RE: Used Car Values Could Lose £2bn
Thursday 29th May 2008
The value of second-hand cars could drop by £2 billion this year because of a downturn in spending.
Used Car Values Could Lose £2bn
Economic downturn means less money to spend on second-hand cars
It is feared that the rising costs of mortgages, fuel and food could slash the amount of money spent on used cars.
This will not be helped by proposed car tax reforms, it is said.
Figures released by Sainsbury’s Finance predict that £22.7 billion will be spent on second-hand cars between February and August, compared with £24.8 billion in the previous six months. That’s a drop of 8%.
Mark Norman, an analyst with CAP Motor Research, said: ‘The main reason at the moment is down to the general economic climate. People are wary of spending.
‘But towards the end of this year and the early part of next year, as new Vehicle Excise Duty bandings come on to the horizon, the process will be affected purely by VED. Certain cars will be virtually impossible to sell.’
Despite claims that the tax increases are to help the environment, official figures have reportedly shown that the effect will be to double revenues to more than £4 billion.
It is estimated that emissions will be cut by just 1%.
Discussion
Err, so used car sales will suffer but surely new car sales will suffer even more? Same kinds of taxes, but also with showroom taxes on top of prices that have not depreciated at all yet!
The cars that will probably not go down in value so much are the ones that are old enough to escape the stupidly high road tax - which are surprise surprise even older. I dont understand this article... :S
The cars that will probably not go down in value so much are the ones that are old enough to escape the stupidly high road tax - which are surprise surprise even older. I dont understand this article... :S
chrisbr68 said:
Err, so used car sales will suffer but surely new car sales will suffer even more?
Agreed.Most people buying new car trade-in their old car. So if the dealer is offering lower trade-in values, this is going to put off people buying a new car. Add to this the stupid "Showroom" tax coming in, in 2010, and new car sale will suffer more.
All this Government is going to acheve, is making us take a hit in our wallet to sell our overtaxed cars. We'll then go out and buy old bangers to avoid tax, that polute more than a newer car would.
Saving the planet? My arse
chrisbr68 said:
I dont understand this article... :S
I think the article is saying that people will have less money to spend, therefore used cars will sell for less. It then goes on to say that the VED fiasco will kill the market for certain cars. Of course it will. Who will buy a £400 car if it costs £400 to tax? It's not necessarily a logical or economic argument, but I bet it turns out to be the case!The Y/01 thing is ridiculous. Just as a post '72 classic is worth less than it's pre-'73 equivalent, so a S2000 registered on a Wednesday will be worth less than its equivalent registered on a Tuesday (if the pate change occured overnight - I haven't checked an '01 calendar!). That fact that it is restrospective is repugnant.
article said:
Figures released by Sainsbury’s Finance predict that £22.7 billion will be spent on second-hand cars between February and August, compared with £24.8 billion in the previous six months. That’s a drop of 8%.
And this supposedly means that 2nd-hand cars will lose £2bn of value? I think it more likely means that people will delay selling their car as they can't afford to upgrade.Yet another pointless and factually inaccurate article touted as news. Please PH, lets have some critical input and not just parrot the crap these people spout, eh???
griffter said:
Who will buy a £400 car if it costs £400 to tax? It's not necessarily a logical or economic argument, but I bet it turns out to be the case!
.
I paid £180 quid to tax a car that cost me £6.64 once. The guy that later paid £200 quid for it clearly had no intention of taxing it (I think the name and address he eventually put on the V5 was a lie too - apparently there are pubs in Liverpool you can get a years car tax for £10) Still he paid cash (I checked EVERY note) and I got that nice letter from swansea confirming car was no longer mine, so hopefully it's been towed and crushed by now. .
griffter said:
chrisbr68 said:
I dont understand this article... :S
I think the article is saying that people will have less money to spend, therefore used cars will sell for less. It then goes on to say that the VED fiasco will kill the market for certain cars. Of course it will. Who will buy a £400 car if it costs £400 to tax? It's not necessarily a logical or economic argument, but I bet it turns out to be the case!The Y/01 thing is ridiculous. Just as a post '72 classic is worth less than it's pre-'73 equivalent, so a S2000 registered on a Wednesday will be worth less than its equivalent registered on a Tuesday (if the pate change occured overnight - I haven't checked an '01 calendar!). That fact that it is restrospective is repugnant.
not very green rendering tens of thousands of perfectly good old cars scrap every year is it? nor fair rendering peoples cars essentially worthless or de-valuing them.
our 2001 Golf GTI turbo will creep up to something like £260 next year. as it's a car in the crossover year, I assume that will put a dent in it's value as people search for the pre march 01 cars.
I think they will have to u-turn on this, but I would bet they will phase it in as opposed to scrapping it altogether....
wab172uk said:
chrisbr68 said:
Err, so used car sales will suffer but surely new car sales will suffer even more?
Agreed.Most people buying new car trade-in their old car. So if the dealer is offering lower trade-in values, this is going to put off people buying a new car. Add to this the stupid "Showroom" tax coming in, in 2010, and new car sale will suffer more.
Diderot said:
Totally logical that older and more polluting pre 2001 cars should have to pay less than newer more efficient ones.
Not really.It makes (some) sense that the government may wish to dissuade purchasers of brand new environmentally-unsound vehicles by slapping on some tax, both at the point of purchase and subsequently on an annual basis. This may help them to meet whatever daft targets they have set themselves or from the EU or whatever. Don't understand/care about this but plenty on here do.
However, the pre-2001 vehicle has already been built. Dissuading purchase of these will result in a possibly perfectly useable car being scrapped and a new one will heve to be built in its place. This in no way fits in with the principles of sustainability.
Anyway, the older, more polluting vehicles do pay more tax - via fuel duty.
We can all tell that money is getting tighter, and car sales is just one aspect. In my brokerage I only deal with new cars, but people really are struggling to sell on used stock and it ends up just sitting there, depreciating in value (but still owing money so slashing prices is a difficult one to swallow... catch 22).
Do we really need to read heavily manipulated statistics calculated by some over paid statistician to understand that there isn't as much cash floating about as there was a couple of years ago? Mere mortals like me who work for a living rather than rely on pay increases for sitting on their arses debating the state of the economy and planning the next expensive war on terrorism certainly don't!
Roght... that was my first entry on this forum and it very nearly turned into a rant... maybe I should start a "rant about how the government id messing everything up for drivers" thread?!
Have fun
Just
Do we really need to read heavily manipulated statistics calculated by some over paid statistician to understand that there isn't as much cash floating about as there was a couple of years ago? Mere mortals like me who work for a living rather than rely on pay increases for sitting on their arses debating the state of the economy and planning the next expensive war on terrorism certainly don't!
Roght... that was my first entry on this forum and it very nearly turned into a rant... maybe I should start a "rant about how the government id messing everything up for drivers" thread?!
Have fun
Just
Gassing Station | Motoring News | Top of Page | What's New | My Stuff