Older used cars with higher taxes? GANVAM calls for raising taxes on these vehicles to prevent their sale

Getting the oldest cars off the road requires discouraging their sale in the private used-car market. So-called “mileurista” cars—those sold for 1,000 euros or less—are the main players in this segment of the market. Their low price in this market means that private individuals keep buying and selling obsolete vehicles when it comes to safety and environmental standards, with the serious harm this causes.

Thus, the existence and strength of this market means that many cars between ten and fifteen years old keep circulating instead of ending up scrapped, as would be logical.

The National Association of Motor Vehicle Dealers, Repairers and Parts Suppliers (GANVAM) wants to fight this type of transaction in the market, many of which are carried out in a way that is detrimental to the consumer, since they offer no kind of commercial guarantee, either for the vehicle or for its roadworthiness. For this reason, GANVAM president Lorenzo Vidal de la Peña requested, during the presentation of the new edition of the Used Vehicle Show that has opened its doors in Madrid, that the transfer tax (ITP) applied to transactions involving this type of vehicle be increased by up to four percentage points, in order to discourage their sale and cause a greater number of them to end up in scrapyards, thereby preventing them from remaining on the road. To this end, GANVAM proposes that the current rate of 4 percent charged on these transactions be doubled to 8 percent.

GANVAM has also recommended that the public authorities encourage private individuals to change their cars more frequently, thus promoting the removal from circulation of the oldest vehicles that make up our car park. According to GANVAM, “continuing scrappage schemes and including used vehicles up to three years old in the aid programmes would be a great help in rejuvenating the Spanish car park.”

For Lorenzo Vidal de la Peña, president of GANVAM, the future of the used-vehicle sector depends “on generating consumer confidence, not only in the product being sold, but also in the professional selling it.” In the months elapsed in 2018, sales of used vehicles at dealerships and used-car traders have increased by more than 30 percent compared with the same period in 2017. De la Peña highlighted the importance of this growth rate, given that it means multiplying by six the growth rate recorded in the private market over the same period (+5 percent), which shows that consumers increasingly trust professionals in the used-vehicle market.