Car purchase rush ending as Estonia's new car tax about to take effect
Estonia's new car tax is entering into effect on January 1, prompting a flurry of new and used vehicle sales in the final months of 2024. As the year draws to a close, however, some cars are sold out, while time is already up for other buyers.
Saturday was already a quiet day at an Amserv dealership that sells Toyotas. Even so, December will still mark the peak month of the pre-car tax buying rush, when new car sales were up severalfold.
Many old cars were also traded in for more lightly used ones, and diesel car sales soared, accounting for as much as 70 percent of car sales last month. Electric vehicle (EV) sales, meanwhile, continued to decline.
People have been rushing to take advantage of the situation before the country's new car tax kicks in.
"It was cars with the highest annual tax starting next year and [highest] registration tax that people definitely wanted to get within this year," noted Amserv CEO Margus Nõmmik. "For other models, the panic seems to have subsided a bit."
The most popular SUVs are already sold out, and it won't be possible to import more from central warehouses in Sweden in time.
"Even though it's been quiet at the showroom today, our back office won't actually make it home for Christmas dinner until late, because the last ships arrived yesterday," Nõmmik said.
"So we're working full throttle to prepare the cars that are still going to be delivered this year," he continued. "But if you want to come to the showroom, there's still time! There's still a couple of business days to go, and we're ready."
For those financing the purchase of a vehicle, it may already be too late to wrap up the process before the year is out.
"The half day on December 23 is really the last chance to get it done," said SEB Liising CEO Rein Karofeld. "The transactions you may want to complete here at the dealership may still be doable for us. For transactions between private individuals, time has already run out."
Karofeld explained that in accordance with the Law of Obligations Act, SEB Liising pays out money to consumers – if the consumer is the seller – on the 15th of the month, i.e. after the withdrawal deadline. Only then do they complete the necessary transaction with the Transport Administration as well.
"But that point has unfortunately already passed," he noted.
Joel Jesse, director of the Transport Administration's Traffic Division, said that it may still be possible for someone to get their car registered before the end of the year.
"There are indeed a few days left until the end of the year," he acknowledged. "There are actually two full business days and two shortened working days left."
Customer service agents at the Transport Administration can also still register new entries in the online system meant for importers.
"You can't exactly say that ship has sailed," Jesse remarked. "The issue is definitely with used vehicles, where if you look, you may still be able to find appointments to get your vehicle inspected."
Non-financed car sales between private individuals, i.e., direct person-to-person transactions, are the easiest to confirm online – and this service is available even during the holidays.
New car tax, fee from January 1
Estonia's Motor Vehicle Tax Act will come into effect on January 1, 2025, introducing a new motor vehicle tax that will be effective immediately.
This tax must be paid on all vehicles entered in the traffic register, but the precise tax rate depends on several factors. The base amount of the tax is €50, and the remaining sum is calculated based on the vehicle's CO2 emissions and gross weight.
An additional registration fee will be required when registering a vehicle for the first time.
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Editor: Valner Väino, Aili Vahtla