UK Car Import Loan

There are great savings to be made by buying a used car from the UK and bringing it over to Ireland.

When the Sterling/ Euro exchange rate favors the Euro – it can end up being a lot cheaper for Irish residents to buy things from the UK priced in Sterling.  Since the vote for Brexit – the value of the Pound has fallen quite a bit   – making UK purchases even better value.
Buying a used car from the UK and importing it into Ireland can sometimes save buyers several thousand Euros – even when you factor in the expenses of travel, VRT etc.  If you are looking at buying in the more expensive end of the market – then you will definitely save money by importing from the UK.

St Dominic Credit Union now has a loan for members who wish to purchase abroad.  Members can borrow for all you may need:

  • Flights & Accommodation to the UK
  • Pay a deposit (In Sterling) on the car using Electronic Fund Transfer directly from your Credit Union Account
  • Once the member is happy with the car the balance can be transferred the same day
  • Pay for the VRT & VAT when your bring your car back.

Paying for a UK car in Sterling – what are the best options?

Paying a Deposit – Car dealers will usually ask for a small deposit. The recommended way to pay this is by Credit Card – that way the whole transaction should be covered for fraud.

Arrange for an Electronic Funds Transfer from your Credit Union account directly to the dealership.  Note, SDCU  don’t charge a transaction fee no matter how large the transfer.

What are the worst options?

Visa Debit Card –  There will be a charge for using the card to buy in Sterling – but it won’t be more than €11.43 whatever you spend.  Note that some cards may have a daily spending limit. The exchange rate used will be the Visa rate

Bank Draft –   this involves getting your Irish bank to convert your Euros to Sterling and write a banker’s draft in Sterling payable to the car seller. Many UK dealers won’t take a bank drafts because of forgery problems. Also – the exchange rate you get from your bank is likely to be a lot worse than the other options above.

Cash:  Paying in cash is not really a viable option. On larger value purchases most reputable car dealers won’t take cash. Even if they do – you probably won’t get the best exchange rate on cash and there’s also the worry of theft or loss of the cash.

Credit Card – using your Irish credit card to pay for a car in Sterling (assuming your credit limit is big enough) is not a good option. The exchange rate will be fairly good – but the credit card company will charge between 1.75% and 2.25% on a foreign currency transaction. Based on an average of 2% – this would mean a charge of about  €500 on a £20000 purchase.

Western Union –  the exchange rate used by these will be a lot worse than the likes of TransferMate or CurrencyFair.

VAT:For VAT purposes –  cars are considered second hand if more than 6 months has passed since the date of first registration or there is mileage of more than 6000 km. They are generally sold inclusive of UK VAT (20 %) if the supplier is a commercial seller (the supply is not liable to VAT if the seller is a private person).You will not have to pay VAT in Ireland on a second hand imported car from the UK.

Within an intra-EU transaction, new cars should be sold without VAT. But VAT will be due on it when you import it. A car is considered new if no more than 6 months have passed since the date on which it was first registered or if its mileage does not exceed 6 000 km.

VRT: Before you purchase any vehicle in the UK, ensure that you use the  Revenue VRT Calculator in order to find the potential VRT charges that you will have to pay here when registering the vehicle here.

The VRT due is based on a percentage of the car’s” Open Market Selling Price” (OMSP) as determined by the Revenue Commissioners.  This percentage varies, depending on the car’s CO2 emissions.  (VRT Rates Here)   Lower emissions means lower VRT. The lowest rate is 14% – rising to 34% for high CO2 emissions

Speak to the Experts:

For local advice on all things related to importing a car from the UK call to the team at CARSERVE, Waterford