I hope the OP doesn't have a tuning box fitted! The thread will go in to melt down! :-)

Clearly the dealer won't pay you £24k but if for whatever reason you did need to get shot of the car immediately AND the dealer had someone else they could sell the car to there is nothing to stop them buying it for £23k and selling it for £23.5k... then they have the profit from the first sale and another £500 from the second....

 

If you are thinking about the dealer you just purchased it from, then there is something stopping him purchasing it back for 23k. The dealer would actually be better off not taking the car back.

Remember 4k of what he sold you the car for, has gone to the government. So if he buys your car back for 23k, he has just lost 3k on the sale of the car to you. The dealer would now need to sell the car on for 26k just to break even. Well nobody is going to buy a 2nd hand Skoda for more than a 1st hand Skoda. If the dealer sells the car on straight away for 23.5k, he has still lost 2.5k.

 

Now you could say go and take it to another dealer. But they arent going to give you 23k for the car. They dont want to pay 23k for a 20k asset. Their books would look extremely bad if they kept doing that.

 

So, when it comes to selling on the car, VAT does matter if selling it to a dealer. It wouldnt matter if selling it privately, but you would still never find a private individual to pay more than 20k for it, as they could find a similar car at a dealers for less.

So, the world isn't flat, interesting concept.

If you are thinking about the dealer you just purchased it from, then there is something stopping him purchasing it back for 23k. The dealer would actually be better off not taking the car back.

Remember 4k of what he sold you the car for, has gone to the government. So if he buys your car back for 23k, he has just lost 3k on the sale of the car to you. The dealer would now need to sell the car on for 26k just to break even. Well nobody is going to buy a 2nd hand Skoda for more than a 1st hand Skoda. If the dealer sells the car on straight away for 23.5k, he has still lost 2.5k.

 

Now you could say go and take it to another dealer. But they arent going to give you 23k for the car. They dont want to pay 23k for a 20k asset. Their books would look extremely bad if they kept doing that.

 

So, when it comes to selling on the car, VAT does matter if selling it to a dealer. It wouldnt matter if selling it privately, but you would still never find a private individual to pay more than 20k for it, as they could find a similar car at a dealers for less.

James - this has nothing to do with the VAT. It has everything to do whether this is good value/worth it for the dealer or not

If they have confidence that they can buy at a price and sell on at a profit they will. Hence why some used cars in high demand will be bought and sold on at or near new price or even at a premium.

If a car dealer decides to pay £23k for a car, that would be the asset value, not £20k as you state.

Well this has confused the hell out of me. However what I can work out is that if I get rid at the moment. I'm gonna have my pants pulled down. Despite that I've still got an itch that needs scratching so I'm going to have to think if something.

This however. Brilliant....

Boycie

 

Nearly new member

 

Selling a nearly new car

 

Free advertising

 

 

 

Would you Adam and Eve it?

 

 

Well this has confused the hell out of me. However what I can work out is that if I get rid at the moment. I'm gonna have my pants pulled down. Despite that I've still got an itch that needs scratching so I'm going to have to think if something.

 

Heh heh… bet you wish you'd never asked!  … welcome to the wonderful world of car forums.

 

You only asked a question… just wait 'til you express an opinion!

James - this has nothing to do with the VAT. It has everything to do whether this is good value/worth it for the dealer or not

If they have confidence that they can buy at a price and sell on at a profit they will. Hence why some used cars in high demand will be bought and sold on at or near new price or even at a premium.

If a car dealer decides to pay £23k for a car, that would be the asset value, not £20k as you state.

It does have everything to do with VAT. 4k of the 24k does not go to the dealer. Therefore they will not purchase it for 23k as that'll leave them with a loss. All down to the 4k VAT.

It does have everything to do with VAT. 4k of the 24k does not go to the dealer. Therefore they will not purchase it for 23k as that'll leave them with a loss. All down to the 4k VAT.

What? 

 

Sorry but they have already made their profit on the first sale...if they were to buy it back for £23k then assuming they can resell it for £23.5k they make another £500 profit...

I give up...

It does have everything to do with VAT. 4k of the 24k does not go to the dealer. Therefore they will not purchase it for 23k as that'll leave them with a loss. All down to the 4k VAT.

Ok, let's make this really simple for you. Assume for this example that the cheapest price you can buy a VRS hatch in UK is £24K on the road. Let's also assume that there's a 9 month waiting list.

Bob has a 3 month old VRS hatch, but wants an estate so decides to buy dealers ex demonstrator estate. The dealer offers Bob £21K for his VRS hatch and he accepts.

Paul can't wait 9 months for a new VRS and Bob's hatch is just the same colour and spec he would have ordered so he buys it off the dealer for £23K.

So Bob has lost £3K on his hatch, but he has the estate he wanted.

Paul has the VRS he wanted without the long wait, albeit 3 months old, but £1K less than the cheapest he'd seen them new.

Dealer made a profit on selling new hatch and a new estate to Bob

Dealer also made a £2K profit on selling the used hatch to Paul.

Get it now?

This makes watching paint dry seem oh so attractive

This makes watching paint dry seem oh so attractive

http://youtu.be/gVZr3WbMQ6w

There you are Bry! Happy viewing!

Can you claim the back VAT back though..?

There are no VAT implications when a private individual sells or part exchanges a car. Used cars come under the second hand goods scheme for VAT purposes which means when the dealer sells the car on they only pay over the VAT on the profit they have made on the sale. A simple example would be a dealer takes a car at a cost of £20,000 no VAT is paid over to HMRC say they then sell it for £21,200 the VAT the dealer gives to HMRC on the sale is £200.

Gross profit is £1200

Net profit is £1000

VAT is £200

I am an accountant and have had extensive dealings with clients in the motor trade for over 20 years hope this clears it up.

Meanwhile, back on Earth, the paint has dried and people still pay 20% vat when they buy a new car. (which the government refuse to refund if the dealer buys the car straight back.....)

ps thanks Leighg

Edited 13 July, 201411 yr by classic

Nope, still prefer watching the paint

In NZ we have 15% gst instead of 20% vat - could you please all start again and state your arguments taking this into account so I can understand 

 

This reminds me of a semi-drunken "discussion" I had with a friend once; he tried to convince me that sticking to one set of Lotto numbers each week (as opposed to random selection) increased your chances of winning. Literally hours of frustrating fun.

In NZ we have 15% gst instead of 20% vat - could you please all start again and state your arguments taking this into account so I can understand 

 

No.  Work it out yourself!

 

This reminds me of a semi-drunken "discussion" I had with a friend once; he tried to convince me that sticking to one set of Lotto numbers each week (as opposed to random selection) increased your chances of winning. Literally hours of frustrating fun.

 

I'm pretty sure I saw a statistic somewhere about the National Lottery here in Blighty which said more people had won it on 'lucky dip' rows (i.e. the computer selects 6 random numbers for you) than those who had selected their own numbers.  But now we're just getting off-topic a bit.  :p

But now we're just getting off-topic a bit.  :p

 

Not such a bad thing the way this thread's heading...

Anyway

 

No need to worry, folks.  The OP is welcome to sell his car for an inflated price if he wants.  

 

Whether any of those in the market will buy into his accounting s a different matter.

It's worth what someone else will pay for it.

 

The End. 

It's worth what someone else will pay for it.

 

The End. 

 

 

Exactly and i made him an offer earlier in the thread ha ha

Anyway

 

No need to worry, folks.  The OP is welcome to sell his car for an inflated price if he wants.  

 

Whether any of those in the market will buy into his accounting s a different matter.

Errr when did I mention a price. Let alone an inflated one. I was trying to get some ideas of what it would be worth. Which I would hope is slightly more than the £12k we buy any car offer.....

Boycie999

 

Apologies!!!

 

I wrongly blamed you for the idiocy about VAT that was nothing to do with you.  

 

My other pejorative post was also wrongly aimed at you.  Sorry

 

(Corrected typing error)

Edited 15 July, 201411 yr by normanLinux

Which I would hope is slightly more than the £12k we buy any car offer.....

 

Wow, I would expect a significant hit, but that's just daft. I think that's a "We don't actually want your car" quote.

 

Mind you, I bought my 1.4TSi Elegance 1 year old (from a proper Skoda franchise) for 33% off the list price, so the dealer wouldn't have paid more than 50% for it I guess (if indeed he did buy it, it may have been leased?). I recommend that you keep it for 10 years / 150k miles, whichever comes first!

Errr when did I mention a price. Let alone an inflated one. I was trying to get some ideas of what it would be worth. Which I would hope is slightly more than the £12k we buy any car offer.....

 

 

Does not compute !we buy any car quotes almost 14k for my 2013 mk2 estate manual tdi with 12000 miles! Why would a newer car be so much lower?