Slump in car sales continues in September
Just like throughout the year, September saw far fewer new car sales than a year ago. The used car market also remains weak, with tax uncertainty deterring buyers.
According to the Association of Estonian Car Sales and Service Companies (AMTEL), 1,179 new passenger cars were sold in September, 45 percent fewer than in the same month last year.
"The start of the school year unfortunately didn't bring a recovery. The decline continued and largely comes down to people's uncertainty today. Given what's happening around us and the state of the economy, people don't want to take on major new commitments," Margus Nõmmik, board member of Toyota dealer Amserv Auto, told ERR.
The used car market hasn't fared any better. Rainer Uukkivi, CEO of Longo Group Estonia, said that while the summer months went slightly better, September again brought a general downturn.
At the end of August, coalition parties began discussing the possibility of scrapping the car tax. By the end of September, however, they concluded the state did not have the funds to eliminate it in the coming years. Uukkivi noted that the revived expectation of a tax cut certainly influenced sales.
"Some of our customers told us they would postpone buying a car because of the promise to scrap the tax. There's always a flood of promises before elections, which later get reversed," he said.
According to Uukkivi, the most popular cars at the moment are those priced between €10,000 and €15,000, while older models are also selling fairly well. Buyers are favoring more economical cars with lower registration and annual tax costs.
Nõmmik said the renewed debate around the car tax created an unpleasant situation: some customers held off in the hope the tax might be abolished, while others who had just purchased a car and paid the tax were left disappointed.
Neither dealer expects major changes in the last months of this year. Since last autumn saw a buying boom ahead of the tax's introduction, this year's sales figures cannot be compared with those of 2023. Still, Nõmmik said the past month suggested the situation may be stabilizing.
"We're looking ahead with optimism and waiting for the new year. Hopefully it will be better," Nõmmik said, adding that if people choose cars with reasonable specifications, the annual tax and registration fee won't be so high and buyers are gradually getting used to it.
"Especially when it comes to the car tax, no one has really ever opposed it in principle, as long as the purpose is right. People understand this tax exists everywhere else in the world. What causes confusion is the registration fee — how it is calculated and what it covers," he explained.
Uukkivi also believes people will adapt and that improvements may come next year. But he noted that October, November, December and January are traditionally slow sales months, so expectations should remain modest.
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Editor: Marcus Turovski
