Simon Emery your friendly ex-pat car dealer gives you the inside knowledge on motoring, buying and selling cars in Cyprus.

Why are used cars so expensive in Cyprus?

Most expats looking at used cars in Cyprus can’t believe the cost especially of older cars. The prices are inflated because of a government duty that has been charged on the cars when they were first registered on the island. No one seems to understand just how these duties were derived at and how they have changed since EU concession. The duty or consumption tax as it is now know is an environmental tax that is charged by customs to all cars with the exception of retired ex-pats that can apply for a duty free car which I will cover later.

The duty on the old system was made up of two parts, you might think this not relevant as it is now changed but this is the reason that older cars are so expensive. The first part was the duty that was charged on the invoice price of the car when imported. The duty was a percentage of invoice and was banded the first band was up to 1600cc, this was 65% of invoice, the next band was from 1601cc to 2000cc, this was 95%, the final band was 2001cc and above which was 130%. The other part of the duty was a luxury tax this was effected by the extras on the vehicle but was roughly as follows,

>1000cc = £25
>1800cc = £850
>2000cc = 1075
>2500cc = 2200

To give an example if you imported a new Toyota Yaris 1.0 that cost £7000 you have to pay £4550 duty and £25 luxury tax making the duty paid price £11575. At this point you must be beginning to realize why prices are so high as if you bought that car would you sell it for say £5000 after two years? of course you wouldn’t. The Cypriot market is very different to the UK market in this way, in the UK we change our cars every 3 years on average but here in Cyprus because of the high cost of purchase people keep their cars much longer and tend not to sell them when they are very old but to keep them in the family.

The new duty system or consumption tax as it is now known in Europe, is also cc related. Some people are of the belief that customs can’t charge tax on car in the EU, this is not true as many EU members charge a similar tax i.e. Ireland has a Vehicle Registration Tax which is 70% on new cars and 30% on used cars. The new system favours small cars and is a good change for most people. There is only one tax which is cc related and goes up the bigger the engine as follows:

>1450cc = £0.51 per cc
>1650cc = £0.86 per cc
>2050cc = £2.71 per cc
>2250cc = £2.86 per cc
>2650cc = £5.51 per cc

There is a reduction of 20% for cars under 36 months and an increase of 20% for cars over 60 months. To use the same example The new Yaris 1.0 that cost duty free £7000 would carry consumption tax or £510 les 20% for being under 36 months making the duty paid price £7408. However under this new system large engine cars are unbelievably expensive a 3.0 car now carries £24000 consumption tax this has priced them out of the market. The increase in cost of the new larger engine cars has had an effect on the used cars as no one is buying them new so used ones are harder to find and more expensive to buy.

Due to the change in tax the market has changed and it has never been cheaper to buy a small engine newer car but this has not had time to work through to the older market yet, I believe that in five years it will be possible to pick up older cars at reasonably price like you can in the UK.
 
If you have any other motoring queries and want a straight answer call Simon on 00357 99315649.