Cyprus sees greatest fall in car prices

CYPRUS has seen the greatest fall in car prices in the EU over the past year, the European Commission has announced.

According to a Commission report, the reductions came at a time when the average European price for a car increased by 1.1 per cent.

The island’s biggest price drops took place in the first months of 2007. The EC analysed prices from the time cars were manufactured pre-tax until the final sale price, including taxes.

The report showed there was a 10.8 per cent decrease in the average price of second-hand imported cars, brought on by the government’s tax reform that took place last December.

The impact of the cut in duty can be seen by the 33.1 per cent increase in car registrations in the first seven months of 2007, reaching 40,285, compared to the same period in 2006, when 30,259 cars were registered.

Registration of used cars alone saw a 35.2 per cent increase.

A similar drop in used car prices has been enjoyed by Slovakia, which despite having the highest manufacturing costs, has seen an 8.5 per cent drop in prices.

A further ten European countries have reduced the prices for second-hand cars.

According to an announcement by the EC, car prices may have increased by 1.1 per cent in the European Union (1.5 per cent in the eurozone) compared to May 2006, but inflation increased by 2.1 per cent in the EU and 1.9 per cent in the eurozone.

Furthermore, figures showed that the value of cars tended to increase less than the average value of other products.

When the first taxation reform in the car sector took place in December 2003, Cyprus remained the third most expensive country in the EU. Before the change in taxes, consumers were paying 42 per cent more for cars than the average European. Following the first reductions, Cypriots were still paying 17 per cent more than other Europeans.

When price were reduced further in August 2004, the difference went down to 10 per cent, and following the most recent EC report, this has reduced further.