Will Coronavirus hit used car prices?
Discussion
Roaringopenfire said:
In 2008 post financial crisis VAT was cut by 2.5% for six months. It was an automatic reduction on all goods/services bought within the period.
It didn't affect the used car market.? There's no VAT on a used car only the margin which the dealer determines so if there is a cut the customer won't see any decrease in prices especially now with there been a shortage of used stock.Mexman said:
354 pages of trying to answer the original question.
I have now found the definitive answer......
No.
End thread
Brilliant.I have now found the definitive answer......
No.
End thread
But for the moment I have to disagree
I think it's pushed them up slightly on the mid price range stuff
It'll be interesting to see what happens later in the year
Deep Thought said:
You distinctly - and repeatedly - said that when dealers opened up again dealers would immediately be begging customers to take cars off their hands at any price as they would need the revenue and that the customer would hold all the cards.
That didnt happen.
You were wrong.
End of.
There’s no ‘dealers begging customers to take cars off their hands at any price’ in my narrative. Your usual exaggeration. That didnt happen.
You were wrong.
End of.
Start to think longer term. It’s going to be a slow process to a low volume recession driven car market.
Trevor555 said:
Brilliant.
But for the moment I have to disagree
I think it's pushed them up slightly on the mid price range stuff
It'll be interesting to see what happens later in the year
The post furlough, higher unemployment, reduced consumer consumption and Govt clawback period is where the significant impact will be. Most people know it, they just feel uncomfortable admitting it.But for the moment I have to disagree
I think it's pushed them up slightly on the mid price range stuff
It'll be interesting to see what happens later in the year
Throttlebody said:
Trevor555 said:
Brilliant.
But for the moment I have to disagree
I think it's pushed them up slightly on the mid price range stuff
It'll be interesting to see what happens later in the year
The post furlough, higher unemployment, reduced consumer consumption and Govt clawback period is where the significant impact will be. Most people know it, they just feel uncomfortable admitting it.But for the moment I have to disagree
I think it's pushed them up slightly on the mid price range stuff
It'll be interesting to see what happens later in the year
Many on furlough will be made redundant at the end of the scheme.
And many business's will fail at the end of the scheme/governments aid.
Trevor555 said:
Yes, my thoughts also.
Many on furlough will be made redundant at the end of the scheme.
And many business's will fail at the end of the scheme/governments aid.
In the same way they tried to "flatten the curve" with COVID infections/deaths, I think that's all they've tried to do with company bankruptcies and redundancies. There are going to be loads of them, they've just tried to give hand outs in such a way that they don't all come at once.Many on furlough will be made redundant at the end of the scheme.
And many business's will fail at the end of the scheme/governments aid.
CRA1G said:
Trevor555 said:
I read today that the government may reduce VAT in the next few weeks.
So all the VAT qualifying cars/vans on dealer forecourts.
Will they reduce the prices in line with the lower VAT rate so the customer benefits?
Or will the end prices stay the same and the dealer benefits having to charge less VAT?
Anyone in the know?
Predictions?
Let's say a £40,000 VAT qualifying camper van, will the buyer save approx £3,000 by waiting a few weeks if they half the VAT?
There's no chance they'll half the VAT....if they do reduce it it'll be around 3%. Any thing that's advertised + VAT will directly benefit but other wise a I can't see any changes to the forecourt prices.So all the VAT qualifying cars/vans on dealer forecourts.
Will they reduce the prices in line with the lower VAT rate so the customer benefits?
Or will the end prices stay the same and the dealer benefits having to charge less VAT?
Anyone in the know?
Predictions?
Let's say a £40,000 VAT qualifying camper van, will the buyer save approx £3,000 by waiting a few weeks if they half the VAT?
Trevor555 said:
I read today that the government may reduce VAT in the next few weeks.
So all the VAT qualifying cars/vans on dealer forecourts.
Will they reduce the prices in line with the lower VAT rate so the customer benefits?
Or will the end prices stay the same and the dealer benefits having to charge less VAT?
Anyone in the know?
Predictions?
Let's say a £40,000 VAT qualifying camper van, will the buyer save approx £3,000 by waiting a few weeks if they half the VAT?
Until UK ends the transition period with the EU on Jan 01 2021, minimum VAT rate allowed is 15%So all the VAT qualifying cars/vans on dealer forecourts.
Will they reduce the prices in line with the lower VAT rate so the customer benefits?
Or will the end prices stay the same and the dealer benefits having to charge less VAT?
Anyone in the know?
Predictions?
Let's say a £40,000 VAT qualifying camper van, will the buyer save approx £3,000 by waiting a few weeks if they half the VAT?
Latest from the respected GfK consumer confidence index for June -
“Yes, we have seen queues as some shoppers return to battered high streets. But with economists warning that the post-lockdown upturn might not restore GDP to pre-Covid-19 levels, and with the labour market set for more job losses, we have to question whether we are seeing early signs of economic recovery or that infamous ‘dead cat bounce'. Most bets will be on the dead cat."
“Yes, we have seen queues as some shoppers return to battered high streets. But with economists warning that the post-lockdown upturn might not restore GDP to pre-Covid-19 levels, and with the labour market set for more job losses, we have to question whether we are seeing early signs of economic recovery or that infamous ‘dead cat bounce'. Most bets will be on the dead cat."
Deep Thought said:
Does a VAT reduction by say a few percent help stimulate recovery though, or does it just mean less tax revenue in (sure a bad thing for the government at the moment)?
Post transition period they could reduce VAT with no impact on treasury figures because payments to the EU end, some of which is VAT derived. If we have no FTA treasury will take more tax from import duties.
jammy-git said:
In the same way they tried to "flatten the curve" with COVID infections/deaths, I think that's all they've tried to do with company bankruptcies and redundancies. There are going to be loads of them, they've just tried to give hand outs in such a way that they don't all come at once.
Indeed the issue with bad financial news is, whether personal or business, it's nearly always covered up/hidden from everyone until it simply cannot be any longer. It's always good news/confidence talk until someone pulls the plug on further funding, there'll be a lot of finance directors, somewhere between being concerned about eating into cash reserves and knowing at this rate we're 'x' months from serious redundancy actions or worse. Employees in these companies will largely have no idea what part of that scale they're on, 100% no one will be broadcasting bad news until absolutely forced to.
So none of us know broadly where we are at yet, but it's hard to see a upside, and difficult to see a quick return to normality.....not saying it's impossible but the present state is being propped up for sure can businesses at least get back to supporting themselves properly, the extending of the furlough scheme suggests, not yet
Edited by Scootersp on Sunday 21st June 13:47
Throttlebody said:
Latest survey says over half of the UK won’t be doing any unnecessary shopping. A VAT cut won’t be a significant stimulus for the economy.
The IFS has just forecast the UK will need £30 billion in tax rises just to maintain fiscal integrity. Tough times ahead.
£30 billion is not that much in the large scheme of things, that's what our regime spent on the illegal war crime a that was the Iraq war and we didn't hear the regime tell us that our taxes have to rise to pay for that (or when they bailed the banks out with billions or when Teresa May gave the terrorist linked DUP billions to stay in power)? With the UK being 6th richest country in the world with a decent military I don't think £30 billion is a big problem, at worst we may have to hit Iran or Venezuela if things get really tough. If they extend the furlough scheme like they appear to be doing by asking businesses to pay 20% of their employees wages and taper it up slowly to preserve them whilst confidence/spending rises I think it should be OK, of course things won't be where they were pre-CV overnight but probably a lot of jobs can be saved and hence consumer spending can be maintained albeit at lower levels in the interim.The IFS has just forecast the UK will need £30 billion in tax rises just to maintain fiscal integrity. Tough times ahead.
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