There are large price differences when buying a new car within the EU. This does not mean that people in Southern Europe, for example, tend to drive small cars, while in Scandinavia there are many SUVs on the road, meaning that more money has to be spent on a car purchase in Scandinavia. It is much more about the price difference that exists for the same manufacturer and model in different EU countries. This survey is carried out, among others, by the European Commission. While it can be observed that prices are generally becoming more and more similar, there are still, depending on the model and manufacturer, some significant price differences when buying a new car. Important: The net price is taken into account. The price in Denmark in particular differs massively from the list price advertised in Germany – and is downwards. Price differences of several thousand euros can be found for most models. How is it that products are offered so much cheaper in Denmark?
The tax makes it expensive
Our neighbors to the north have a special tax system. When buying a car, Danes not only pay VAT, but also an extremely high registration tax, which is also called a luxury tax for obvious reasons. This tax can amount to as much as 150%. In order to sell vehicles at all, and if possible at attractive prices, manufacturers reduce profit margins to a minimum. Vehicle sales in Denmark therefore have more of a representative value—appreciable profits are supposedly not made. Nevertheless, manufacturers want to be dominant globally and therefore accept the low profit margins. Adjusting profit margins to the respective market is common practice. In some countries, people are less inclined to spend a lot of money on vehicles; in others, it is a matter of course to regularly buy a new car and thus demonstrate a certain standard of living. Due to the luxury tax, the price difference in Denmark is by far the most significant.
Reimport – What is it?
Taxes are only ever levied where the vehicle is registered. So, if a German citizen buys a vehicle manufactured in Germany for the Danish market and also exported there, they pay the net price in Denmark, which is significantly lower than the German net price. Since there are no customs duties on vehicles within the EU, the vehicle can be brought to Germany relatively easily. VAT is then levied locally, which would also have been levied if the vehicle had been purchased in Germany – on a higher net price. By re-importing, the buyer not only saves on the net price, but also on VAT. This sounds pretty simple. Is there no catch? Potential safety concerns or differences in quality are often cited. However, these safety concerns are unfounded: The vehicles roll off the same production line and meet the same quality standards. Only the equipment can vary depending on the destination. For example, some features are not available or even selectable on the much smaller Danish market. Various dealers have specialized in re-imports and can offer good purchasing advice that protects customers from unpleasant surprises.
