Most people will ask the question as to why left hand drive cars are more expensive abroad we take a look at why…
It’s not anything to do with left hand drive cars being cheaper here in the UK because we are a right hand drive country. In fact LHD cars tend to be priced at the same level as RHD cars due to the demand with so many people travelling to and from the European continent. The UK is however one of the cheapest and most competitive market in Europe. With the second/third biggest population whom own per cars per household than other countries it’s a fast paced and dynamic market where the commodity shifts in price to sell!
That comparative dynamism is one of the key factors in pricing when compared with places like Spain, France and Portugal. One of the initial factors is that pre-tax pricing is lower in the UK. Principally because cars are priced to compete and sell. In smaller market places this isn’t a driving behind car sales so typically importers and dealers are pricing higher before tax. So when we talk about tax free sales this is the first area of key cost saving using discounts versus UK pricing or using our buying power to buy at bigger discounts against continental pricing.
You then have the addition of the taxes. This is both value added tax or VAT/IVA/TVA etc. Again the UK has one of the lower tax rates which gives a 1-7% price advantage. Secondly there is registration taxes and as we have discussed numerous times this is pretty costly in many placed. France ranges from €0 to €8000, Spain from 0% of cost price to 16.75% in some provinces and Portugal is sometimes irrationally high. For example a left hand drive Range Rover can attract up to €36000 tax there! What this also does is provide a higher point from which a car has to depreciate. If a car is £12000 including taxes here and depreciates by 40% in 3 years it is worth £7200. The equivalent based on this depreciation in Spain might be £8200. That said cars do not have the same level of depreciation as they do here.
In the UK used prices are driven by book values which work very much like stocks and shares, rising and falling. This kind of thing isn’t as regimented in the rest of Europe. Vehicles are priced on market value as such. Dealers margin expectation are a lot higher also so this keeps the pricing a lot higher as well. Generally speaking we expect a UK pricing structure car to be worth at least 20% less than a typical European car after registration costs have been paid in the destination country.
Total Auto’s used car buyer has this to say – “It can be pretty tough choosing used stock. Sometimes we price cars that are being offered to us by suppliers that at their trade values are coming in at retail UK money which doesn’t work. Some brands are really hard to make work used as well. Take something like left hand drive Vauxhall or Opel as we know it. Here in the UK these loose 40-50% of there new value in the first 4 years but this trend is no where near seen on the continent. For example, this morning I was looking at a LHD Opel Zafira that was priced trade at £8000, which retails here at £6000 here. Retail abroad would be around £10000 to £11000!”
So through combinations of pricing, price perception, dealers margins and market competitiveness that is why you will notice a massive disparity in pricing abroad. That however is a great reason to talk to Total Auto about buying your next car!