Many new cars are purchased via lease agreements, and applications for these have spiked,

This high demand has pt a strain on availability, with some models' arrival delayed to customer until 2025.

Hybrid vehicles have particularly seen soaring demand; in October, 2,673 new cars were sold in Estonia, compared with 1,681 in the month of August, according to data from the Estonian Association of Car Sales and Servicing Companies (AMTEL).

AMTEL director Meelis Telliskivi told "Aktuaalne kaamera":

"One of the reasons [for the boom] is definitely the upcoming car tax, and some larger deals also took place in October."

"I believe sales will be maintained at around this level in November. Whether there will be even more growth is hard to forecast, though last year's November and December figures will certainly be surpassed," Telliskivi went on.

Though over half of the cars sold in October were hybrids, diesel vehicles also saw a significant rise in sales, nearly matching sales of gasoline-fueled cars.

Electric car sales remain marginal, however, with just 119 units sold.

Raido Rosenfeld, managing director of Toyota dealer Elke Tallinn agreed the impending vehicle registration tax, which will take effect in the new year, is a factor.

He said: "I believe the end of this year is a period when most car dealers cancel their vacations and push them into next year as it promises to be quite busy and labor-intensive."

Leasing applications have similarly risen, driven by both private and business client demand.

SEB spokesperson: Leasehold applications up by a half on-year

Spokesperson for SEB bank Silver Vohu said: "The volume of leasing applications has grown by about 50 percent compared with last year, and this started from September."

"October saw a record in terms of volume and units, and we expect this to continue into November and December," Vohu went on.

"Private clients, in particular, have become more active, but there is also noticeable activity from business clients. The cause, of course, is the car tax, though in the case of business clients, a factor is also tax clarity, so they will know what the expenses will be in the coming years and can make decisions accordingly," he added.

The surge in demand has also led to supply issues, with some models' delivery times stretching into 2025 due to stock shortages.

"As of the present, there have been cases where some models are not available from stock, and their delivery times stretch into 2025. While there is still a range of options for most models, if a customer has a specific preference for equipment or color, that exact car may no longer be available in stock," Rosenfeld said.

"I hope there will still be some activity, but the sales numbers at the beginning of next year will certainly be significantly lower," AMTEL chief Telliskivi said in anticipation of what January might bring.

The car tax proved controversial when first rolled out as a policy, by the first Reform-SDE-Eesti 200 administration in summer 2023. After legislative changes necessitated by President Alar Karis returning the bill to the Riigikogu unsigned – over the issue of unequal treatment of disabled drivers under the bill's provisions – the law passed its final vote in July.

It will primarily affect older and also cheaper vehicles, hence the boon for new car sales.

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