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Import of used cars continues at record pace

Finns prefer to buy used cars over new ones. Retailers of new, lower-emission models say a tax overhaul is long overdue.

Antti Riikonen
The average age of imported used cars is between six and seven years. Image: Pekka Pantsu / Yle

The import of used cars has hit a new record in Finland, with 21 percent growth noted already in the first half of 2019.

"We have estimated that some 46,000 used cars will be imported this year. Last year already broke all previous records and now we are on our way to another all-time high," says Tero Kallio, head of Finland's Automobile Industry Association.

According to figures from the Finnish Transport and Communications Agency, private consumers, companies and car retailers imported over 20,000 cars in the first six months of 2019.

The most popular brands were Mercedes-Benz, Volvo and BMW, which alone accounted for half of the total used cars brought into the country.

Nearly half of the imported cars ran on diesel fuel, but diesel's percentage of the total is gradually falling. The share of hybrid-powered used cars being imported so far this year is three times higher than one year earlier, leading their share of the total to rise to 13 percent, while the number of imported electric cars has doubled. Used cars that only run on petrol now make up 36 percent of total imports.

Most from Sweden and Germany

The average used car that is imported to Finland is between six and seven years old.

Private consumers import about 40 percent of the total, while companies and retailers account for the rest. Half of the imported cars purchased by companies and retailers are either intended for their own use or for resale to other companies or consumers. The other half are cars that companies and retailers buy on behalf of private consumers, meaning that they handle all of the required shipping and paperwork.

"Sales of imported cars have risen to 15 percent of our total sales here at Kamux. This is up from previous years," says Tommi Iiskonmäki, Finnish country director at Kamux, a Finnish-owned chain specialising in the sale of used cars.

Some 80 percent of the cars that Finns import from abroad originate in Sweden and Germany. Sweden overtook the long-time leader Germany last year, thanks to a low Swedish krona exchange rate. Swedes are also increasingly buying an unprecedented number of new cars, a development which has brought more used vehicles to the market.

Money that could have stayed in Finland

The import of used cars is boosted by Finnish car tax laws, which impose a higher taxes on new car purchases. The sale of new cars in Finland has been in decline, and retailers have long been campaigning for vehicle tax reform. Among other things, they argue that better new car sales would allow Finland to better meet its emissions targets and inject more money into state coffers.

The government programme of Prime Minister Antti Rinne's coalition has committed Finland to ambitious fossil fuel reductions, but makes no mention of possible car tax reforms.

The Automobile Industry Association's Kallio estimates that Finland will spend 800 million euros on cars from other countries this year.

"The average price Finns pay to import a used car is 18,000 euros. On top of that, there is the car tax, which is 5,000 euros on average, for a 23,000 average total," he says.

What he finds strange is that the cost of a used car in Finland is often cheaper – around 4,000 euros on average. He says that the total cost of imported used cars frequently approaches the price tag of many new vehicles available in the country.

"An imported used car is increasingly seen as an alternative to a new, smaller – meaning lower-emission – domestic model," Kallio says.

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