President of Ukraine Volodymyr Zelenskyy approved law, aimed at simplifying regulation and reducing the shadowing of the market for the sale of used cars. According to the law, the new rules exempt sellers of used vehicles and their components from having to re-register the cars themselves. The requirement to submit documents to the service centers of the Ministry of Internal Affairs with the marking of the relevant TCC has also been abolished.
According to the initiators of the legislative act, its adoption will contribute to the transparency of the market and the elimination of corruption schemes that previously led to underpayment of taxes to the budget. By the way, over 1.8 thousand new cars with gasoline engines were registered in Ukraine last month, which is a quarter less than in the same period of the previous year.
Why was it necessary to adopt this law? What problems on the used car market does the new law solve?
Therefore, the aforementioned law should facilitate the purchase and sale of used cars and make this market more transparent. Previously, the development of the field was hampered by many problems. Many transactions took place in the shadows, due to which the state did not receive taxes, and people faced complex procedures and corruption.
For example, sellers were forced to first re-register the car for themselves, and only then sell it on. It took time and money. In addition, it was necessary to collect many documents, in particular with the marks of various institutions, which complicated the process and created opportunities for abuse.
The new law simplifies all this. Now sellers do not need to re-register the car and submit unnecessary papers. This greatly facilitates transactions, saves time and minimizes the risk of corruption. Thanks to this, the state will be able to better control the market, and people will feel more confident when buying or selling cars.
It is expected that the new rules will bring the market out of the shadows, increase tax revenues to the budget and stimulate the development of the industry. Ultimately, this will make used cars more accessible to Ukrainians and help remove unnecessary obstacles to their sale. The law should be an important step towards simpler and more transparent rules of the game.
Expert opinion on the effectiveness of the law and possible risks
The new law received many positive expert reviews. Economists believe that due to the simplification of the rules, there will be more official deals on the market, which will have a positive effect on the state budget, because tax revenues will increase. Less red tape will also create a comfortable environment for buyers and sellers, which will help the car service business. At the same time, they warn that without proper controls there may be loopholes for shady schemes.
Lawyers, for their part, emphasize that the new rules reduce the risk of legal disputes that previously arose due to the difficulty of re-registration of cars. Eliminating redundant documents and procedures also reduces corruption risks. However, there is an important nuance – it is necessary to clearly organize the inspection of cars in order to exclude the sale of cars with forged documents or hidden problems.
Representatives of car dealerships also positively evaluate the law, because simplifying the rules will make the market more attractive for buyers. They note that this can significantly increase the number of transactions, but emphasize the importance of transparency and modernization of information exchange systems to reduce the risk of fraud and speed up the execution of transactions.
Experts also warn that without proper controls, there may be opportunities for abuse, such as tax evasion or the sale of problem cars. Therefore, it is important not only to simplify procedures, but also to ensure clear supervision of compliance with the new rules.
Car prices may also change slightly. Simplification of procedures will reduce costs for sellers, so the cost of cars for buyers may decrease slightly. At the same time, increased demand may slightly raise the prices of popular models, but increased competition in the market should keep them within reasonable limits.
Ukrainians mostly positively perceive the changes regarding the simplification of the sale of used cars. However, there are some concerns. Some sellers believe that new requirements, for example, confirmation of the real value of the car at the time of sale, may create difficulties. This is especially true for those who sell more than one car a year, as additional tax obligations can make their job more difficult.
Are there similar laws in other states and how have they affected the used car market there
The reform of the used car market in Ukraine has a lot in common with Western approaches. In Europe, for example, the sale of cars takes place with minimal bureaucracy. In Germany or France, transactions are completed very quickly: the seller hands over the documents to the new owner, and registration takes only a few hours. There are also public databases where you can check the history of the car, which makes the process transparent and safe. This strengthens trust between people and maintains market stability.
A similar system also operates in the USA. Simplified registration rules are complemented by special services that allow buyers to learn about the past of the car, its technical condition and accidents.
The importance of the simplicity of the rules is also demonstrated by the Polish experience. There, the seller and buyer conclude a contract, and the rest of the procedures are performed by the new owner. Thanks to this, Poland found itself in the mainstream of used car imports, which made cars more affordable for people.
At the same time, the Russian experience demonstrates what excessive bureaucracy and corruption lead to. Because of confusing rules and distrust of the system there, the market remained in the shadows for a long time. Even attempts to simplify procedures did not yield significant results due to weak control.
International experience shows that simplification of procedures, access to information about cars and market transparency always pay off. This stimulates official sales, reduces shadow schemes and increases tax revenues. In Ukraine, such changes can make the car market more accessible, fair and convenient for citizens, if the reform is implemented with effective control and modern technologies.
What difficulties may arise during the implementation of the law
Of course, the implementation of a new legal norm may face certain difficulties, which are important to take into account in order for it to work effectively. One of the main problems is ensuring market transparency. Simplifying procedures could open up opportunities for shady schemes, such as when sellers understate the value of cars on documents to reduce the tax burden. To avoid this, you need automated systems that will check whether the stated amount corresponds to the real market price.
It is also important to provide buyers with access to information about the vehicle’s history. Without this, there is a risk of fraud when cars are sold with hidden problems such as being involved in an accident, having liens or even being stolen. Transparent databases where you can quickly check the legal purity of the car will help to avoid such situations. In addition, effective implementation of the law requires modern electronic platforms. If the technical base is weak or cannot cope with a large volume of transactions, it can cause delays and inconvenience for users. It is important that data exchange systems between service centers, tax authorities and other institutions work quickly and reliably.
Another task is to inform citizens about the new rules. It will be difficult for many of our compatriots to understand how to draw up agreements correctly. Therefore, an active information campaign is needed, which will explain all the innovations in order to avoid misunderstandings and mistakes. If all these challenges are overcome, the new law can really make the used car market more transparent, convenient and accessible for all participants.
Tetyana Viktorova
