THE TIME IS NOW - THE ELECTRIC REVOLUTION IS HERE
TRADING IN FOR AN ELECTRIC VEHICLE – IS THE TIME NOW?
Are you thinking of trading in your car this year and is it time to trade-in for an electric car? Here’s some facts to consider about making the switch.
In Ireland, sales of electric cars started off slowly, but now, Irish people are coming around to the idea of plugging in their car before they make a trip. It makes sense, we have a compact island: with most towns and cities accessible within 3 or 4 hours.
Figures from Eurostat indicate there were 26,220 cars in Ireland driven on “alternative energy” in April 2018, which equates to 1 per cent of the total stock. This appears small, but in Spain the proportion is just 0.1 per cent of the total stock. Carzone’s recent motoring report, found that two thirds of those surveyed, plan to purchase an electric car in the near future. The government is also keen to increase ownership to 10% of all vehicles in 2020, with a number of incentives that will trigger consumers to think ‘electric’.
HOW MUCH ARE ELECTRIC CARS?
As the technology is still relatively new, electric cars tend to be more expensive than their diesel/petrol counterparts. A huge proportion of the cost is actually down to the electric battery. As technology advances, costs have been coming down and combined with government incentives, owning an electric car has now become a viable alternative.
Electric cars have been criticized in the past for their range, but the technology has moved on: with the Jaguar I-Pace offering a super range of 292 miles or 470km and the 201 BMW i3 range offering 161 miles or (260km). The biggest fear for motorists is that the car will run out of power on a journey, which has been dubbed “range anxiety.” However there are now over 1,100 free public charging points all around Ireland, including 70 high speed charging points, which can charge your car to 80% capacity in as little time as 25 minutes.
At Conlans Naas and Limerick, a BMW i3 starts at €45,760 and the BMW i3 s (sport) starts at €49,060, (approximate prices, including SEAI & VRT grants and dealer delivery charges). With a low APR of 3.9%, an all-electric 201 BMW i3 is affordable, starting at €465* per month.
Sports cars have also embraced the electric revolution with BMW introducing two all-electric sports models: the BMW i8 Roadster (€156k), and BMW i8 Coupe (€140k), (both prices include delivery charges and grants).
In the SUV category, Jaguar was the first to introduce an all-electric version with the iPACE, which won Irish Times Car of the Year 2019. The iPACE is available at Conlans Jaguar Land Rover, starting from €82,835* (incl. delivery charges and grants).
This summer, will see a vast array of new electric cars onto the market, including the Peugeot e-208, which is the French brand’s first all-electric production car with a range of 211 miles. The new e-car will be more expensive than others models in the 208 range but with similar design cues. Conlans Peugeot in Rathangan commented:” We’re seeing more customers ask about all-electric cars, and Peugeot has also cleverly thought of a roadside rapid charger, which eliminates that fear of running out of power.”
WHY GO ELECTRIC?
There are a number of grants available when you switch to electric, which amount to around €10k, which make an EV worth considering. There is also zero Benefit-in-Kind for cars valued under €50k for businesses and fleet. Typically, the Government incentive is €10,000 on an electric car where its list price is greater than €20k. These grants and rebates are mostly deducted from the initial cost of the car by the dealership, which also eliminates all the paperwork for the customer.
Going electric is not only beneficial to private consumers, but there are incentives for businesses to consider the switch. It’s worth nothing, however, that for businesses, the top grant from the SEAI is €3,800, not the €5000 given for private purchasers.
There is also another benefit as the government offers exemption from benefit in kind (BIK) for electric cars (since the budget in Nov 2018, this has been capped for cars valued under the €50k).
Be warned, however – this doesn’t include hybrids and it is due to last until the end of December 2021. So provided an employer buys an e-car under €50k, the car will qualify for the full relief. The 0 per cent BIK rate is beneficial for both employees and employers: It means the employee can avoid tax, and the employer won’t have to pay employer’s PRSI of 10.95 per cent on the vehicle. Finbar McCarthy, BMW Business Partnership Manager at Conlans commented: “When you add together all the savings including; lower tolls, lower cost of servicing, lower fuel costs, zero BIK, zero emissions and the benefits to corporate social responsibility – it makes good sense to go electric for both the bottom line and your workforce.”
HOW DOES IT WORK?
Typically, if an employer offers a company car, the employee will pay BIK on it. This works by calculating 30 per cent of the original market value of the car and applying tax to this amount, with a reduction for business travel in excess of 24,000 km. So, for example, a car worth €30,000 will cost an employee €2,000 a year in tax for lower-rate payers and cost €5,200 for those on the higher rate. One important point to note, from the Revenue’s perspective, BIK relief works on the “original market value”. So, by adding extras to the car, it may bring the value over the €50k, which will bring BIK into force, so it is worth keeping that in mind.
HOW ABOUT A CAR ALLOWANCE?
Many employers have moved away from offering company cars in recent years in favour of car allowances. But care is advised – an entitlement to such an allowance doesn’t mean an employee will benefit from the BIK relief, as an employer has to BUY an electric car to qualify for the relief. Revenue treats a car allowance as “pay”, which means they are subject to tax, PRSI and USC. If your employer offers you an allowance of €400 a month, you will pay tax on this, which reduces the benefit to €192 if you pay tax at the higher rate, or €320 if you pay at the standard rate. If, however, your employer is willing to buy you an electric company car instead, and it’s within the cap, you won’t have to give up any tax.
When all is added up, going electric either privately or from a business perspective, makes a lot of sense to both the bottom line and to the environment. From the early days of the Tesla, we are now lucky, there are a lot more EV models to choose from, with designs to fit your taste and lifestyle.
Please note all costings are based on the most recent available estimates and are not exact. Siobhan Warfield Beattie is Marketing Manager for Conlans Motor Group. www.conlans.ie