EU reimport: why the same new car costs less abroad

Manufacturers set list prices per sales market, not once for the continent. Purchasing power, the competitive situation, the state's tax structure and simply how many cars are meant to be sold there all feed into the decision. A model facing strong domestic rivals somewhere is priced differently there from one with no competition.

On top of that comes the difference between list price and actual transaction price. Where dealers work to demanding targets and the market is tight, discounts are larger. That part of the gap appears in no price list, and it is exactly what an intermediary buying in volume from those dealers captures.

And third, taxes. Where a state taxes the purchase of a car heavily, the end price is high without the manufacturer receiving more. That share is the only one a reimport cannot bring with it: it falls due in the destination country regardless of where the car was bought.

The term is misleading, because the car has usually never been in the destination country. What is meant is a new car a manufacturer built and priced for a particular market, which somebody buys there in order to register it elsewhere. With a brand that has a plant in the destination country the car does literally come back, hence the name — but technically that is not the point.

In practice there are two forms. The first is a genuine unregistered new car, ordered or taken from a foreign dealer's stock. The second is the day-registered car: briefly registered to the dealer in the country of sale and immediately deregistered again. That makes it a used car in tax and legal terms, whatever the odometer suggests.

The difference between them is not a label. It decides where VAT belongs, when the warranty starts running and what goes into the papers as the date of first registration — and the last of those affects resale value years later.

Inside the single market new vehicles follow a rule of their own, and it is the most important point here: the VAT belongs to the state where the car is registered, not the one where it was bought. The foreign seller therefore invoices net, and you declare the acquisition to your own tax administration.

That is no disadvantage, but it is a trap for back-of-the-envelope maths. A net price from abroad set beside a gross price at home looks like an enormous advantage, and most of that advantage disappears once the tax at home is added. Compare gross against gross or not at all.

Whether a car counts as new for VAT turns on two thresholds: the date of first registration and the mileage so far. Your tax administration will state both; they are deliberately not repeated here, because an out-of-date figure in a guide is worse than none. What matters is that the thresholds work independently — one of them is enough.

Manufacturers assemble standard and package equipment market by market, according to what sells there. A car from a southern European market is set up for air conditioning rather than for cold; where power is taxed heavily, the smaller engine is often the standard variant. None of this is a defect — it is a different configuration.

So get the configuration as a list of items rather than as a trim name. The certificate of conformity and the order confirmation name the fitted positions individually; the same trim name means different things on either side of the border.

The manufacturer's warranty on a new car delivered inside the single market normally applies across Europe and is handled by any franchised workshop of the brand. The conditions are in the warranty booklet, and that is where to look: duration, mileage limit and start date are the three entries that matter.

The start date is where a day-registered car differs from an unregistered new one. With a day registration the warranty runs from the registration to the dealer, that is before you take the car. A few months go quickly, and they are missing at the other end.

Goodwill is not the same as warranty: a voluntary contribution the manufacturer or the workshop decides on case by case. Experience suggests that a car not sold through the domestic dealer network and never serviced there has a harder time of it. That is not a legal entitlement being lost, but it is a difference worth allowing for.

There are two routes, and they differ above all in who your counterparty is. Buying directly from a foreign dealer gives you a contract with a company in that state; questions of statutory warranty follow that state's law, and enforcing anything in practice means travelling or writing there.

Buying through a domestic intermediary or importer is more comfortable, provided it sells the car itself rather than merely arranging the deal. That is exactly what to clarify before money moves: does the invoice name it as the seller, or is it only a messenger while your counterparty sits abroad? The answer is in the contract, not on the website.

The sore point is the deposit. An ordered car is ordered against prepayment, and months pass between order and delivery during which your money sits with the intermediary. Ask how the deposit is secured, have the answer written into the contract, and distrust any offer that pairs an unusually large prepayment with an unusually large discount.

The price gap is gross, not net. Between it and the amount that actually stays with you sit several items, each small on its own and together a good part of the advantage. Add them up before you order, not afterwards.

The item most often left out is time. An ordered car ties up your money or your old car for months; anyone needing a stand-in during that period has spent the advantage before the new car arrives.

Most clearly on popular volume models where the list price at home is high and domestic discounts are small. The better a model sells in its home market, the less the domestic dealer has to give away — and the wider the gap to a market where the same model is just one of many.

Worst on cars that are scarce anyway, and on options that are only customary at home. On a scarce model there is no discount abroad because it is scarce there too; on an unusual configuration the owner pays for it when selling on.

The honest test is a two-column table: on the left the domestic offer gross, with everything the dealer throws in; on the right the reimport gross, including transfer, registration and the tax at home. If the right column still shows an amount that justifies the effort, the matter is settled. If only a small remainder is left, buy at home and take your business to the dealer round the corner.