Estonia has become the junkyard of the European car market – too often do we see cars at the end of their rope the odometers of which have been tampered with soiling our market and polluting our environment, says Arno Sillat, head of the Estonian Vehicle Dealers and Services Association (AMTEL).
You say that Estonia is the junkyard of the European vehicles market. How come?
A junkyard is where you dump garbage.
It is not so much about the age of vehicles. You can have an old car that is still very good. The problem is that we often see vehicles brought to Estonia that are minutes away from becoming scrap metal. These wrecks are then jazzed up, their odometers tampered with, signs of accidents hidden and end up on sale again.
People who buy them usually aren’t specialists. When you ask them why they bought it, they usually say it was because the dealer seemed honest.
The import of old cars with tampered odometers creates another problem: it drives down the price of Auntie Sue’s car, after she has driven it for 15 years, taken good care of it and now wants to sell.
How many cars that could be classified as junk are brought to Estonia every year?
Estonia’s total import comes to roughly 50,000 cars. Half of them are new and half used. The average age of second hand cars is 8-10 years. I dare say half of these – 12,000, more or less – have been tampered with.
When it comes to cars that are over five years old, people should ask themselves why they were brought here in the first place. The ad says the car is from Germany. People say: ooh, a German car, that’s trustworthy. In truth, there is no reason to believe that. Germans don’t handle older cars there, people from other nationalities do, for whom cutting corners is more acceptable.
But for Germany, it solves environmental and pollution problems. They can send their old and dirty cars our way. We are happy to pick them up. At the same time, we have adopted the obligation of cutting our carbon footprint. There is a clear discrepancy here.
People can’t get enough of cheap imported cars. Tell the reader what price should make them cautious?
There is no such limit. I’ve seen a case in the consumer disputes committee where a used car cost €25,000 but started rattling even before it left the lot and never made it to its destination.
I would suggest people compare prices: how much does an identical car cost on European websites. Secondly, it always pays to take a critical look at the dealer, Google them. If they have been blacklisted, you would do well not to hope you are the one lucky customer who doesn’t get ripped off.
Another cynical business model is when dealers take faulty cars back but only return 90 percent of the sum to the client. The car is then put up for sale again to hook, line and sink another victim. Every such client brings the dealer a few hundred euros.
To what extent does this business of importing junk lower the price of Auntie Sue’s car?
Depends on the vehicle – two or three times, maybe more.
For example, Sue has driven her supermini for 100,000 kilometers over 15 years. The car would be worth around €5,000. Next, dealers bring a similar car from Belgium, the Netherlands or Germany that has done five times as many kilometers. They tamper with the odometer to show only half the actual mileage and put the car up for sale for €2,000. There is no way Auntie Sue can get €5,000 for her car now. She might be forced to drop the price to €2,500.
Such schemes hurt honest people who have taken good care of their cars.
Who are these dealers who swindle people? What are their names, where are they active?
We have not dealt with them at AMTEL.
One such place used to be the Kadaka Market in Tallinn. More recently, the consumer disputes committee has often ruled against Autojärelmaks24 in Kesk-Sõjamäe in Tallinn. There are others.
A company in Viljandi is found guilty all the time. People should avoid these places as chances of getting a good car there are slim.
What should Estonia and people do to stop this trend?
We should figure out a way to stop that junk on the border. If we have a bathtub full of water and more coming from the tap, running circles around the tub with towels is not enough. We should close the tap. But how to do that? It is very difficult.
Major European countries are interested in getting rid of their old cars. They get rid of their old junk, buy new and better ones and so forth. They are improving their fleet.
That cycle doesn’t work here. Estonia is the final destination. A person is glad they got a cheaper car. The money ends up in the pocket of European dealers without them creating any value added.
Free movement of goods means we cannot lay down additional taxes. But we could have more thorough checks.
Today, only documentation is looked at when a car is registered. We could look more closely at older cars and their history. Why not make registration a lot more expensive.
How much help are the consumer protection watchdog and the disputes committee?
Having a black list is one option. A normal dealer cares about their good name. At the same time, we have companies that do not care in the slightest. They keep creating new legal bodies and leaving their old problems behind. Consumer protection is weak in Estonia, but it frees the courts from having to hear petty disputes.
The state should intervene and introduce regulation. It is currently treating all dealers the same. All dealers can apply for a temporary license plate that allows cars to be driven before they are registered. Proper companies used it so clients can test-drive vehicles before buying them. But there are companies who systematically exploit this possibility.
On the other hand, we could curb the number of cars by introducing a vehicle tax. Politicians have returned to this idea time and again.
A vehicle tax would hit everyone the same – including Auntie Sue who bought a new car in Estonia and has taken good care of it. It would do nothing against swindlers. Honest people would also be punished.
What about a luxury car tax suggested by the social democrats?
Only around 50-60 luxury vehicles, such as the Mercedes S-Class or Audi A8, are sold in Estonia annually. Not enough for meaningful tax revenue.
Talking about more expensive cars, the question is where taxation should start. I find the biggest problem with social democracy is taking things away from people who have worked for them. A person has worked hard and can afford to buy a nicer car once they hit middle age. What are they guilty of? Why should they pay more? This is not something that can be done lightly.
It seems Estonians love cars. Why is that?
The first cars got here in the late 19th century. Estonians have always been drawn to mechanical things. It suits us. Secondly, we need to travel greater distances, have low population density. The car quickly took over from horses in Estonia. Despite all the restrictions, Estonia had the most cars per person in the Soviet Union.
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