Cars cost more

Car-buyers in Portugal continue to be penalised because of the highest taxes in the European Union, according to a new report.

A European Commission study analysed the prices of cars in the 15 EU countries on November 1, 2003, before and after taxes were applied. This exercise is conducted twice a year to encourage consumers to benefit from the single market and seek out the best deals. In the last few years, base prices in the 15 countries have been converging – a phenomenon attributed to the introduction of the euro and the resulting ease of comparison of prices.

The study proves that it is worthwhile for people to buy a car ‘in transit’ in a different country other than their own, only paying the appropriate taxes in their country of residence afterwards. The test showed Denmark continues to be the most attractive country for foreign consumers, ironically because of their exorbitant taxes – 200 per cent of the value of the cars itself – something which leads manufacturers to reduce prices dramatically. Base prices in Portugal, on the other hand, are among the lowest in the EU. But after compulsory taxes are levied, the situation is reversed and Portugal becomes one of the most expensive countries.

For example, according to the report, in Portugal, an Alfa Romeo 166 costs 28,113 euros before tax, but jumps to 43,347 euros after tax – the highest in the European Union. While in Luxembourg, the country with the lowest tax, the car can be bought for 27,087 euros. At 29,000 euros, the Citröen Xsara Picasso also costs most in Portugal – 10,000 euros higher than in Germany. Paradoxically, this model also has the lowest base price of any EU country in Portugal.

On the level of luxury cars, a BMW (series 7) costs almost 45,000 euros (with taxes included) in Portugal, almost 10,000 euros higher than in Germany, France, Luxembourg or Italy. However, this car costs more in Greece, Holland, Ireland and Finland, where prices hover at around 50,000 euros or higher.

A Peugeot 206 costs 12,700 euros in Portugal, against 14,800 in Finland and Ireland, but 10,500 euros in Italy or France. A Fiat Punto 1.2 costs 11,500 euros in Portugal, as against 10,000 euros in France, Greece, Italy and Luxembourg. The same vehicle costs almost 13,000 in Ireland and Finland.