion) for the price of one Skoda! TWO OF THEM! And the only thing missing from thecars is the proverbial kitchen sink. I don't give a ding-dong on whose fault it is (although I never saw a poor car dealer), but the end result matters to me. For too long you have had it good. If I can buy a computer from abroad, I can certainly do the same with a car. Isn't it merchandise after all? Fair competition mate, fair competition!
NAttard
Feb 6th 2011, 22:09
@Ganni Ellul, yeah right! Please provide us with a link to the site let's see the condition of the car in question. What's too good to be true, most of the time isn't.
T Said
Feb 6th 2011, 21:05
Mr Shaw taf kemm ilkhom tehilbu nies ! u sa naf jien hafna mil-importaturi jimpurtaw wkoll second hand cars, jista xi hadd mid dwana jidilna kemm l-importaturi Maltin esportaw korrozzi f' dawn l-ahhar 25 sena , taf kemm il-vapur korrozi gie hawn malta u jerga jitlaq sahansitra anke lejn l-ingilterra ..u jaqilbuwa lil agent ta dak il-pajjiz...fidili dawn....iccekjaw.... naf x qed nghid....u dawn jilabuwa ta l-imsiken!
Mario Agius
Feb 7th 2011, 12:35
Jien xtrajt karrozza mill-ingilterra u hsibt li iffrankajt hafna flus izda wara x-xitwa li ghaddiet bdew hergin il-problemi. il-mechanic qalli li jixba jara karrozzi ta l-ingilterra li tant ikunu qalaw silg li meta jigu hawn jibdew bit-trouble. Nixtieq nista nbiddila u nixtri l-gdid.
Ganni Ellul
Feb 6th 2011, 20:44
“For some it’s a question of budget, but many Maltese are under the impression that buying second-hand cars is a bargain. It’s a pity because you don’t really know what you’re buying when you buy from abroad,” Mr Shaw said.
Mr Shaw thats why people go to buy the cars themselves, to check them out .The hustle to go to get a car pays off because one can spend them same money he would have spent on a car in Malta but upgrade to a model which he would never be able to afford in Malta.I know someone who got a Rav4 2008 model for 10,000 euros including shipping and registration, how is that for a bargain?
A Attard
Feb 6th 2011, 14:50
The cost of registration should be based on the amount of pollution the car creates, not on the age of the car!!!
Gaetano Attard
Feb 8th 2011, 12:10
I stil think that is not fair. Imagine if you drive a eco-friendly car that has a co2 of about 120g about 10,000 Km a year and I drive a car with a much higher co2 of about 250g for only 2,000 Km a year ! Who is poluting the most, Me or You ! ?
J. Pace
Feb 6th 2011, 14:38
These are facts ACIM. Dealers sell cars at a much higher prices than I would typically buy it from somewhere else - even new from other countries and bring it to malta - registered. By new I mean - new from showrooms and also directly from the manufacturer's showroom - Germany for example.
Now, why your prices are higher? Reasons maybe...
1) You are buying the cars at a much higher price than we can buy it from abroad...
2) You shipping costs are quite high...
3) Huge Profit Margins
Option 1 and 2 definetly are not the case, since you buy cars at wholesale prices and ship cars in bulk.
So the only option that remains is - 3...
Reduce you profits else you leave us no option but to keep buying cars from abroad.
JOhn Azzopardi
Feb 6th 2011, 18:08
You forgot one thing. TAxes. There is an almost 100% tax on new cars. So it's really the government who controls the price of cars sold in Malta.
E.Portelli
Feb 6th 2011, 14:38
Qabel ma titnehha ghal kollox ir- REG. TAX.....hadd mil popolin m'hu sa jiehu ruh.
Bejn VAT u Registration Tax ahna il Maltin Inhallsu cirka 40% aktar min Sqalli
Karozza illi tinxtara min Ragusa ghac cifra ta 15,737 Ewro ahna inhallsu ghalija 21,990Ewro
Jigifieri 6,253 ewro izjed....!!!!!!!!!!!! NO more NO less.................Amen!
Steve Sant
Feb 6th 2011, 14:31
Mr.Shaw, the GREED of the local agents are mainly to blame. For many years they have become millionaires on the back of those who wish to buy a car. I remember when you had to pay someone to have your car reserved. Then you paid through your nose that something extra to get it before 6 months. Later you paid a bit more, to get "all the extra's" the car actually comes with. Of late, many cars were imported with slight defects and arranged in Malta. And now just because people have been given a choice, to go elsewhere, they took that choice. I bought a second hand car from the UK. Yes I would have preferred a new one, but to pay 40% more. No way, sorry I am not in the charity to these greedy people.
John Azzopardi
Feb 6th 2011, 14:11
Why is everyone surprised . I live in both Malta and the US and the price for a new car is almost double of what one will pay in the US. And I am talking about a basis car with nothing fancy. What I see also is that a second hand car in Malta cost as much as a new car in the US. I think what we have in Malta is very high taxes and the government collects a large amount of revenue from car purchases.
Deo Catania
Feb 6th 2011, 13:35
How can anuone compare a UK second hand import with a local brand new car? totally no comparison at all. besides one can find good prices for brand new cars, normal family hatchbacks are only slightly cheaper if imported from the UK, for the little money saved I would opt for a breand new car. But we maltese never learn, if someone buys a BMW then all of us go buy one too.
M.Galea
Feb 6th 2011, 22:46
You missed the point. in malta you will get a brand new Hyundai i20 and from the UK (second hand) you would get a BMW for the exact same price.
got it? :)
R.E.Saliba
Feb 7th 2011, 16:24
A friend of mine bought a normal family hatchback from the UK for only 70% of the price it would fetch locally. It was a year old with very little mileage. He saved over Eur3000 which means that there really is no comparison at all. It is far more worthwhile buying cars from abroad and will continue to be so until your friends the car importers decide to stop ripping us off.
Manuel Micallef
Feb 6th 2011, 13:06
There is only one dominant purpose which the vast majority of Maltese look ut for when buying a car = budget.
The figures up here show that most Maltese can no longer afford to buy new cars!
G Bartolo
Feb 6th 2011, 21:37
No no ... it is not that they can no longer afford to buy new cars Mr Micallef..... it is that they now have an alternative, a good one, and so obviously they go for it. It is called opportunity, created out of competition, something which this government has always believed in. Rest assured that if this alternative wasn't here, people would still be buying the new cars, like it always happened.
Jack Grech
Feb 6th 2011, 13:04
My experance of a used car from UK is positive. Of coures ,one have to do some home work first before you buy but once done I am sure you get the car, perhaps, of your dreams as well. What was unthinkable to aquire know it's a reality infront of your door spet to enjoy with your family. Would that have been a thought in the minds of the local car agents?
Steve Muscat Azzopardi
Feb 6th 2011, 13:01
The saddest part is that even the 2nd hand import tax is a rip off. Between all other UE countries there is no tax payable. For example a used car bought in the UK and registered in Luxembourg would cost the usual admin fee for a VRT, number plates etc. - less than 200 EUR on any size of car.
We need to protest more, we take so much sub-standard government as acceptable.
Peter Bonnici
Feb 6th 2011, 12:40
The playing field is level as it is. Nobody is stopping ACIM members from importing and distributing used vehicles. Many motorists would much rather buy a pre-owned vehicle from an authorised dealership, than from some dodgy used car salesman.
C. Weitze
Feb 6th 2011, 12:36
Even I am considering to buy my next car from a second hand dealer.
The last time I bought a new car, I was quite upset that I had to fork out 5,000 Euros more than I would have paid in other EU countries. And I am talking about a normal family car.
Not only melts the value of a new car like an ice cube in the sun, as stated before, but people who damage your car, couldn't be bothered less and just drive off. 98% of the dents and scratches I have on my car have been caused that way.
Add on those, who out of fun / out of spite / out of jealousy just scratch your car with a sharp instrument. Only last week a relative of mine saw a driver, who held a sharp key out of his window and scratched a brand new BMW all the way from back to front in a split of a second.
With this general attitude plus the bad states of the roads plus the exorbitant prices for new cars, it is no wonder at all that the second-hand market in Malta is booming.
C.Spiteri
Feb 6th 2011, 12:03
My Heart really gos out for these importers! They have had it so good for the past 50 year or so, have become richon our backs and now they are crying because we have a choice and they have to adjust to the realities of the EU?
Anybody to volunteer to go ut to Valletta Gate with a tin in his hands and a performing monkey?
D Schembri
Feb 6th 2011, 12:03
hehhe ... mhux bilfors l-agenti tal-karozzi godda marru l-bahar ...... fl-ahhar. Ma xebghux jehilbu l-poplu kollu meta ma kellux ghazla itjeb milli jixtri karozza gdida? Issa oqoghdu hemm mela ..... u gawdu l-profitti enormi li ghamiltu fis-snin tal-passat, meta bniedem Malti kien ikun imgieghel ihallas l-eluf ta' liri zejda ghal karozza gdida, li barra minn Malta l-istess karozza kienet tiswa hafna u hafna inqas.
P. Borg
Feb 7th 2011, 07:13
Prosit siehbi, ma stajtx thalli messagg ahjar. Kif jghid il-malti - il-gara gejja u sejra sa fl-ahhar tinqasam. U hekk gralhom dawn. L-ewwel abbuzaw mill-maltin bl-addocc u issa qed iduqu ftit mill-medicina taghhom stess. Jien ghadni kemm xtrajt karozza gdida minn barra u meta giet Malta fit-triq xorta giet tiswa 2000 euro inqas minn dik li kien qed jirriklama l-agent hawn Malta. Bid-differenza ukoll li tieghi full extras u dik riklamata just basic. Ghaxar snin ilu xtrajt karozza gdida minn Malta u kif ghadda iz-zmien u ghamilt ir-ricerki fuqha indunajt kemm sar tbabis fiha melli dahlet Malta. Biss biss kienu iccargjawni Lm75 zejda ghal stereo biex meta hadtha ghand xi hadd professjonali qalli li kien imbarazz u jiswa xi Lm10. U dan huwa biss ezempju wiehed. Il-hazin ghax dawn l-agenti tal-karozzi godda jibqghu miftuhin ghax kieku malajr isiru jafu xinhi il-vera tbatija ta min mghandux geddumu fix-xghir.
j buttigieg
Feb 6th 2011, 11:54
Because like i said many times you cannot buy a car marked x when on tv our near eu country is marked y very very less ,
Marie Zammit
Feb 7th 2011, 12:56
What about the registration tax Mr Buttigieg? Should the government want to prevent more 2nd hand cars from invading our roads it can ease the registration tax. A friend of mine works with a local importer and she tells me that many workers are afraid they will be losing their job pretty soon. Is this what we want?
Anthony Bugeja
Feb 6th 2011, 11:38
Why may I ask it is much cheaper to buy a NEW car from the UK, ship it, insure it, import it to Malta and register it as new. If anything should be cheaper from new car dealers as they import a large quantity so cutting down on all the expenses mentioned before. Only answer is that the new car dealers are used to making huge profits as they never had any real competition.
Alfred Farrugia
Feb 6th 2011, 11:25
I have no doubt in my mind that people would prefer to buy a brand new car instead of a used car, if the prices were the same. It all boils down to competition and the cost of the cars themselves. Importers of new cars need to find a way of lowering their prices. The economies of scale might not work in their favour. I had thought that one of the benefits of joining the EU was going to be the possibility of purchasing a car at a price more or less as the comparable ones in the EU. Why have the former customs duties been converted to registration taxes?
There was a time when the prices of new cars were listed on the Government Gazzette. Some importers of new cars appear to have had it so good for a long time, during different periods of time. It is very easy to get to know what you are buying when one purchases a used car abroad. He or she simply gets the car checked by the relevant certification authority. When I purchased my Lotus XI several years ago I had it checked by an RAC engineer.
Peter Aquilina
Feb 6th 2011, 10:28
Advise ACIM to cut down the exorbitant prices Mr Shaw ! Make them (prices) reasonable as in other E.U. countries. Only then you may have "something's got to give" !
Julian Curmi
Feb 6th 2011, 11:41
The percentage of second-hand cars sold has exceeded the percentage of brand-new cars and so, the importers of brand-new cars are complaining to the Government that something has to be done. Now most if not all of the companies importing brand-new cars have also set up their own company or facility to acquire second-hand cars. So what are they complaining about? The percentages reflect their share as well or no. Is it a fact that they can't even compete with the other companies that import second-hand cars? Is it perhaps the way they treat customers? If their precentage sales of brand-new and second-hand cars are lower,then they may have to re-invent their business-model. Why come up with a threat that they may have to lay off employees? What cheek!. It is a question of 'if you can't beat them...join them' After all, this is a free-market. What should the Government intervene? The importers of brand-new cars have had it too good for too long.
R.E.Saliba
Feb 6th 2011, 10:28
We Maltese tend to love our cars and give them names and trick them up. Car importers know this so they make as much money as they can out of it.
The truth is that cars are a commodity and should be not be taxed so heavily or profitted from so much. They are just a means of transport and a mass of metal, plastic and glass.
Dear Mr. Shaw stop glorifying cars and placing them in a category of their own and accept that most Maltese are seeing cars for what they are and simply buying them from where they feel is best.
David Schiavone
Feb 6th 2011, 10:11
To be frank I bought a new car in 2006. I paid a hefty Lm 8,300 over 20,000 Euros.. The same care model i bought, nowadays you can get it for 9,000 Euros or even less, depending on the colour, trim & engine specifications which means less than half the full price i had to pay in late 2006. I could have bought a smaller car with a smaller engine from the far east which gives better reliability... So I question why does a person need to buy a new small family car for more than 20,000 when one can get a similar car for less but with better relability? (I referring to cars from Far-East and not from the UK, since I personally prefer a car with Japanese Technology and Enginering!) The only new cars which I see worth it to buy are i10, i20, i30, Picanto, Alto, Swift (Maybe!), Polo.. The rest all cost nearly 20,000 euros..!! New cars are expensive and simply not good for Malta's road considitions...! No ifs and no but's... More than that a sports fanatic can get a super car from Japan for a few bucks!
John C Micallef
Feb 6th 2011, 09:52
Local agens have my sympathy, but they've got to understand that the value of a car melts like an ice cube in mid august sun. I think that they need to look differently at things. Apart form being pro-active and importing their own 2nd hand 'certified' cars, they must also thrive to maintian their after-sales service. I know that many importers have made huge investments to bring their garages yup to scratch, and in fact, for major repairs, I always go to the car agent. But at €26 + vat per hour, they're not cheap, but they're good and I drive my car confidently after they've seen to it.
I was considering a 2nd hand import as my next car, but have gone looking around and have soone good examples and some terrible cars as well. Mileage as high as 90,000 miles (not kms!!) and more, and yet they were at the same price of a new, medium sized family saloon. So what would you choose?
John C Micallef
Feb 6th 2011, 09:47
This debate will never stop. Most of those buying 2nd-hand imports are driven by the budget. But there's also the issue that our roads are a disaster and adding on the depreciation on cars - both of these increase the demand for imports. They are also attracted with high-spec models that never actually made it to Malta via their local agents. Local agents do not have some magnificent margin on new cars. But someone has got to explain to me why a popular SUV/MPV in Malta has prices starting from €23,000 - whilst in the continent they start from € 17,800 - the same price of a 2nd-hand import!!! Does manufacturing a right hand drive car cost so much extra?
Joe.Galea.Harris anglo/malt.
Feb 6th 2011, 09:38
Why not buy one from the UK, many garages are offering 2 cars for the price of one, in Malta ha ha its a joke all round, cause buying and registering a motor vehicle is like asking for gold. in the UK they are two to a penny and all in better condition then Malta, sorry but its a fact.
G. Grech
Feb 6th 2011, 15:55
The government has always been inflating the price of cars to suite their deficit. The registration taxes always costed an eye. Hence, it follows that the tax regimes favour a 2nd hand car trashed by other countries instead of a new one.
We are used to recycle other countries left overs....not the politicians themselves...off course.
Reg.Wiltshire
Feb 6th 2011, 19:15
G.Grech yes we are from the UK and that the first thing we noticed, all the recycling crap/unwanted cars ie., Japanese cars land here in Malta and are sold for double or treble the price of a brand new one in most countries,at least someone is taken one for a ride, pity u guys as for the measly wages in Malta, 2nd. hand cars are way over the top for one's pocket, unless you were born with a silver spoon in your mouth just like most who inherit properties in Gozo and Malta and rent them out to us.
Albert Grima UK
Feb 7th 2011, 21:25
I don't know about you guys by personnally i would never buy a second hand import from the UK, firstly they are all been milked due to the reckless drving of some British drivers i know i live there, not to mention the state and condition, however on a much better choice i would be inclined to choose a good Japanese import, for a good reason the Japanese know how to look after their vehicles and are clean with low milage and checked before export to countries such as Malta who prefer to take on other naitons left overs.