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Brussels, 4 April 2012
Making life easier for citizens when moving with their cars to another EU Member State
The diversity of rules and the various conflicting requirements for cars registered across the EU still constitute a considerable impediment for the cross border transfer of vehicles already registered in one Member State. These problems also represent a significant barrier for cross-border workers, citizens, car dealers, car-rental companies and all people who buy or sell a car in another EU country. As a consequence EU citizens are frequently faced with cumbersome registration formalities and paperwork when buying a car in another Member State or transferring it due to change of residence. These problems occur also in car rental business, when companies are trying to relocate their fleets from one Member State to another depending on seasonal variation in demand.
This press memo informs on:
1. Less paperwork and formalities when moving with a car
There are more than 300 million registered cars, buses, trucks and vans in Europe. Most of these will not be concerned by this proposal which concerns only the cars, buses, trucks and vans that frequently go across the borders within the EU. It is estimated that 3.5 million vehicles are transferred to another Member State per year.
The proposal introduces the principle that a car should be registered in the EU country where its owner lives, and that all other Member States may not ask her/him to register the car with them, even if the car owner spend a longer period there.
For companies, the same principle applies: the cars, buses, vans and trucks should be registered in the EU country where the main office is established.
A few examples:
The most important changes:
Car-rental companies will benefit from this proposal
Many Member States do not allow car-rental companies to hire out cars that are registered in another EU country. Therefore, if citizen rent a car and drive it to another country, it will be more expensive since car-rental companies will have to charge them the costs of repatriation of the car. Moreover, the cumbersome rules for the registration of cars coming from another Member State discourage car-rental companies to move a part of their fleet to tourist destinations during the high season so that the demand for rental cars is often higher than the available car-rental fleet. This proposal will allow car-rental companies to move their fleet more easily within the EU since the part of the rental cars that move to another EU country during the high season will not have to be registered there.
2. Current problems when registering a car in another EU Member State
EU citizens do complain
In the period 2000-2011, the Commission handled 114 official complaints about car registration problems while the Court of Justice delivered 17 judgments and orders about car registration. The SOLVIT annual report for 2010 indicates that cases concerning driving licences and vehicle registrations cumulatively account for 6% of the overall case load, with an increase of 5% compared to 2009. An analysis of questions and problems handled by Your Europe Advice (YEA, former Citizens Signpost Service) and SOLVIT in 2009 shows the following results:
The 651 citizens and 151 businesses responding to the public consultation in 2011 made it clear that problems caused by car registration have a negative impact on citizens and businesses. The most important results:
Does a registration abroad create problems?
According to the public consultation from 2011, re-registration of a vehicle posed problems for a significant majority of citizens, but also for many businesses:
Furthermore citizens and businesses were requested to specify the type of problems encountered:
Additional costs for car rental companies
There are specific impacts for car rental companies, such as the high costs of one-way rental associated to the costs of repatriation of the car. In most cases, companies decide not to re register the car in the country of destination because of excessive costs. Either they rent it to a client with the same nationality of the number plate of the vehicle or they drive it back. This cost is passed on to the final consumer through higher prices. Finally, companies face the constraint of not being able to meet peak seasonal demand due to the impossibility of easily moving fleet from one Member State to another.
Difficulties cause additional costs
According to the contributions received data, most additional costs are generated by requests to undergo additional checks and tests (83.2 % of citizens, 81.2 % of businesses), to translate documents (52.1 % of citizens, 50.0 % of businesses) and to contact the manufacturer for additional technical information (41.5% of citizens, 41.7% of businesses.
Contact with the registration authorities in another Member State
Three quarters of the public authorities say they contact the registration authorities in the Member State, where the motor vehicle was previously registered, in order to get information needed for re-registration. Moreover all respondents' confirm having problems when dealing with registration authorities:
Surprisingly as the main issue they point out difficulties to find the authority that is responsible in other jurisdiction:
Lack of administrative cooperation
National registration authorities complain about the difficulties that they are facing to contact their colleagues in other Member States. Almost 60% of the public authorities which participated in the public consultation are dissatisfied with the current system for the exchange of information between registration authorities.
3. Estimation of the costs of the current system
The duration of the process of de-registration is estimated to take an average of 1 week. For re-registration in another Member State, the process lasts on average 4 weeks. The total duration of the process is around 5 weeks. This has been estimated on the basis of data received in the public consultation and from interviews with Member States. For calculation purposes, the basic assumption is that 3.5 million vehicles are transferred to another Member State per year.
The unit cost of de-registration and re-registration procedures is estimated at €400 for citizens and for businesses and €29 for public authorities (this reflects the effective time devoted to this procedure as well as the fees paid). The total current annual administrative costs are estimated (on the basis of the Standard Costs model) at around EUR 1400 million for citizens and for businesses and EUR 100 million for public authorities, which totals around EUR 1500 million euro.
Additional costs for car rental companies
Additionally, there are specific impacts for car rental companies resulting from the nature of their business. One impact is the high costs of one-way rental associated to the costs of repatriation of the car. In most cases, companies decide not to register the car in the country of destination because of excessive costs. Either they rent it to a client with the same nationality of the number plate of the vehicle or they drive it back. This cost is passed on to the final consumer through higher prices. The overall cost of this amounts to EUR 418 million annually. There is also a loss of profits derived from lower demand due to the very high price of this service. This is estimated at EUR 202 million. Finally, companies face the constraint of not being able to meet peak seasonal demand due to the impossibility of easily moving fleet from one Member State to another. As a result, they suffer a loss of profits of around EUR 16 million annually.
The current procedures generate significant administrative and other costs for citizens, businesses and public authorities.
Other possible costs for private citizens (having to resort to other transport solutions or reduce their mobility) and for businesses (such as cost of having a larger fleet than otherwise needed in a given country or the depreciation of the vehicle) have not been quantitatively estimated. The number of vehicles is also a conservative estimation. Therefore, real costs could be higher.
Foreseen evolution of the problem
The percentage of citizens working in a different Member State than their Member State of origin has shown an increasing trend in the last few years amounting to around 6 million in 2010, which represents around 3% of total workers in the EU. The number of cross-border workers has increased 30% since 2005, reaching around 1 million in 2010. One can expect this trend to continue in coming years.
And also for further information see: The EU Citizenship Report