Aston Martin declining sales

[cardigankid]

Whatever anyone says and whatever the level of sales is, anyone who can afford an Aston and would enjoy it, should buy one. Learn from history. In 1971 they struggled to sell DB6 Mk.II's, (which were perceived as old hat). All the same things were being said as some misguidedly say today. But buying a car was not a mistake, despite all the financial problems and disasters which were just around the corner for the company. Anyone who bought a Mk.II Volante in 1971, in the face of conventional wisdom to the contrary, and kept it, has a car worth over a million quid today.

The market is different, and much bigger, but the fundamentals are the same. It is wise to own an Aston if you are in a position to do so.

[Derek 111S]

I'm doing my bit to keep things moving along. I picked up a new Vantage in January, and am replacing it next week with another new one, this time in Cobalt Blue.

Many thanks to Rodger And the team at AM Edinburgh for (another) great deal, although Im fairly sure I won't be back for a change again in a further 9 weeks time.

[Jon39]

cardigankid

Here is a remarkable car.
90,000 miles (7,000 in the last 30 years)
https://www.bonhams.com/auctions/21900/lot/242/

Derek

You are the second recent forum contributor, changing from one new Vantage to another, after just a few weeks/months.
Reminds me of the old saying, "Well the ashtray was full".
Jonby will be mystified, because he reckons rapid changing is no longer possible.
As you say, all good for AML.

[cardigankid]

Stunning.

I said £1.0m, it seems £0.75m is the current mark, but it's only a matter of time.

[downr]

It has the slush-matic transmission. That takes quite a bit off the value

[cardigankid]

I'm sure you are right, though personally I wouldn't care, it is not going to beat a GT3RS in a drag race whatever. And you can always get AM Works where it was built to install a manual box.

[jhoneyball]

jonby said:

I just received an email from McLaren today regarding a November 2014 650S Spider, 230 miles on the clock, list price £240k, asking price £199k - my initial reaction is not that there is a £40k saving and instead, concern that it will continue to depreciate hugely.

Edited by jonby on Tuesday 24th March 16:58

So thats the VAT part then which the first owner helpfully paid - 40k vat on a 200k car. Now the car is used, and its... 200k.

[jonby]

jhoneyball said:

jonby said:

I just received an email from McLaren today regarding a November 2014 650S Spider, 230 miles on the clock, list price £240k, asking price £199k - my initial reaction is not that there is a £40k saving and instead, concern that it will continue to depreciate hugely.

Edited by jonby on Tuesday 24th March 16:58

So thats the VAT part then which the first owner helpfully paid - 40k vat on a 200k car. Now the car is used, and its... 200k.

errr......no.

The VAT is utterly irrelevant

Put simply, in this instance, if they are asking 200, which one assumes is open to at least some negotiation, it's because that's what they think the market can stand. They will presumably have paid say 170-180ish, based on that i.e. based on what they think they can sell it for - it really is the only factor that counts. The would pay more than list for a used car if they can still make a profit at that level and they will only pay 50% of list if they think putting a little on top of that as their margin is as much as they can sell it for

The first owner didn't 'helpfully pay the VAT'. The first owner helpfully took a big slug of depreciation by paying a premium for the privilege of having a brand new car which looks unlikely to rise in value in the short or medium term.

[Jon39]

Jonby,

I seem to recall that used cars are not exempt from VAT.

Is it the case that dealers have to do something called VAT input and output, where effectively VAT becomes due on the difference between purchase and sale price.
If so, purchasers are paying VAT, but perhaps without realising. Rather like petrol, where we are buying tax, plus a small portion of fuel.

Edited by Jon39 on Friday 3rd April 15:54

[jonby]

Jon39 said:

Jonby,

I seem to recall that used cars are not exempt from VAT.

Is it the case that dealers have to do something called VAT input and output, where effectively VAT becomes due on the difference between purchase and sale price.
If so, purchasers are paying VAT, but perhaps without realising. Rather like petrol, where we are buying tax, plus a small portion of fuel.

Edited by Jon39 on Friday 3rd April 15:54

Other than the vat qualifying vehicles which are a tiny minority of overall car sales, used cars are not subject to vat

There is the vat margin scheme, which is what you describe above, except that rather than HMRC stating vat is due on say £12,000 if that;s the profit the dealer makes on a sale (which would be £2,400 on top of 12k in this example), HMRC would view the £12k profit as being inclusive of VAT, i.e. £10k plus VAT. I'm being pedantic and you may realise that anyway of course.

But in the example you give of fuel, the majority of the price you pay is tax, as you suggest. In the instance of a used car dealer, if they make say 10-15% margin then VAT only accounts for 2-3% of the overall purchase price. On lower value cars where the margin tends to be at a higher percentage, you are still unlikely to be paying more than 4-5% of the overall purchase price in VAT

But the crucial issue here is that the market sets the selling price and the trader doesn't pay VAT on the purchase of the car. If the trader is not vat registered, either because turnover is too low or because they are a private individual, the buyer still pays the same price - the margin scheme simply affects whether or not the seller has to pay vat from within their profit. So again, the vat has effectively nothing to do with setting the selling price that the buyer pays and the buyer can't claim any element of VAT back

I think one of the reasons the system is as it is, derives from the fact that a huge percentage of used cars are sold by private individuals who are not vat registered and therefore can't charge vat, just as a huge number of buyers of second hand cars aren't vat registered as again, they are private individuals so can't claim vat back. If the trade had to charge vat on car sales, it would lead to an unworkable marketplace