After German Diesel Ban, Cheap Used Cars to Flood Croatia?

By 28 February 2018

German cities can now impose bans on acceptable levels of pollution, so older diesel engine cars might become less attractive, which means their price will go down.

The German Federal High Court in Leipzig made a long-awaited verdict yesterday that German cities and municipalities can ban older diesel cars because they exceed allowed values ​​for nitrogen dioxide emissions. Diesel cars are the leading producer of this dangerous gas, reports on February 28, 2018.

The federal court's second-instance decision was made based on an appeal against the decision of the provincial courts in Stuttgart and Düsseldorf last year about the ban on the use of cars with diesel engines and has legal effect throughout Germany. All vehicles that do not meet the latest Euro6 ecological standard could be affected, and in Germany, there are about 12 million such cars. The verdict also provides for a transitional period for Euro5 diesel engines, which cannot be barred before September 1, 2019.

Diesel engines manufactured before 2005 have already been virtually banned in Germany, and most such cars were destroyed because their owners had received substantial incentives for buying new vehicles, provided they demolished the old ones.

However, the same fate will probably not await cars with diesel engines with Euro4 and Euro5 environmental standards (produced from 2005 to 2015). Some of the solutions are software and hardware modifications to meet the latest ecological rules, but they are expensive – around 1,500 euro per car. It is more probable that those cars, which are much sought after in the eastern European markets, and also in Turkey and the Middle East, will end up at used car traders.

Diesel engine cars produced during this period are also very popular in Croatia. For example, 55,000 used cars were imported to Croatia last year, and 87% of them were cars with diesel engines, with most of them produced in Germany from 2005 to 2015. Since such vehicles will soon become unwelcome in Germany, their owners could decide to sell them, which would mean that their prices would fall, which would be an excellent news for many Croats planning to buy cheap diesel cars in Germany.

“It is realistic to expect price reductions and increased import of used cars from Germany. But, we should not expect a flood of such cars in Croatia. There are a lot of markets larger than ours which will also buy them, and our rules on excise duties are more restrictive, especially compared to non-EU countries,” said Agan Begić from Promotion Plus, an agency which systematically monitors the Croatian car market.

Damir Horvat, the owner of the Horvat Cars company which imports cars from Germany, does not expect dramatic price reductions. “If such provisions were adopted across the EU, there would likely be a big decline in prices, but there are many people who want to buy such cars, so the prices in Germany have not declined. We will see whether that will change after this verdict,” said Horvat.

Translated from