Sales of new cars plummet as vehicle tax increase comes into force

Bluegnomes

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Well it seems that it's a little more complex than the headlines since it looks like it was private buyers piling in during march and being absent in April (down -28%). It will probably be the £40-50k cars I'd have thought that would be most affected (% wise) and reasonably high co2 smaller cars but it will be interesting to see if there VED changes continue to affect buying habits.

The tax on my Porsche (sorry!) looks ridiculously cheap now!
 

Lennox

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Yip my 165mph+ twin turbo 3.0 diesel estate car looks like great value compared to all those muppets in Priuses?!?!


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davidjpowell

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Or maybe a general election is causing people to hold off?
 

MikeInWimbledon

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Fake news

March volumes were artificially high due to the changes in the VED.

Overall we're still at record levels YTD.

Fiddle with the tax rates and people will shift their pattern of purchase.
 

geraldrobins

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Yip my 165mph+ twin turbo 3.0 diesel estate car looks like great value compared to all those muppets in Priuses?!?!


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Muppets??? I wonder what they think of you.
 

geraldrobins

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March volumes were artificially high due to the changes in the VED.

Overall we're still at record levels YTD.

Fiddle with the tax rates and people will shift their pattern of purchase.
I suppose the revised rates will not encourage someone to buy a low emitting car as much but £140 a year on a new car isnt enough to put people off I wouldnt have thought. As said the biggest effect will be on cars costing over 40k.
 

Rory

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I'd be reading suggestions that sales would be down 40%, so it's not too bad.

Mercedes had a good month - up 10%.
 

MikeInWimbledon

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Examine underlying trends

Journos love to create "Buzz." The core question.....surely....is what's happening to the underlying trend, not that a "regulatory adjustment" shoves a bunch of April purchases into March, depressing the April number.

Looking at the whole year, there are much more interesting forces at play. From PCP's to exchange rates.

Here's an earlier "bit of hype" from March:

http://cardealermagazine.co.uk/publish/march-2017-will-biggest-car-sales-month-ever/127487


 
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Dippo

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The car market is up 1.1% for the period January to April. Because of exceptional market factors, you can't look at April on its own. Combined sales for March and April were up 0.8% over the same period in 2016.

I suppose that's not so good for headlines.
 

Lennox

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Muppets??? I wonder what they think of you.


Honestly don't care..... my Golf GTD is kinder to the environment (whole car impact) than theirs.

Sorry I do care deeply for our environment and being a keen scuba diner I've seen reefs changing over the years...... (direct and indirect mankinds influence).

If I move to Denmark I will buy a Tesla, but Priuses just down right annoy me. However, they have helped to pioneer a movement to more environmentally conscious buying patterns.

But don't stop me enjoying circa 700nm or torque!!! Maybe I go RS6 now as it may be a dying breed!!


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Bluegnomes

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Sorry Lennox even the Danish government have realised that they want the tax from pure electric cars and now Tesla are facing a much higher (although not as high as petrol) tax. Sales of Tesla have plummeted in Denmark.

Governments need the tax no matter what we drive.
 

markjay

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Sorry Lennox even the Danish government have realised that they want the tax from pure electric cars and now Tesla are facing a much higher (although not as high as petrol) tax. Sales of Tesla have plummeted in Denmark.

Governments need the tax no matter what we drive.
The government can grant tax breaks to any activity or behaviour that they want to encourage but only until it becomes popular.

Once commonplace, there is little point in continuing with the behaviour-shaping tax incentives, and it becomes unaffordable for the government to do so anyway.

The assumption on the government's side is that people won't revert back to their old habits once the tax incentives is removed.
 
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jonny705

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Wow £140 a year , that is stopping people from buying a new car , imagine if HP/finance deals were stopped , is that how little people have spare?


I drive 2 cars and a bike , a Van for work ,car for normal driving and bike for pleasure and work but do less than 3k miles a year, in all of them, and have to pay over £500 a year to legally keep my vehicles on the road.


Just because you may have a small car , I don't see why it should be 'free' for you.


The tax free status for classic cars was dropped , because the Government needed the money-probably to pay for all the free small cars, so I think it's only fair that everyone pays into the cash cow that is called road tax.
 

Alex225

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Jonny makes a good point. People will change their buying habit based on the tax changing. Yet still buy a brand new car and lose 20% in VAT let alone depreciation straight away!

That's not a dig at someone who wants to buy brand new but a bit ironic I think.

The whole tax thing is a farce anyway and as said, not sustainable. For example my other half had a Focus diesel, she did 18k+ per year in it it cost £30 a year to tax. Yet my CLS costs me £500 a year to tax to do sub-1k a year. I'm not bitter, honest haha
 

nick mercedes

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Dropped some parts off at a car pitch yesterday, they'd not sold a car for 9 weeks, busy last year, tailed off, sales not returned.
 

Dryce

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Jonny makes a good point. People will change their buying habit based on the tax changing. Yet still buy a brand new car and lose 20% in VAT let alone depreciation straight away!
You don't 'lose' the VAT.

The tax has some effect on used prices by keeping them a bit higher. If VAT was removed from new cars then used prices would be a bit lower. Similarly if it was increased then used price would be higher.

So it's really just depreciation from the total price paid.
 

DrNick

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All these arguments above point to the only real solution (given that the problem is pollution)
Get rid of VED or RFL and put an extra flat rate on fuel.
People can then have big engine cars for low mileage and pay the same in pollution tax as small engine cars doing thousands of miles.

It also allows a (sort of) pay per road use measure that could be used to fund road building if we assume that less economic cars wear the roads out more (as less economic cars are paying more tax per mile on the model described.) If we don't like that assumption we could argue that less economic cars are bigger and so use up more road area at a time and so should be paying more per mile in terms of road fund.
Or we take road building out of the car tax regime and just pay for it though general taxation, as we've done up to now anyway if we think its unfair that big cars contribute more to roadbuilding.
 

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