European Direct



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Are cars so much cheaper on the Continent?
You may well have heard from the UK media and others that buying your car from the Continental can produce considerable savings compared to locally supplied cars. This was the case when sterling (GBP - ) was strong in value compared to the then continental currencies (German mark, French franc, Italian lira, and Spanish peseta to name a few) in the late 1990s and early part of the 2000 decade. This made the buying of products such as cars from other neighbouring European countries relatively attractive, which the media then encouraged individuals to utilise. On 1st January 2002, the main continental currencies were then substituted by the euro (EUR - ). This makes price comparisons across the Eurozone relatively straight-forward. 

Since then, the euro has tended to appreciate in value compared to most other currencies including sterling. Prices differences then not only started to even out, but in particular with cars, it has become the reverse. Thus, it is more costly to purchase (LHD) cars from the continent. Media coverage on this subject has tended to cease.

For example:
When 1 sterling was around 1.75 (57p) at its peak in June 2000, a car costing 17,500 on the continent would require just 10,000. During December 2008 the euro nearly achieved parity with sterling which would have meant that the same 10,000 (17,500) car would then the cost around the same in sterling as in euros or 17,500. In other words either 7,500 or 75% more sterling would have been required to obtain that very same car.

By the same token a 35,000 car equating to 20,000 in the early part of this decade, would have then required around 35,000 in sterling.

Since December 2008, sterling has increased in value against the euro so that the differences have become less marked since then.

Here a useful web-site that should give you the latest exchange rate indications:

latest rates of exchange of various currencies

By the way - here is link regarding current oil prices which you may find of interest:  

above is the latest crude oil price
(Javascript may need to be enabled)

How the new 20% UK VAT rate affects LHD cars.

New Cars (NMT):
The 20% VAT rate from 2011 new (NMT) cars will be handled by us when we register the car for you.

Nearly New (used) LHD Cars:

As VAT does not apply to the supply of nearly new (used) cars over six months of age and having covered more than 6,000 km, one is not able to escape that fact that the original VAT levied on LHD cars on the continent is now comparatively higher than the VAT rate now being applied in the UK.

As a guide for used vehicles, which we tend to source mostly from within Germany (having the greatest selection), the German VAT rate originally levied on (LHD) cars is currently 19%. Thus we are dealing with effectively a 1% difference or advantage compared to the UK.

UK VAT registered companies / persons
As we often supply ex German company owned fully VAT qualifying used cars, if this were to be supplied (invoiced) to a UK VAT registered company or individual, then the VAT may be accounted for in the UK, which means that the UK rate will apply. More details on request.

LHD Market Size vs. RHD Market Size - how it affects values

The size of the market for the resale of used LHD cars on the continent if considerable larger than the market for resale of RHD cars within the UK. Used LHD cars may be exported to countries on the rest of mainland Europe and beyond. Conversely used RHD cars may be exported within the EU to just Ireland, Malta and Cyprus that all drive on the left (see a history of left hand & right hand traffic page). These are relatively small markets in themselves. This results in a slower rate of price depreciation for used LHD cars on the continent than for used RHD cars in the UK. By virtue of the UK market size and limited export opportunities, it more difficult to resell a used RHD car thus causing prices to depreciate more rapidly. 

What this all means?

Although we provide quotations for new cars and nearly new cars, please do not surprised if you do not find the traditionally anticipated savings being achieved between a RHD car supplied within in the UK and an identical LHD car supplied from the Continent. On the other (brighter) side, once you own your LHD car, you should find that it should maintain its residual value for longer than if you were to own the equivalent RHD car.

 I would like to know more/see the next page 3 on 'facts' 

If you have any specific questions relating to the points mentioned here, please do not hesitate to either eMail us or phone us