5 June 2013

That 132 registration plate explained ... again

Look, there's a lot of confusion out there about the 131/132 registration system, writes Brian Byrne. This is despite a lot of people like me writing to explain it, and the motor industry itself trying to get the message across.

So, as we come up to the 132 registrations on July 1 (and the 141/142 next year and subsequent years' similar), what will it mean to you, car owner and car buyer? Actually, not a lot. Not now anyhow. But it might help your local car dealer stay in business, and maybe keep a few staff employed on a more regular basis. Down the line, it might make that new car you buy after July 1 a bit more valuable as a trade-in.

There's a very visible ageing signal on a car in Ireland. The 1987 switch to a numberplate system that clearly put the year of registration up front emphasised a car's nominal age, and very much shortened the key buying time. Before that, the non-dated system had allowed a more relaxed attitude, and sales were spread more evenly through the year.

In the last couple of decades or so, the rush to have a current year plate telescoped the main buying period to about three months. By April there was only about 30-40 percent of the total year's sales left to stretch through to December.

Think about it. A car dealer's biggest overheads are his premises and equipment, and his staff. He can't do much about the former when things are quiet, so his only way to shave expenses is to let surplus staff go during the many months of doldrums.

It's a tough way to run a business. Especially hard on the unfortunate employees who get laid off. Hard too on the taxpayer who has to support them with social welfare.

For a long time, the Irish motor trade has been trying to find a way to even out sales again. The twice-a-year registration periods as used in Britain since 1999 was what they envied.

Prior to then, Britain changed its registration period once a year. In August, connected to the fact that a lot of next-year car models came out around the same time. The motor trade there then had a similar three month annual 'bulge' as our January one. They shifted to a twice-a-year registrations in March and September.

Did it work? Well, yes. Eventually. Fast forward to 2012, when a tad over 2m cars were registered in Britain. Of those, 1.2m were sold in the half-year with the March registration start (yes, I know it's confusing, but the overall figures are still provided on a calendar year). And half of those were sold in the 3-month March-May period. With more than half of that particular lot in March itself. But the dealers could look forward to a similar situation in the autumn.

So here's how it works out in that neighbour market these days. March and April are busy times in the showrooms, tapering off somewhat in May, and June-August being very quiet (holidays will do that). September is busy, October decent, November quiet enough and December-January very quiet.

In Ireland, the trade is hoping to achieve a similar pattern, albeit with the peaks in January and July. After years of lobbying for such a system to no avail, they finally got a government ear with the (very artificial) worries about the year '13' on numberplates maybe clicking a superstition button among Irish car buyers. Tax on cars is an important resource for the State coffers. So the State listened, and finally gave the nod.

The trade might get that evening out of sales. It surely hopes so, because the 2013 year to date drop in business by about 15 percent is yet another blow in a recession that has made a lot of car sales operations simply unviable. (We actually have too many dealers for our population, but that's another story.)

Will it help you, though, when it comes to changing in your 132 reg as compared to a 131?

Maybe. But not by a lot. The car you buy for €24,000 today will be worth, probably, €10,000 in three years' time. It's just about arguable that there may be a thou in the difference between a 131 and a 132 when you're looking to change. But that will depend on how well you're able to argue with the salesman.

That's a really hard €1,000. And that's three years away ... but if you can buy now, buy. Not for the 132. Or for the dealer.

For yourself. And maybe that same salesman facing the chop?