Image courtesy of The Irish Times.
With the Euro / Sterling exchange rate recently becoming much more attractive for car buyers considering a UK import, we thought we’d describe our recent experience with this process for buying a car.
Our new arrival in November which brought the brood to three meant that we had to rethink our car situation. Neither of us care too much about the appearance or brand of car we drive but let’s face it, in rural Ireland one tends to spend a lot of time driving. So having a car that matches your needs makes moving the family around easier and maybe somewhat pleasant. Our VW Passat estate just wasn’t up to the job of managing three kids car seats easily. Having spent the winter in Alaska where our in-laws use MPVs, the obvious flexibility of these vehicles was compelling and as one gets older and busier with kids, one tends to look more at the practicality of things than the cosmetic appeal. We came home with the plan to upgrade (or downgrade depending on your view).
Figuring we’d save some cash, we opted to try to sell our own car first. So we cleaned it up, took some pretty pictures and posted our 2011 VW Passat estate online and watched the “views” roll in. Lots and lots of tyre kickers it seemed.
But no calls.
We dropped the price to try to spur the interest (14,500, down to 14,000).
Finally we had an interested person, the only interested person as it turned out, who came and viewed and bought. It only took about 6 weeks and we got 13,500 in the end. A decent price considering the advantage it gave us in making our next purchase.
For various reasons we had settled on a Peugeot 5008 7-seater as our replacement. Having bought a UK import before through a local dealer we decided to try this path again.
The exchange rate plays a big factor in whether this route is advantageous. At the time we started talking to a dealer about doing this, the Stlg/euro rate was at 1.27. Not a good exchange going by historic trends but surprisingly it was good enough to make a saving. The average UK car tends to be higher spec than the Irish equivalent and so the expectation is that you will get something at least nicer if not cheaper assuming the same year and mileage. For some it makes sense to travel to the UK, make the purchase and drive the car back to Ireland, sorting out the VRT payment along the way. We weren’t prepared to travel and so we opted for one of many dealers now who will offer this service for their own fees.
The appearance of online auction sites where buyers can get full bidding access has made this process much simpler than it used to be – both for dealers and private buyers it should be noted. In the two times we have been through this process, no one connected to the dealer was physically inspecting the car to ensure that it was good purchase. Instead the more reputable auction sites use a pre-check process that rates the cars according to their mechanical and cosmetic condition. Grade 1 is as new, and grade 3 is decent while a grade 5 might have warning lights showing or some serious bodywork issues. Apparently the dealers trust this assessment and rating enough to bid remotely on the car on your behalf. In other words they are not doing anything that you can’t do yourself except taking the logistical hassle out of the process. Also note that there is a fee for buying at these auctions which is related to how frequently you do it, and so a dealer will benefit here over the once-off buyer who pays more –for example 9.5% of the purchase price for a £10,000 value car was quoted on one site, which is significant.
One thing to beware of at this point: For a dealer who buys a car this way and then offers it to you with warranty cover, they are providing additional value on top of the car. Knowing that the car that was bought unseen will have a warranty with your local dealer certainly reduces the risk and brings some peace of mind. One dealer I bought from before did this but in this most recent case, the dealer has outsourced this to “Mapfre”, so for a discounted price I could buy a warranty from them for a year to cover the car. Apparently when you buy an extended warranty on a new car in Ireland It may be covered by this Spanish company based in ireland, so they are well established in this market.
The point for me though was that if I did buy this UK auction car myself and avoided having to pay a dealer to do it for me, then a concern was that I would not have a warranty, until I realized that I could buy one if I wanted. This makes the idea of doing this whole process myself quite feasible and with low risk.
Would I bother?
Certainly after going through this process and seeing how it works, and feeling that the dealer did little for his cut other than get the car shipped over to me and put through the VRT payment process, I would strongly consider it.
You get to pick your car, and importantly you get to bid yourself so you know exactly what you are willing to spend as the bidding is driving the price up during the auction. This avoids the difficulty of having to provide a bid limit to the dealer in advance without knowing if it will be enough for a successful outcome, only to find out later that you lost your ideal car to another bidder for the sake of another hundred quid.
Some useful links:
To transfer money from euros to sterling – I recommend avoiding banks and going with Transferwise a most excellent facility that charges the least for exchange transfers.
Of course we bought before “Brexit” happened, and so now the post- Brexit exchange rate being in your favour, makes this a most attractive option for those willing to put in the additional effort.