More new cars exempt from BPM

Last year, 206 thousand new passenger cars were sold which were exempt from BPM (tax on new passenger cars and motorcycles), i.e. more than 3.5 times as many as in 2009. Government revenues from BPM were reduced by 1.3 billion euro relative to 2008. In particular the number of diesel cars exempt from BPM has grown noticeably.

Booming sales new cars exempt from BPM

Nearly 556 thousand new passenger cars were sold last year, a 15 percent increase from 2010. The increase is entirely due to the sale of new cars exempt from BPM, which was up by nearly three quarters relative to 2010. At the same time, the sale of new cars without BPM exemption dropped by 4 percent.

Since the introduction of the BPM exemption policy for fuel-efficient cars on 1 January 2009, the popularity of this type of cars has soared. In 2009, 15 percent of new cars sold that year were exempt from BPM versus 37 percent in 2011.

Sales new passenger cars

BPM exemption policy affects government coffers

Due to the popularity of cars exempt from BPM, government revenues from BPM were reduced to 2 billion euro in 2011, nearly 40 percent down from 2008, the year prior to the introduction of the BPM exemption, when government revenues from BPM amounted to 3.2 billion euro. The number of new cars sold in the same period increased by more than one tenth.

The BPM exemption for fuel-efficient cars is part of the government policy to tax cars on the basis of the degree to which they harm the environment rather than on the basis of the purchase price. The decline in BPM revenues is partly offset by a higher road tax rate. From 1 July 2012 onwards, the CO2 limits regarding BPM exemption will be stricter.

BPM revenues and new car sales

Surge in diesel cars exempt from BPM

The number of new diesel cars qualifying for BPM exemption sold over the past three years has increased substantially. Nearly 70 thousand of these cars were sold last year, as against only 65 in 2009. As a result, more than one third of all cars sold last year that qualified for BPM exemption had diesel engines.

The majority (56 percent) of new cars sold last year with BPM exemption were still running on petrol. Nearly three quarters of cars with BPM exemption sold in 2009 were petrol cars.

Sales new cars exempt from BPM by type of fuel

Astrid Kampert and Arjan Neef, with the co-operation of Eric-Jan van der Berg (Dutch Bicycle and Automobile Association RAI)