A similar example can be found on the Civic Type R. Previous new one launched at £33k in 2020, the new one but pretty much the same bar tweaks and small incremental improvements launched at... £50k!
2nd hand car prices still inflated?
- Thread starter slinxy
- Start date
Soldato
Interesting thread.
Looking at the question from the other side of the mirror.
Have car manufacturer profits gone up?
If yes then price gauging. If no then cost of manufacture/taxes/Brexit.
Looking at the question from the other side of the mirror.
Have car manufacturer profits gone up?
If yes then price gauging. If no then cost of manufacture/taxes/Brexit.
Soldato
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- 27 Aug 2005
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Yes thats a complete Rip off for a CTR.
I paid £23k for a well-optioned Model S, with 21k on the clock.
Feeling like I got a pretty good deal! I've done a few thousand miles in it and am feeling happy
Looking at the data from BMW, I would say it’s the gauging. But difficult to say for sure as pricing is different across the globe.
In the last 8 years, the number of car deliveries is mostly flat but profit in the last 2-3 years signicantly increased.
EBIT = Total revenue - Cost of goods sold - Operating expenses
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I think some of this is the pcp trend (apart from luxury car tax) if monthly rate is acceptable they will buy it, and the manufacturer, in cahoots with pcp firm, can feed
the used car into their used car infrastructure for a 2nd bite at the cherry.
build costs/bom ? with improved (chinese) productivity and cost reduction (48V, vegan interiors, recycled plastics) then like tesla can't believe these aren't holding steady, as SDK's chart would suggest .
long term durability and cost of spare parts, man hours for repair, that's another thing.
Our local garages aren't now showing inflation on used cars now 4-5 year old petrols seem to be on forecourt for 2-3 months , looking for 4months or so.
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It's obviously not though is it. It's been many years since we got to the point that 90%+ of new cars were purchased in this way, so its long been a factor in car pricing - the significant increases are more recent.
It's also going to make this sort of financing increasingly unaffordable because at the same time new cars are getting ever more expensive, used ones are once again depreciating. When a 2-3 year old car is half the price of a new one again, the higher list price will make the monthly payments unaffordable to more people.
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If I am reading the EBIT chart correctly, BMW profits have taken a massive hike upwards in the last three years?
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Soldato
I'm in big trouble if/when my current car fails.
I've been looking around and just can't afford to replace it.
A personal loan rate is now double what it was 3 years ago (7% against 3%).
Junk at the low end of the market (sub £10k). A 10 year old car for £10k? No chance.
I looked at my workplace salary sacrifice scheme. It's crazy, I don't know how anyone can take it up. You get a discount for the salary sacrifice but when the BIK is added back it negates all the saving. Why am I paying BIK when I'm paying for the goddamn car??!!
I've been looking around and just can't afford to replace it.
A personal loan rate is now double what it was 3 years ago (7% against 3%).
Junk at the low end of the market (sub £10k). A 10 year old car for £10k? No chance.
I looked at my workplace salary sacrifice scheme. It's crazy, I don't know how anyone can take it up. You get a discount for the salary sacrifice but when the BIK is added back it negates all the saving. Why am I paying BIK when I'm paying for the goddamn car??!!
Because you're picking cars with petrol engines presumably. The whole point of that system was to influence company car choices and make people more likely to select first low and later zero emission cars.
Sounds great.
Soldato
That's my point - it's not a company car. I'm paying for it, yet it attracts the same BIK as a company car would, how is that fair?
Technically it is a company car though, you're giving up salary, your company is leasing a car and giving it to you to use as a benefit instead of that salary. You aren't directly paying for the car.
Which is effectively how most company cars always worked (you often could take an allowance instead), it just wasn't quite so obvious.
Edit - in effect, the salary sacrifice element just makes the offering of a company car more flexible.
Previously you might get offered a £5000pa allowance or you could choose from a selection of cars available to the company that cost them £5000pa. Trade ups and rebates etc. added a bit of flexibility but would typically prevent someone getting a car that was 'too nice' or nicer than the senior manager grades etc.
Salary sacrifice now just means you can choose more freely whether you want to give up £2500pa or £10000pa in exchange for a car, without the typically restrictive structure of a standard company car scheme.
As far as tax implications go though, there's not a great deal of practical difference between the two systems.
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Yes it is.
The net amount you pay after savings on tax is less than you'd pay if you'd leased the car directly yourself, if you pick a low or zero emissions vehicle.
Because of the above.
The whole point in the system, which was designed before electric cars, was that the income tax element was replaced by company car tax, which you could then influence by choosing a lower emissions car.
If you are finding the monthly Benefit in Kind tax bill is significant, then you are presumably picking a car with higher emissions - the system is designed to incentivise you not to do this.
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Soldato
It's not a company paid for car though is it. I don't get a company car as part of my salary package. My salary is X. I have to give up Y salary to get a car on the scheme, so I'm paying for it with a salary reduction.
For it to be a company car it would have to be provided as part of my salary package, which it isn't.
I understand what you're both saying above about technically it is a company car, but as far as I'm concerned it's not because I'm paying for it myself, so there is no 'in kind' benefit is there.
For it to be a company car it would have to be provided as part of my salary package, which it isn't.
I understand what you're both saying above about technically it is a company car, but as far as I'm concerned it's not because I'm paying for it myself, so there is no 'in kind' benefit is there.
Yes, it is a company car. This is how it works. Who is paying for the lease - your company. The fact it's then recharged to you through salary doesn't stop it being a company car and this is why it attracts benefit in kind tax.
I don't really understand your point. Its a company car, it's really that simple. That's why you are taxed on it as per the rules around company car tax.
Out of interest, which car are you looking at? As I said presumably it isn't a zero emissions car because otherwise the benefit in kind tax due would be quite low. In which case I'm not sure why you seem to expect to be able to get a huge tax saving just so you can buy a conventional car? What would be the point in allowing that?
How much is the lease at market value? How much is the lease through your salary, after the saving in income tax but before the application of company car tax? There is your benefit.
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Soldato
Here's some examples of a Peugeot 308 estate on my scheme. The top two are a 1.5 diesel and a 1.2 petrol (hardly setting the world alight are they) and the bottom one is the EV.
£300 per month in BIK WTF!
Back to the point about company car tax. I get what you're saying that technically it's a company car through the rules. However what I am saying is it's not a company car from my perspective, because I don't get a car allowance or car as part of my package.
So if I get a car through the scheme, I'm paying for it (through a salary reduction) not the company.
If I got a car allowance my salary would be higher in the first place, or I would be offered a car instead of a higher salary. That isn't happening here.
Soldato
Then what's the point of even offering diesel and petrol cars on the scheme at all? The whole point is that it is salary sacrifice so you're meant to save on the tax. If that isn't there, what's the point in having the scheme?
Because the system now is there to incentivise you to pick an electric car. This is the point. They do not want you picking a diesel or a petrol car, so the tax rates on these have been steadily increasing for years.
This is always how its worked - its always been there to encourage people to select lower emissions cars. It's not a surprise that higher emission cars are made expensive on such schemes - this is to discourage people from selecting them. All that has changed over time is what is considered to be a high emission car. Years ago it was cars with large engines, now its cars with basically all engines.
It doesn't matter what your perspective is.
Ok, so lets look at this from the way you think it should work.
Lets say that the benefit in kind tax is removed from the diesel in the first example.
The cost of the lease is £726 a month - this is what the car is costing your employer. You then have this taken from your salary before tax, meaning you save £305 in tax and national insurance. So now that £726 lease is only costing you £421 a month, before the application of company car tax.
But this is because the government is now losing that £305 a month in revenue from you. Why? Who should pay for that? What is the point in giving you a £300 a month tax saving for driving a diesel Peugeot? Why should anyone but you pay for this?
So, instead what happens is that the reduced tax is effectively made up (sometimes by more than the initial tax saving) for through benefit in kind tax if you select the 'wrong' vehicle. So, if you pick the diesel, there is no saving because nobody but you benefits from it, it may even cost you more.
The government has decided that it is happy to give up tax revenue to encourage people to select zero emissions cars. This is why, therefore, the benefit in kind tax is very low on the electric car. You make a considerable saving, so that when faced with the decision between diesel or electric, you go for an electric car.
As for why the diesels are even offered - why not? They are just orders through a lease company, if the car is available it'll be on the list.
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