VAT on Pre Registered Car?

scottiescott

I've been looking at possibly purchasing a pre-registered Audi A5 at a price which the dealership claims "save £7000+ on RRP".
However, a bit of googling, if I understand correctly" would indicate that VAT is still payable by a private individual (me!).
The prices indicated on their pre-registered stock does seem a little odd, e.g. £34,567.
Am I understanding this correctly and the deal is not as great as first indicated?
Thank you.

Grumpy_chap

The advertised price will include VAT.

£42k car (retail list price OTR Inc VAT).  Save £7k means you pay £35k.

How does that pre-reg offer compare to best price for brand new?  Check some online brokers before you sign on the dotted line.

neilmcl

VAT is included in the price of the car, what makes you think it isn't?

The saving isn't because there's no VAT incurred, it's because you're buying what is in effect a second hand car with you as the second owner.

motorguy

No

The price quoted to you will be inclusive of VAT.

Be VERY wary of "Save XXXX on RRP" type offers - new cars are often heavily discounted and will qualify for incentivised finance deals that pre-reg cars wont (which may or may not be of significance to you)

Check prices on the broker sites -

www.broadspeed.com
carwow
coast2coast cars
carfile.net

Those discounted prices are what you need to be checking Pre-Reg prices against.

I'm sure other people will post others too

Also, a lot of pre-reg cars will be previous reg plate / previous year which could / will impact residual values down the line compared to buying a brand new one.

scottiescott

neilmcl said:

VAT is included in the price of the car, what makes you think it isn't?

The saving isn't because there's no VAT incurred, it's because you're buying what is in effect a second hand car with you as the second owner.

Thank you all very much for the fast replies guys.
I pretty much thought the same as you're all saying, but then I found this;
Sorry I can't highlight the relevant part, but if you can scroll down to - "Is VAT payable on a pre-registered or nearly new car"

https://www.buyacar.co.uk/cars/417/how-much-is-vat-on-cars#:~:text=When a car is pre,private customer buys the car.

And this is the car in question;

https://www.john-clark.co.uk/audi/used-cars/12315840-audi-a5-s-line-40-tfsi-204-ps-s-tronic/

Where am I going wrong with my understanding!?
Thanks again.

Grumpy_chap

Don't worry about VAT - just worry what you pay.

For comparison, the same car can be had here as first registered keeper for £34,248
https://broadspeed.com/CarView/Audi/A5/53811/40_TFSI_2.0_204PS_Petrol_S_line_Automatic_2_doors

Try other brokers also.

motorguy

scottiescott said:

neilmcl said:

VAT is included in the price of the car, what makes you think it isn't?

The saving isn't because there's no VAT incurred, it's because you're buying what is in effect a second hand car with you as the second owner.

Thank you all very much for the fast replies guys.
I pretty much thought the same as you're all saying, but then I found this;
Sorry I can't highlight the relevant part, but if you can scroll down to - "Is VAT payable on a pre-registered or nearly new car"

https://www.buyacar.co.uk/cars/417/how-much-is-vat-on-cars#:~:text=When a car is pre,private customer buys the car.

And this is the car in question;

https://www.john-clark.co.uk/audi/used-cars/12315840-audi-a5-s-line-40-tfsi-204-ps-s-tronic/

Where am I going wrong with my understanding!?
Thanks again.

Any VAT payable will be included in the price they quote you

Check Broadspeeds prices here.  I dont think they're doing you any favours with that car unless theres a bit of optional spec on it.

https://broadspeed.com/new_cars/Audi/A5/Choose_Number_Of_Doors/Choose_Bodystyle/petrol/Choose_Engine_Size/automatic

... and Audi are doing 3.1% APR on a brand new car.

https://www.audi.co.uk/finance-and-offers/pcp-deals.html

macman

Just remember that when you sell it, you'll be the second owner, the buyer the third, and the price will reflect that. If you plan to keep it a few years, it's less of a factor.

Jenni_D

motorguy said:

Check prices on the broker sites -

www.broadspeed.com
carwow
coast2coast cars
carfile.net

I have a company car and the lease expires in October, whereafter I'll get an allowance and need to acquire my own car. So those links will be useful for me later on - thanks for posting.

AdrianC

VAT is paid on brand new cars.

If a VAT-registered purchaser of a brand new car buys it for business use, and reclaims the VAT, they charge VAT on their sale.

This continues through the entire life of a vehicle, no matter how many buyers... right up until the VAT is not reclaimed by a buyer. Then the vehicle is never "VAT qualifying" again. They don't charge VAT on sale, and the next buyer can't reclaim it.

Here's a 2yo VAT qualifying used car.
https://simonfurlonger.co.uk/cars/show.php?id=1192

Here's a 5yo one.
https://www.beckevans.co.uk/used-smart-fortwo-sidcup-kent-3311041

Let's say the price of a used VAT qual vehicle is £10,000+vat.
It can be advertised as £10,000+vat or it can be advertised as £12,000 inc VAT. Either way, you pay £12,000 to get the keys... Just as you would for a £12k non-VAT-qual one.

The only difference between the £12k inc VAT car and the £12k non-VAT-qual one is if you're a VAT reg buyer buying for business use. You would reclaim £2k VAT on the first, then charge VAT on resale. You couldn't on the second.

Car_54

motorguy said:

Be VERY wary of "Save XXXX on RRP" type offers - new cars are often heavily discounted and will qualify for incentivised finance deals that pre-reg cars wont

That's a common misconception. I've benefitted from massive manufacturer and dealer "contributions" for taking finance on an approved-used car.