A Week To Think About It.

jonnygee

I have been thinking about the new vrt rates that were announced by John Gormley last week, especially as they affect me directly. I was really annoyed at first about the changes as I was on the brink of ordering a new 1.6 diesel car, obviously I cant do so now but neither can I purchase this car in July as I believe that taking a full years depreciation hit for driving a car for just 6 months doesnt make economic sense. If Mr.Gormley had flagged these changes about next October and introduced them from the beginning of January 2009 then it would make more sense in my opinion.
I believe that the green party had to announce something in the budget that makes it look like they have an input to government but in reality the changes mean nothing this year except that the vast majority of people that would have bought a diesel car cant do so until 2009. The changes to revenue this year will be very minor. Luckily I have a car that I can keep for another year and hopefully still trade for a good price.

unkel

jonnygee wrote: »

the vast majority of people that would have bought a diesel car cant do so until 2009

Your post doesn't make sense. Many people who were planning to buy a diesel are much better of waiting until the new regime starts on 01/07/2008. For some cars the price drop is even more than what the first years depreciation used to be! E.g. we did a calculation on a BMW 320d ES and it dropped a staggering €8k in price!

DonJose

unkel wrote: »

we did a calculation on a BMW 320d ES and it dropped a staggering €8k in price!

But will the dealers pass on the savings to the punters?

carpainter

I had a new C-Max 1.6TDCi on order for January but have decided to hold off due to VRT and motor tax changes, seemed like a no brainer to me. I didn't want to be locked into the more punitive cc based road tax for the life of the car for the sake of a few months depreciation.

Anan1

DonJose wrote: »

But will the dealers pass on the savings to the punters?

The dealers, as always, will charge us as much as we will pay.

Riskymove

DonJose wrote: »

But will the dealers pass on the savings to the punters?

From what a lot of people have said it seems they will have to due to EU conditions relating to pre-tax prices

On the other hand prices to go up every year so there will be some increase I am sure in base prices.

But some cars, like the BMWs referred to above have such a reuction in vrt that they will have to become cheaper. Remember VRT was paid to revenue so the car dealers (excluding those in media this week:rolleyes:) do not get the amount so why would BMW not make their cars a bit more affordable in order to sell more!!

prospect

First of all, I am one who believes that the following should be in place:

A Carbon tax on importing the vehicle/ This should be based not only on the vehicles CO2 figures, but on the manufacturers overall carbon rating (this should apply to all products really, would cut out the cheap crap coming from Asia.).
Then all road tax and insurance should be loaded onto fuel prices.

In respect to the OP's point/greivance, and I am not being a smart ass here, it is simply a case that you cannot please everyone, ever.

cujimmy

[QUOTE=unkel;54653389 E.g. we did a calculation on a BMW 320d ES and it dropped a staggering €8k in price![/QUOTE]

Except your figures were fundamentally flawed. In your example you quote the list price being €47800 which includes 30%VRT, so the cost price is €36769 and not €33460.

Under your new system you add 16% to €36769 which is €42652, which is a saving of €5148

Still a major saving however

Gandalf23

cujimmy wrote: »

Except your figures were fundamentally flawed. In your example you quote the list price being €47800 which includes 30%VRT, so the cost price is €36769 and not €33460.

Under your new system you add 16% to €36769 which is €42652, which is a saving of €5148

No, UNKEL is correct ... the saving is about 8 grand. I have taken his calculation for the 320 from the sticky as follows ...

"A BMW 320d ES (CO2 131 g/km) lists for €47.800. The current VRT rate is 30%, which means that €14,340 (30% of €47.800) is VRT. The list price excluding VRT is €47.800 minus €14,340 = €33,460

The new VRT rate is 16% (band . This means that the the new list price is €33,460 / (1-0.16) = €39,833. A saving of 8 grand!

In formula:

old list price * (1-current VRT rate) / (1-new VRT rate) = new list price"


I have battled with VRT calculation since the changes have been announced, and he is fully correct :-)

prospect

Is it not:

47,800 / 130 = 367.69
367.69 * 100 = 36,769

36,769 * 16% = 5883.07
36,769 + 5883.07 = 42,652.08

47,800 - 42,652.08 = €5,147.92 saving

Cionád

prospect wrote: »

Is it not:

47,800 / 130 = 367.69
367.69 * 100 = 36,769

36,769 * 16% = 5883.07
36,769 + 5883.07 = 42,652.08

47,800 - 42,652.08 = €5,147.92 saving

This is correct. Its 30% on the original price, not 30% on what it goes up to.

Riskymove

prospect wrote: »

Is it not:

47,800 / 130 = 367.69
367.69 * 100 = 36,769

Correct

If VRT is 30% then final price of car is 130% of base price; rather than 30% of the final price..err...hope that makes sense to people!;)

unless of course there are issues around other charges like VAT etc which may also be based on percentage of final cost!

Gandalf23

Sorry guys, I think he is correct :-)

I agree with UNKEL and E92 calculations from other posts.

E92 works out new and old [old prices in square brackets] and the saving on the 320 is indeed about 8 grand. ...

"318i ES €35,600[€40,650]
318i SE €37,450(only 150 more than a base spec 316i at present)[€42,800]
318i M Sport €41,500[€47,420]
318d ES €37,200(€100 less than an entry 316i at present)[€44,600]
318d SE €39,700[€47,650]
318d M Sport €43,600[€52,270]
320i ES €38,100[€43,550]
320i SE €40,000(FWIW a 316i SE is around the same money now, now would you rather have 122 bhp now or wait half a year and for not a single extra cent get 52 extra bhp?)[€45,700]
320i M Sport €44,030[€50,320]
320d ES €39,900[€47,800]
320d SE €42,375 [€50,850]"

Dont forget that the VRT is charged on the total price of the car (including the VRT) ... very confusing, but E92 and UNKEL are indeed correct :-)

prospect

Riskymove wrote: »

Correct

If VRT is 30% then final price of car is 130% of base price; rather than 30% of the final price..err...hope that makes sense to people!;)

unless of course there are issues around other charges like VAT etc which may also be based on percentage of final cost!

Correct, however it shouldn't make a difference:


47,800 / 121 = 395.04
395.04 * 100 = 39,504 - This is the price before VAT.

39,504 / 130 = 303.87
303.87 * 100 = 30,387.70 - This is the price before VAT & VRT

30,387.70 * 16% = 4,862
30,387.70 + 4,862 = 35,249.70 This is the prive with new VRT ex VAT

35,249.70 * 21% = 7,402.44
35,249.70 + 7,402.44 = 42,652.12 This is the price with new VRT and VAT

47,800 - 42,652.12 = €5,147.88 This is the difference in price.

No difference to the original result.

Riskymove

Gandalf23 wrote: »

Dont forget that the VRT is charged on the total price of the car (including the VRT) ... very confusing, but E92 and UNKEL are indeen correct :-)

well if thats the case it changes things but it doesn't make sense to me

If something costs say 10,000 and had a vrt of 10% then it should be 11,000

thats 10,000 plus (10% of 10,000 = 1,000)

What gandalf is implying is that VRT is actually calculated as:

If it costs 10,000 and I was to add 10% VRT it would be 11,000 so therefore I am actually going to add (10% of 11,000 = 1,100) so its gonna be 11,100

Is this really how VRT is calculated???

Gandalf23

This is taken from an earlier post by E92 ...

"The formula is (x*a)/b, where x is the current price, a is the % (expressed as a decimal) price of the car thats NOT VRT, and b is the new % (as a decimal again) price of the car that is NOT VRT.

(Hypothetical) Example: car costs €10,000 and has 25% VRT at present, and under new system attracts 20%.

Well then, x= €10,000, a= 1-0.25=0.75, b= 1-0.20=0.80

For those that don't know, when a car has a VRT of say 30%, this means 30% of the total price of the car is VRT, hence why my % numbers are all below 1.

So do the Maths of it (10000*0.75)/0.8 = (7500)/0.8= €9,375."

I have checked into this in detail and he is correct.

As he says, just do the maths!!!

Gandalf23

Another discussion on this here

See post #12 in particular ...

prospect

As I understand it:

If a car costs €10,000 and VRT is 10%, the cost is €11,000.

Now, to calculate the original starting price:

The proper way to calculate this is to work out the original price, you do this by dividing the price by the '%VRT + 100%' and then multiply the result by 100. So;
€11,000 / '110' = 100
100 * 100 = €10,000 the original price.

What the other calculation does is take away 10% of the total price. So:
€11,000 * 10% = 110
€11,100 - 110 = €10,890

But we know that this is not the correct starting price.

old boy

i may be wrong car prices will come down, just enough for the trade to say so, and come up with more lies damm lies and stasticis

jayok

VRT savings, reductions, dealer greed, consumer shafted... it goes on. Another point to consider is that VRT is based on open market selling price (OMSP). As such if for example, we all wanted to buy a 320D to save the supposed money, then demand for the product will increase, OMSP will increase, so will VRT, as such the €5k saving will be gone and in no time and the old routine restored.

Cynical? You bet.

jonnygee

If everyone can afford to buy a 320 diesel then good luck to you on your purchase, however I still think it would make more sense to wait until Jan. 2009 to buy it. Buying in July and losing a years depreciation does not seem a good idea but that is only my opinion. I still think this was an announcment that could have waited until next year and things would have been a lot simpler for everyone. It just seems to me that the green party wanted to make some kind of announcement to keep their voters happy. If your beemer is down 8 grand in july then it will still be down 8 grand in january next year.

Gandalf23

Just a very quick update on this ... I met the BMW guys in Blackrock earlier this morning and altho they were reluctant to confirm prices for July as yet, they did say that the price of the 318i ES will be a "around €36,000" with the new VRT changes. They could not confirm that my VRT calculations were correct because the salesman didnt know how to work it out. However (very interestingly) he said that BMW HQ had worked out the VRT changes and had informed garages of prices for July 08.

I also got a few other July 08 prices form him for the 320 and looks like the prices worked out by E92 (post #13 above) are not too far off the mark. Salesman also pretty much confirmed the demise of the 316.

This looks like good news then ... seems as if BMW at least will be passing on the VRT reductions :-)

Boggins127

So now i have ordered a new 1.4 tsi passat comfortline for next year and i will avoid the new vrt and road taxs as the car will be registered in january..its a very quick car from wat it was like on the test drive..i recommend it...
thanks,
Dave:cool: