Car insurance premium and VAT

[quyen]

I am due to renew my car insurance this week but was wondering if I would save anything if I wait until next week when VAT is cut to 15%. Of course I won't drive the car when it is not insured but, as it only a few days it's, no bother.

Does anyone know if the insurance premium will be affected by the VAT cut?

Thanks.

[Fatrat]

Motor insurance is not subject to VAT, but you do pay 5% Insurance Premium Tax (IPT) and the IPT rate is not being changed in the budget (but I'm sure that it will go up in due course along with all other taxes!!)

[NDA]

Good question - I've just renewed cars, houses and contents and could have saved nearly £200 on a massive premium.

[off_again]

Already answered, IPT is what is charged and its currently 5%. Then again, its only 2.5% so hardly going to make a big difference.

Now, someone I know happened to have bought a car last week, brand new - except this week its now 2.5% cheaper! Might only be 2p on a Mars bar, but its a couple of quid on a 14k motor! Couldn't happen to a nicer person...

[Shaw Tarse]

off_again said:

Already answered, IPT is what is charged and its currently 5%. Then again, its only 2.5% so hardly going to make a big difference.

Now, someone I know happened to have bought a car last week, brand new - except this week its now 2.5% cheaper! Might only be 2p on a Mars bar, but its a couple of quid on a 14k motor! Couldn't happen to a nicer person...

Not that much, according to Auntie Beeb, about £380 on a Mondeo.
Personally I'd want more of a discount than that, & will they pass the extra discount on?

[Fatrat]

I'm sure the IPT rate will rise (possibly quite savagely) when we have to start paying back all these loans and tax cuts. In addition, the Financial Ombudsman Compensation Scheme has been lent a shed load of money to pay back the balance to Icesave customers (and quite right too) but that money has to come from somewhere. At the moment all banks, insurers and members of the FOCS pay a levy to meet these claims but we live in uncertain times and that levy will increase in due course which means that we will all pay for Darlings spend,spend,spend policy.

Rant over,

As you were.

[quyen]

Thanks for the quick reply. No saving no me here then. Guess I better head down the shopping centre for some 2.5% savings.