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Malta’s Second Hand Car Import Industry Has Become Unprofitable As A Result Of Brexit

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The once lucrative second-hand automobile import business has come to a standstill in Malta following tariffs and barriers implemented as a result of Brexit. 

The divisive Brexit deal, which saw the United Kingdom split from the European Union, has had widespread consequences for all stakeholders, including second hand auto dealers who are now refraining from purchasing from the UK.

“At the moment we’ve stopped because there are regulations that if the car is older than three years we have to pay a duty tax and VAT,” Noel, from Noel Auto Dealer, told Lovin Malta. 

The regulations, implemented across the EU, state that importers will have to comply with different VAT rules and procedures in the EU and the UK.

For auto dealers who import second hand cars and sell them locally at a cheaper price, this is proving too costly to be profitable. 

“The VAT rate can go up between 18% to 25%,” Noel continues.

“In my opinion, it doesn’t become worth it. New cars are going to become cheaper and second hand cars are going to become more expensive,” he said.

The practice of purchasing second hand cars from the UK isn’t uncommon in Malta, nor is going to the UK to purchase a car and drive down.

However, Brexit has disrupted the industry completely with customs and bureaucracy becoming a major pain point.

“It seems that no one knows what the charges are when it comes to crossing,” Mario Galea from Mario Galea New & Second Hand Cars said.

“The most difficult thing is the quantity of paperwork it takes to cross the border. The system is too complicated and most transport companies are trying to negotiate the charges of crossing with UK haulers.”

“It used to be that you buy a car and drive it across the border. Things are too complicated now,” he ended.

With no clear indication of what paperwork they need and how much it will cost, many auto dealers have halted important second hand cars for the time being. As it stands, the situation has no silver living for Maltese auto dealers.

“I can’t put a price on the cars we import. It’s going to be a problem it’s going to be hard to sell,” Buġibba Auto Dealer said.

Tag someone who has been affected by Brexit

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