Auctioned luxury car prices included CIF

It may have whipped up some Lm600,000 for L-Istrina but basic calculations show that last Sunday's auction of CHOGM cars was not a charity deal for carmakers BMW.

The company still netted a profit from the deal just as it would have done normally, The Times has learnt.

In the process, the government waived about Lm1 million worth of registration tax, according to an estimate by the Car Importers Association Malta.

When the CHOGM organisers announced that the cars used by the heads of state and of government would be auctioned at cost price plus a Lm5,000 retainer for L-Istrina, what they meant was the wholesale price or what each car costs the local dealer.

The local BMW dealers, Muscat's Motors, did not make any profit but the cars were not sold at factory prices. They were sold at what is known in the industry as cost, insurance and freight (CIF).

The CHOGM task force confirmed this to The Times when contacted. The task force explained that before the auction they made sure the price at which the cars were being sold was consistent with what was previously declared by Muscat's Motors as its CIF price.

This means BMW could basically charged the regular wholesale price. Contacted for comments, BMW Malta representative Lennard Pal said he would rather not comment on the matter.

The cars used for the CHOGM summit underwent special security checks. This, The Times was told by industry sources, would render the vehicles more expensive.

The sponsorship deal by BMW included seven highly armoured BMWs (which were not auctioned), the loan of which was not publicised for security reasons.

The auction had nothing to do with the sponsorship deal itself and this was confirmed by the CHOGM task force. Spokesman Alan Camilleri said the auction deal, dubbed Driving Home for Charity, came after the deal had been struck and was intended purely as a transparent opportunity to raise money for L-Istrina and give people the opportunity to own a luxury car in the process.

Contacts by The Times indicate that the price tag on the auctioned cars compared to the retail price in the UK, including registration tax and the dealer's profit.

Thanks to the internet, The Times compared prices of BMW models with specifications similar to the auctioned cars and also obtained quotations on two models with the exact specifications as those on auction from two different dealers in London.

A BMW 525D, with the same specifications as one of the 19 models which were auctioned at an asking price of Lm26,000, was quoted to The Times by a London dealer at £35,914, on the road, which roughly equates to about Lm22,800.

If the Lm5,000 fixed retainer for L-Istrina is subtracted, the auction price would stand at about Lm1,800 below the UK price despite the fact that the price quoted was retail and included both UK registration and the dealer's profit.

Both the UK and the auction price included VAT.

An X5 3.0D model on the other hand, with the same specifications as the car auctioned was quoted at £44,410 (about Lm28,280) by another dealer, Lm310 less than the Lm28,590 asking price at the auction, but Lm4,690 more when one removes L-Istrina retainer. Again, the UK price includes the registration tax and the dealer's profit, which the auction price did not.