October 4, 2022

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Consumer and Economy |  The collapse in car sales - impatient customers can get a huge extra bill

Consumer and Economy | The collapse in car sales – impatient customers can get a huge extra bill

The number of new passenger cars registered for the first time at the end of July decreased compared to the previous year.

The collapse is 31 percent compared to July of last year. Just over 75,000 new cars were registered at the end of last month, compared to more than 94,000 last year.

So far, it looks like 2022 will be a special year for the new car market. Many expected a significant reduction due to production and delivery challenges, which in turn are linked to the war in Ukraine and the still raging pandemic. Many will realize that there are big problems with the delivery of new cars. Therefore, the decline is not particularly surprising, says Director Oyvind Solberg Thorsen of the Council on Road Traffic Information (OFV) in a press release.

Waking up towards autumn

Solberg Thorsen also says there will be a faster rate of new car deliveries after the fall.

– It is important to remember that the low registration rate is mainly related to the lack of new cars that have arrived in the country and are ready for delivery. Many car buyers are now eagerly waiting for their new cars that were ordered half a year or more ago.

In August last year, new car sales rebounded strongly again after the holiday month.

– It will be interesting to see, but with war and epidemic, conditions are different this year, says Solberg Thorsen.

In addition, we’re seeing general price increases on several fronts, we’re having unusually high fuel and electricity prices, and interest rates are going up.

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Waiting time can lead to an expensive bill

Many who have ordered a car in the spring and summer, or who are buying one now, may have to wait until 2023 before the car is delivered.

Many importers and traders have long waiting lists. This could mean that a large number will not get their car before the end of the year. Now 8 out of 10 new cars are electric cars. For those who ordered a car that cost more than NOK 500,000, but did not receive the car before the new year, there will also be value-added tax on the amount over this amount, says Solberg Thorsen, referring to the government’s decision.

This happens because the authorities impose VAT on the amount on the day the car is delivered, and not on the day of the order.

For example, if you order a new electric car for NOK 600,000, you will receive an additional VAT invoice of NOK 25,000. Then VAT is calculated on NOK 100,000 in excess of NOK 500,000.

Delivery problems

At the end of June, Nav wrote that car sales were deteriorating due to delivery problems.

– Thor Egil Braadland, NAF Communications Officer, said the reason for the decline was delivery issues, not that people didn’t want new cars.

– He said that there are waiting lists for new electric cars until 2023, and if you order a new car now, it is exceptional that dealers can deliver new cars quickly and before the New Year.