Mr. Denis Murphy:

I would just like to make it clear that we are not members of the SIMI for the exact reasons the Senator pointed out. The manufacturers' finance offers have been in the market since 2009. The offers have been available throughout this recession and we would not have survived without the manufacturers' finance offers. However, the others have come through as well. Every single manufacturer has its own finance offer. One is getting everything from 0% to 1.4% to 3% to 5%. One would hardly ever get a rate above 5% whereas if one went to a bank to get a car loan, it would charge between 9.5% and 10%. These finance offers have been there throughout this recession but they still have not stimulated the demand to the level we would expect.

The problem is that disposable incomes have fallen significantly since the onset of this recession and people cannot afford the cars. I am talking about new and used cars. In the UK, the average price of a used car is £6,000 sterling while the average price of a used car in Ireland is approximately €15,000. It is a huge difference. Built into the price of a used car is residual VRT. VRT is supposed to be paid on registration of the car but it exists in the value of the car all the way through to the very end. It is a pricing issue. A tax of 43% on any product must be considered excessive, especially given the fall in disposable incomes in this country over the past number of years.