Buying a new "used" car.... Car taxes?
Discussion
Parents are after a new car. They are looking at a Lexus NX300h and the dealer had down on the quote something like £6000 car tax?
He says as you'll be the first owner you pay this tax. But not sure how that works? It's got 12k miles on it and it must have been registered to someone? Surely the first owner paid that?
It was owned by the Lexus dealer. The regional manager had it as his chariot and put 12k on it in 6 months ish.
Is that right? And how does the "road" tax work? I gather it's gonna be around £140 a year but an extra £310 per year for 5 years (from when it was new, so I guess 4 years?).
If anyone can clear that up that'd be very helpful!
He says as you'll be the first owner you pay this tax. But not sure how that works? It's got 12k miles on it and it must have been registered to someone? Surely the first owner paid that?
It was owned by the Lexus dealer. The regional manager had it as his chariot and put 12k on it in 6 months ish.
Is that right? And how does the "road" tax work? I gather it's gonna be around £140 a year but an extra £310 per year for 5 years (from when it was new, so I guess 4 years?).
If anyone can clear that up that'd be very helpful!
Otispunkmeyer said:
Parents are after a new car. They are looking at a Lexus NX300h and the dealer had down on the quote something like £6000 car tax?
He says as you'll be the first owner you pay this tax. But not sure how that works? It's got 12k miles on it and it must have been registered to someone? Surely the first owner paid that?
Dealer trying it on or just plain stupid?He says as you'll be the first owner you pay this tax. But not sure how that works? It's got 12k miles on it and it must have been registered to someone? Surely the first owner paid that?
So this was a car in the used section and the dealer claims it's an ex demo car. Though I think 12k is a bit much for ex demo? So dealer claims there is tax of 6600 to pay (presumably VAT? But I'm not sure, my dad can't find the quote now) as they will be the first owners .
Now I dunno how it works with these things. It's bargain buckets for me!
Now I dunno how it works with these things. It's bargain buckets for me!
Butter Face said:
Need to see the quote to fully understand what they’re getting at. Sounds odd though.
But you’re right about the RFL, £140 per year + £310 per year for the first 5 if the car lists over £40k inc options.
It's an 18 plate NX300h premium so I think close to 50k list? They understand that part ok.But you’re right about the RFL, £140 per year + £310 per year for the first 5 if the car lists over £40k inc options.
I can't think what other tax it can be. It must be VAT at that amount. Reading around it seems there are two ways of charging VAT on a used car: they either do it by profit margin or by total value of the vehicle. The latter being the easiest to administer. So I guess it's legit?
I might be wrong but if the car is an ex demo sometimes the new owner can claim the VAT back if they are VAT registered and it is used for business.
When I bought my last 3 cars as ex demos they were all sold plus VAT which if I had been VAT registered I could have claimed back.
I could be talking a load of b
ks though.
Edited to add if I am so are the two posters above me, none of which I saw before I first posted
When I bought my last 3 cars as ex demos they were all sold plus VAT which if I had been VAT registered I could have claimed back.
I could be talking a load of b
ks though.Edited to add if I am so are the two posters above me, none of which I saw before I first posted
spookly said:
As a consumer.... why would you care? As long as the total price is acceptable then buy it.
If you pay VAT on purchase, which you almost always will from a dealer, then it is also refundable if the worst came to the worst and you had to return it.
Meh was just questioning it because I've never come across it before. We've only ever bought one newish car (year old) and never seen 20% VAT on there. I guess that they just used the second hand margin method. Seems that or just going for full 20% VAT are both plausible and they use what ever suits. If you pay VAT on purchase, which you almost always will from a dealer, then it is also refundable if the worst came to the worst and you had to return it.
If that's the case, that's absolutely fine! It's just something that sounded a little odd. But turns out, it isn't.
If I understand it right, if a dealer bought a car at auction and then sold it for 1000 profit. They'd use that second hand margin method. As this car hasn't been bought that way, it was new stock commandeered as a demo/company use car then perhaps they have to use the full 20% method? (Just trying to understand why there are two VAT options and why/when they get used).
Edited by Otispunkmeyer on Sunday 23 December 19:28
https://www.pistonheads.com/gassing/topic.asp?h=0&...
That pH thread from 2012 explains it I think. The difference between using the two methods is if the car was originally used where they claimed the VAT back. Which they will have with it being a company vehicle. If it's just bought from auction as a used car, it's had an official private owner, who paid vat the first time round and so they just pay vat on the profit (but it's rolled into the price anyway and the punter doesn't see it).
Makes sense
That pH thread from 2012 explains it I think. The difference between using the two methods is if the car was originally used where they claimed the VAT back. Which they will have with it being a company vehicle. If it's just bought from auction as a used car, it's had an official private owner, who paid vat the first time round and so they just pay vat on the profit (but it's rolled into the price anyway and the punter doesn't see it).
Makes sense
Think again on the car tax.
Its 5 years AFTER the first renewal.
So probably in your case, you (they) would be paying another 5 x £310 or whatever it goes up to in subsequent budgets.
The only way to "gain" a little is with a new car - cash in the tax after month one, then immediately re tax it. You then gain 11 months after year 5 if you still have the car.
I cannot understand why the dealer says you would be the first owner. If so, you would be the first name on the V5 and could gain from the tax thing. Unless they have been running it round on trade plates for 12 months - something the DVSA may have issue with - the dealership would be named on the V5 as keeper, so you wouldn't be first owner.
The dealer is either telling lies, being underhand or spinning a line. Or, heaven forbid, the sales person has not a clue what he/she is talking about. Either way would make me walk away.
Its 5 years AFTER the first renewal.
So probably in your case, you (they) would be paying another 5 x £310 or whatever it goes up to in subsequent budgets.
The only way to "gain" a little is with a new car - cash in the tax after month one, then immediately re tax it. You then gain 11 months after year 5 if you still have the car.
I cannot understand why the dealer says you would be the first owner. If so, you would be the first name on the V5 and could gain from the tax thing. Unless they have been running it round on trade plates for 12 months - something the DVSA may have issue with - the dealership would be named on the V5 as keeper, so you wouldn't be first owner.
The dealer is either telling lies, being underhand or spinning a line. Or, heaven forbid, the sales person has not a clue what he/she is talking about. Either way would make me walk away.
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