Not holding the money well

[marcusfordus]

I've had Sven for 2 months, done less than a thousand miles. I paid £18300 with the tow pack, and now it's valued at £15100, yikes some loss for the miles driven.

With a suprise house purchase looming I'm selling Sven so had to ask what it's worth :'(

Brilliant car though

[rockhopper]

Not quite sure what is happening,

But I tried to say

Contact James at Allams Skoda.

[gadgetman]

Sadly that's what happens when you buy a new car and sell soon after.

[The Plumber]

Also depends which model and engine you have :wonder:

TP

[Norry]

I've had Sven for 2 months, done less than a thousand miles. I paid £18300 with the tow pack, and now it's valued at £15100, yikes some loss for the miles driven.

With a suprise house purchase looming I'm selling Sven so had to ask what it's worth :'(

Brilliant car though

Well I've looked at the dealers around here (Lothians) and they want the same price for a used car as a new one because you can't get the new ones.

Edited 7 November, 2011 by Norry

[Norry]

Sorry!

Edited 7 November, 2011 by Norry

[BossFox]

Our Yeti was about £16.5k and at 18 months old we've been given a trade in figure of £13k. Which I was happy with.

So far they are holding the money well...

But as said above buying new and selling right after will always cost you.

The dealer won't tie up their funds in your car and sell it on for nothing, they probably be looking to earn a thousand or two out of it. They are running a business after all.

If you want more for it you'll need to sell it privately.

Which some people feel a bit uncomfortable doing on a car of that value.

[hertsnminds]

I paid £18300 with the tow pack, and now it's valued at £15100

You need to consider VAT, a dealer adds 20% to any car they sell so if they have a car valued at £15,100 they must add VAT and sell it for £18120. The value of the car when you paid £18,300 was only £15,250 so it has actually lost £150 in value.

[BossFox]

You need to consider VAT, a dealer adds 20% to any car they sell so if they have a car valued at £15,100 they must add VAT and sell it for £18120. The value of the car when you paid £18,300 was only £15,250 so it has actually lost £150 in value.

Some people do have this idea that you lose the VAT as soon as you drive off, but that's not true. Yes, you do lose money but it doesn't relate to the VAT directly.

Otherwise ex-demo models would always be 20%+ cheaper as they are already registered and 2nd hand compared to new... and a check of used Yeti prices shows thats not true.

[ejstubbs]

Do dealers have to charge VAT on used vehicles?

I once asked a dealer for a price on a courtesy car they had loaned me while mine was in for a service. The figure they suggested was only about £1K off list price new! And this wasn't a model in short supply. I could have negotiated them down but from that starting point it wasn't worth the effort. The only way I could understand it was if they had to charge VAT.

[BossFox]

Do dealers have to charge VAT on used vehicles?

There is no VAT on used cars. Only new.

They are worth what they are worth... which if they are quite new could be more than new technically, because new cars have the VAT on top. But it's not 10k+VAT for a new car because you can't reclaim it. It's just 12k.

But because a lot of cars lose a fair percentage of value as soon as it's registered and driven people relate that figure to the VAT that's included and can't be seperated.

If you could reclaim the VAT garages would order the cars in at 10k+VAT each, register them and claim back the VAT before selling them off at £11k and be earning an extra £1000 on each one while still charging £1000 less than the new price!

['daiking']

A used car dealer explained it to me once, isn't there VAT on the difference of their book prices rather than the whole selling price?

[BossFox]

A used car dealer explained it to me once, isn't there VAT on the difference of their book prices rather than the whole selling price?

I believe so, yes. Something like VAT on what they make.

[wakev]

I believe so, yes. Something like VAT on what they make.

My dealer is not going to make a lot on my 1.2 I traded in for my 110.

I payed 16k for it then at 11 months old and 13k on the clock got a part x of 15k fixed until my new one arrive, the 1.2 is now on the forecourt for £14995, started at £16995 then £15450 now down to that 5 months later

[devonutopia]

I believe so, yes. Something like VAT on what they make.

Its the VAT margin scheme. Couple of garage accounts I have done use it. Basically means you make a profit, say £1,000 for simplicity and that profit is deemed to include VAT, so at 20% that equates to £166.67 of VAT you have to pay to the gov't coffers. You'll be surprised how many still **** it up though. Last time I had to do a whole sale VS bought reconciliation for one garage which simply couldn't get it right on every single transaction. Keeps me in work I guess.

[hertsnminds]

Here is the HMRC page explaining VAT on car sales (new and used) http://www.hmrc.gov.uk/vat/sectors/motors/selling-cars.htm

If you're a motor dealer it can be difficult to establish the correct VAT position when you sell a new vehicle. Transactions can be complicated because the vehicle manufacturer might require you to offer special promotions like:

cashback deals

discounts

extras included in the sale price - some might be at the reduced rate of VAT or outside the scope of VAT altogether

The VAT position when you sell a used vehicle is also affected by several factors - most importantly whether or not you paid VAT when you bought the car.

Because the position can be complex it's very important to be aware of and to follow the VAT rules.

As others have said a new car has VAT charged on it so the value of a car you paid £18,300 was only £15,250

An ex demo car is sold as used so even if the dealer paid £15,250 they only pay VAT on the "margin" difference between buying and selling price

From the web page it sounds like a minefield especially when you take into account accessories and special offers.

Edited 8 November, 2011 by hertsnminds

[dibujo]

If the dealer pays £15100 for the car and sells it for £17100 he only pays vat on £2000 - not the full value of the car.

[My_Yeti]

Its kind of inevitable that cars lose value - it does sound painful but as stated above, dealers have to make a living. Try selling it privately, it has factory warranty so should not be a problem, however it might be difficult for someone to come and buy it with, lets say, 16k of cash.

[Gilesmengland]

it might be difficult for someone to come and buy it with, lets say, 16k of cash.

Really ?

I get almost daily offers from nice gentlemen and ladies in Nigeria to whom such piddling amounts are a mere bagatelle.

They just need help to move it out of the country.