Plunging second-hand prices and a strong Euro has Irish buyers clamouring for UK cars.

Value-conscious Irish drivers are buying cars from Northern Ireland or Britain in their thousands. The strength of the Euro (which Ireland uses) against the £ and changes in the country’s vehicle taxation laws means that buying outside Ireland makes plenty of sense.

Last year, Irish buyers bought over 98,000 new and second-hand cars from the UK – an astonishing amount considering the country’s 2 million cars and 4.2 million population. But the Euro has climbed in value against the £ by 20% since 2007. Meanwhile, prices of used cars have fallen in mainland Britain as drivers have scrambled to downsize and cut costs in the face of fuel prices which at one stage this year hit all-time highs. Put all this together and it is anticipated that this will prompt an even greater influx of imported cars this year.

Potential savings can be huge. A two-year-old Volkswagen Passat SE 2.0 TDi would typically cost 26,800 euros (£21,219) if bought locally from a dealer but only £9302 (11,749 euros) if bought from a car trader in Britain, including all taxes. Cars are more expensive to buy in Ireland because each is subject to Vehicle Registration Tax (VRT). Typically, this adds 25% to the car’s cost. Previously, the amount of tax paid depended on the car’s engine size: the bigger the engine, the higher the tax. However, since July 2008 this has changed to vary according to a car’s according to a car’s carbon dioxide emissions: the lower they are the less tax paid. Cars with CO2 rating of over 225g/km – such as big off-roaders, some luxury saloons, MPVs and performance cars – are particularly heavily taxed.

This applies to all new cars but also to second-hand vehicles, if imported. The VRT on a used car is based on a notional market value for the car, set by the Irish government, and also its carbon dioxide emissions. For a car such as the Passat 2.0 diesel, these are low – explaining the huge savings possible when buying such a car from the UK.

Overall, savings on offer average 15-20% once taxes, shipping and other costs are added. Dealers in Northern Ireland and also in Britain are capitalising on the savings they can offer, with some even mounting advertising campaigns in the Republic. For buyers, the distances involved are a potential problem. There are also differences in specification between British-market cars and those sold new in Eire. For instance, Corsas, Astras and Zafiras supplied new in Ireland are usually badged as Opels (as they are elsewhere in Europe) and not as Vauxhalls.

However, canny buyers can overcome the distance issue by arranging via the AA or similar organisation to carry out a pre-purchase inspection and report, costing £250 on average.

Price differences BMW 320d SE 4dr 2006, 40k miles UK car: £13,976 Irish car: £18,995

Volkswagen Passat 2.0 TDi SE 4dr 2006k 50k miles UK car: £9302 Irish car: £17,850

Vauxhall (Opel) Corsa 1.2 SXi 2007 12k miles UK car: £8495 Irish car: £11,086

All cars advertised by main dealers. UK cars are net of Vehicle Registration Tax for Ireland, inspection and shipping charges.