Flipping cars, a hard lesson
Discussion
hopeydaze said:
I am curious about this. As. Chartered Accountant I like to think I understand VAT but not as it specifically relates to new cars.
Am I correct in thinking a registered dealer buys a new car, reclaims the VAT while it is in stock (friend drives the car) and then exports the car so that no VAT is payable on the sale to HMRC?
Also interested...Am I correct in thinking a registered dealer buys a new car, reclaims the VAT while it is in stock (friend drives the car) and then exports the car so that no VAT is payable on the sale to HMRC?
The only way I thought the VAT could be claimed back is if the car was purchased by a company (company car so would attract tax), or sold for export. Either way, doesn't sound legal in the way it's been done.
These are comments are interesting and fair.
The trader (who I once trusted, because he was a friend) - told me it was completely lawful to buy a car ex VAT as long as you are operating a business as a motor trader.
He explained: I could pay him for the car ex VAT. Then he would pay for the car from dealership for the full amount - including the VAT.
He said if I wanted to keep the car more than a just few months, I must pay him the VAT amount back.
My given options were:
1. He could sell the car for me within the UK for a small commission.
2. He could sell the car abroad for a small commission (potentially for more money) and he would claim the VAT back.
3. I could pay him the VAT amount - allowing me to sell it back to the dealership - or privately within the UK.
(To confirm; VAT was paid on this car.)
So, after 3 months and 4000 miles - I approached my dealership. They offered me £2K below list. So I spoke to my friend, and he offered me 2K over list.
Therefore I chose option 2 and stipulated (to which the trader gave me his word) that he would only sell it WITHIN the UK.
The problem was - he broke his word and sold it abroad. I guess he saw bigger pound signs, and thought no-one would be the wiser.
This action would "obviously" flag up at Porsche - which I knew, which I told him it would be, and something frankly I agree with.
I took it all on trust, and got my fingers burned.
The point of my post is to simply to say: "Don't try and be clever and get yourself in a similar position!"
The trader (who I once trusted, because he was a friend) - told me it was completely lawful to buy a car ex VAT as long as you are operating a business as a motor trader.
He explained: I could pay him for the car ex VAT. Then he would pay for the car from dealership for the full amount - including the VAT.
He said if I wanted to keep the car more than a just few months, I must pay him the VAT amount back.
My given options were:
1. He could sell the car for me within the UK for a small commission.
2. He could sell the car abroad for a small commission (potentially for more money) and he would claim the VAT back.
3. I could pay him the VAT amount - allowing me to sell it back to the dealership - or privately within the UK.
(To confirm; VAT was paid on this car.)
So, after 3 months and 4000 miles - I approached my dealership. They offered me £2K below list. So I spoke to my friend, and he offered me 2K over list.
Therefore I chose option 2 and stipulated (to which the trader gave me his word) that he would only sell it WITHIN the UK.
The problem was - he broke his word and sold it abroad. I guess he saw bigger pound signs, and thought no-one would be the wiser.
This action would "obviously" flag up at Porsche - which I knew, which I told him it would be, and something frankly I agree with.
I took it all on trust, and got my fingers burned.
The point of my post is to simply to say: "Don't try and be clever and get yourself in a similar position!"
How did you find out you were blacklisted out of interest?
I'm picturing you sat down in the dealership with the sales guy, him bringing up your customer record and sucking air through his teeth while the monitor displays a giant flashing red DENIED banner. I suspect the reality is somewhat different though.
I'm picturing you sat down in the dealership with the sales guy, him bringing up your customer record and sucking air through his teeth while the monitor displays a giant flashing red DENIED banner. I suspect the reality is somewhat different though.
I presume you mean you chose option 1?
notsomadmick said:
These are comments are interesting and fair.
The trader (who I once trusted, because he was a friend) - told me it was completely lawful to buy a car ex VAT as long as you are operating a business as a motor trader.
He explained: I could pay him for the car ex VAT. Then he would pay for the car from dealership for the full amount - including the VAT.
He said if I wanted to keep the car more than a just few months, I must pay him the VAT amount back.
My given options were:
1. He could sell the car for me within the UK for a small commission.
2. He could sell the car abroad for a small commission (potentially for more money) and he would claim the VAT back.
3. I could pay him the VAT amount - allowing me to sell it back to the dealership - or privately within the UK.
(To confirm; VAT was paid on this car.)
So, after 3 months and 4000 miles - I approached my dealership. They offered me £2K below list. So I spoke to my friend, and he offered me 2K over list.
Therefore I chose option 2 and stipulated (to which the trader gave me his word) that he would only sell it WITHIN the UK.
The problem was - he broke his word and sold it abroad. I guess he saw bigger pound signs, and thought no-one would be the wiser.
This action would "obviously" flag up at Porsche - which I knew, which I told him it would be, and something frankly I agree with.
I took it all on trust, and got my fingers burned.
The point of my post is to simply to say: "Don't try and be clever and get yourself in a similar position!"
The trader (who I once trusted, because he was a friend) - told me it was completely lawful to buy a car ex VAT as long as you are operating a business as a motor trader.
He explained: I could pay him for the car ex VAT. Then he would pay for the car from dealership for the full amount - including the VAT.
He said if I wanted to keep the car more than a just few months, I must pay him the VAT amount back.
My given options were:
1. He could sell the car for me within the UK for a small commission.
2. He could sell the car abroad for a small commission (potentially for more money) and he would claim the VAT back.
3. I could pay him the VAT amount - allowing me to sell it back to the dealership - or privately within the UK.
(To confirm; VAT was paid on this car.)
So, after 3 months and 4000 miles - I approached my dealership. They offered me £2K below list. So I spoke to my friend, and he offered me 2K over list.
Therefore I chose option 2 and stipulated (to which the trader gave me his word) that he would only sell it WITHIN the UK.
The problem was - he broke his word and sold it abroad. I guess he saw bigger pound signs, and thought no-one would be the wiser.
This action would "obviously" flag up at Porsche - which I knew, which I told him it would be, and something frankly I agree with.
I took it all on trust, and got my fingers burned.
The point of my post is to simply to say: "Don't try and be clever and get yourself in a similar position!"
What i really really dony understand is that this strategy by Porsche clearly works very well.
Why doesnt BMW or Merc try. BMW seem to use the M4 gts as a profit exercise. Why dont they make an M4 csl out of some exotics, price it reasonably though only to a lucky few and rinse repeat ever model cycle.
It would allow them to contine to milk the M brand lower down while getting the brand publicity that the GT cars give porsche.
Why doesnt BMW or Merc try. BMW seem to use the M4 gts as a profit exercise. Why dont they make an M4 csl out of some exotics, price it reasonably though only to a lucky few and rinse repeat ever model cycle.
It would allow them to contine to milk the M brand lower down while getting the brand publicity that the GT cars give porsche.
dvshannow said:
What i really really dony understand is that this strategy by Porsche clearly works very well.
Why doesnt BMW or Merc try.
Wouldn't work. Have you seen the depreciation on BMW i8? there was a 9 months waiting list back in 2013 at least, now the depreciation is nearly 50%...Why doesnt BMW or Merc try.
Brads67 said:
So you sold a car to someone, they then sold it abroad, and Porsche blacklist you ?? hahaha nice !
I`d tell them to stick it up their hoop and buy something else . t
ts.
No, reading the OP the friend/trader purchased the car from Porsche directly and subsequently exported for Profit. The transaction between the OP and the Trader is, I suppose, highly irrelevant (although possibly tax evasion). However, my assumption is the OPC has got wind of the car being exported, and knowing the link between the OP and the trader, then decided to black list them both as high risk.I`d tell them to stick it up their hoop and buy something else . t
ts.As much as it might seem unfair, I don't think they are been t
ts at all. This is nothing to do with GT cars, this is all to do with exports. Not that long ago vast numbers of Cayennes were being purchased form UK dealers and then subsequently exported for Profit. Great little business venture for those that cottoned on to it, but Porsche realised what was going on and put a ban on anyone perceived to be buying a car to then only be exported and sold.There is plenty of choice of older cars that won't lose massive money in depreciation but the show offs and speculators Keep this fuel for limited cars going. It's incredible how many merc and BMW limited editions there are now compared to 15 yrs ago !
Reality is almost all of these limited edition cars are doing under 5 k miles with 1 owner and under 2 years old. It's now getting silly but in il interest rates go up Thia merry go round will continue
I wish the market would buy for fun of driving it not telling the chaps in the pub you are special because you are on the list for a car no other Porsche drivers can buy
Reality is almost all of these limited edition cars are doing under 5 k miles with 1 owner and under 2 years old. It's now getting silly but in il interest rates go up Thia merry go round will continue
I wish the market would buy for fun of driving it not telling the chaps in the pub you are special because you are on the list for a car no other Porsche drivers can buy
Thanks for your advice. In fact as of only yesterday, I have just done exactly that.
I did my homework first, and discovered the trader had NOT exported the car.
My OPC had made an error somehow??? So with some convincing and finally a mutual understanding of where we were both coming from, I am now back on a short list.
Everything said, I have learned a big lesson. Bottom line: Driving GT cars means a lot to me - not making money from them.
I did my homework first, and discovered the trader had NOT exported the car.
My OPC had made an error somehow??? So with some convincing and finally a mutual understanding of where we were both coming from, I am now back on a short list.
Everything said, I have learned a big lesson. Bottom line: Driving GT cars means a lot to me - not making money from them.
notsomadmick said:
Thanks for your advice. In fact as of only yesterday, I have just done exactly that.
I did my homework first, and discovered the trader had NOT exported the car.
My OPC had made an error somehow??? So with some convincing and finally a mutual understanding of where we were both coming from, I am now back on a short list.
Everything said, I have learned a big lesson. Bottom line: Driving GT cars means a lot to me - not making money from them.
Good to hear! Cheers, F.I did my homework first, and discovered the trader had NOT exported the car.
My OPC had made an error somehow??? So with some convincing and finally a mutual understanding of where we were both coming from, I am now back on a short list.
Everything said, I have learned a big lesson. Bottom line: Driving GT cars means a lot to me - not making money from them.
Gassing Station | 911/Carrera GT | Top of Page | What's New | My Stuff