Ireland facing EC proceedings over VRT charges

Zube

Mailman wrote: »

The link some posters are making between a reduction in VRT and an automatic proportionate increase in Income tax is fallacious.

Let's fire a bunch of civil servants, teachers, nurses and guards instead, that'll be popular!

Or wait, we could just borrow the money!

Mailman

Zube wrote: »

Let's fire a bunch of civil servants, teachers, nurses and guards instead, that'll be popular!

Or wait, we could just borrow the money!

No, Teachers, Nurses and Guards can stay. Many Public/Civil servants can go especially those in the tax offices pushing the extra paperwork involved in processing VRT applications.
Stop dragging this thread off-topic by going down an "if I ruled the world" cul de sac.

crocro

Mailman wrote: »

They're opening infringement proceedings. The Revenue Commissioners have already been through the mill on this arguing that they haven't infringed the treaties so all that is available now is remedy.

http://europa.eu/rapid/pressReleasesAction.do?reference=MEMO/07/343

These infringement procedures relate to the revenue's method of calculating OMSPs and VRT on imports, not to the principle of VRT. The principle of member states setting their own tax rates is not in question and will be copperfastened by the Lisbon treaty guarantees.

-Chris-

Question: Will the ratification (or not) of the Lisbon Treaty have any direct effect on VRT - is VRT mentioned in the Lisbon Treaty?

Mailman

crocro wrote: »

These infringement procedures relate to the revenue's method of calculating OMSPs and VRT on imports, not to the principle of VRT. The principle of member states setting their own tax rates is not in question and will be copperfastened by the Lisbon treaty guarantees.

If you read through my previous posts you will see that I have never disagreed with the Member states retaining Sovereign right to levy taxes. It is a corner stone of the Federation and without it the E.U. would implode. Their OMSP calculation methodology runs contrary to other articles of the treaty and is therefore illegal.

Smcgie

This is music to my ears and in my opinion it should have happened long ago.. Next on the list is to stop paying tv license fees when rte also have add revenue :mad

crocro

I did read them but I misunderstood you. So how do you think the EU will direct the revenue? What is a fair method for calculating VRT on imports?

Mailman

Preferred VRT calculation method: A flat fee which covers cost of administration and no more leaving consumers with more money in their pocket to spend on other local goods and services which will stimulate the local economy.

smash

Mailman wrote: »

Preferred VRT calculation method: A flat fee which covers cost of administration and no more leaving consumers with more money in their pocket to spend on other local goods and services which will stimulate the local economy.

The same should be applied to motor tax in my opinion... that's how the UK do it!

Beta Ray Bill

Hi Guys

I have to say I am very opposed to VRT. I think it's a stupid tax that makes trading motors very un-competitive. It's more difficult on the dealer too.

I would like it tomorrow if they decided to abolish VRT. however there are some ramifications about doing this.

suppose tomorrow VRT was abolished.
Firstly:
all our cars would be reduced in value by approx 15%-36%
that is a massive hit! MASSIVE! that could be €10,000 for some people!
Secondly:
If VRT was just banished all together. No one in this country would EVER be able to sell a 2nd hand car again.
think about it.
you could spend €10,000 here on a 2nd hand LX Mondeo or the same amount of money on fully loaded one up North/in the UK.

there are sweet FA fully loaded cars here as the VRT used to charge on the extras that a car had! there for 90% of our cars are base model where as up north they are all fully loaded!

Now don't get me wrong... I HATE vrt! however just abolishing it is opening up a big can of worms!

I think a better Idea would be to gradually reduce it over the next 5 years! IE for the 36% bracket it would go like
2010 : 29%
2011 : 22%
2012 : 14%
2013 : 7%
2014 : 0%

this would give the market and economy time to climatise to the change in the Tax System.

I think now would be a good time to do it too. as the fact that car sales are down means that they aren't making that much money from VRT anyway.

In Terms of regenerating lost revenue I think it would be fairer to reduce car tax and add a couple of cent to the price of petrol and diesel. the more you use the more you pay.

I know some high mileage users would prefer the current system as it's cheaper for them however you cannot deny that this is fairer.

I use my car on the weekends only, the Tax is almost €700 on it and I do less than 5000 miles a year! that's €0.14 a mile! then there are people driving Diesels that do 25000 miles a year and get cheaper fuel. that's €0.028 a mile! So they pay way less even though they use the road more!

Mailman

Right-e-o, I'll wait 5 years for VRT to be eliminated and won't pay a visit to a local dealer for the next 5 years. See how many of them survive the 5 years when I'm ready to buy off them.
Government intervention in a free market is harmful. Remove the intervention now rather than dragging out the misery for years.

Biro

It's not as simple though as your car loosing money and costing you lots. If your car devalues by 36% you don't loose a penny until you sell it. When you come to sell the car it'll be worth less alright, but so will the car you're about to buy.
It's not all plain sailing, and it's not easy to get rid of it, but it'll be replaced with a Carbon tax if it is replaced.

Beta Ray Bill

Mailman wrote: »

Right-e-o, I'll wait 5 years for VRT to be eliminated and won't pay a visit to a local dealer for the next 5 years. See how many of them survive the 5 years when I'm ready to buy off them.
Government intervention in a free market is harmful. Remove the intervention now rather than dragging out the misery for years.

that's a fair point. Some people will wait the 5 years (people with brand new cars), but not a lot. I can see people waiting 2 years etc. bare in mind your own current car will be devaluing too at an accelerated rate. so you will still be getting less for it. therefore buy waiting 5 years you wouldn't actually be saving that much.

If you have an 03 car and decide to wait 5 years you will get sweet FA for it anyway!

Ya cant just lift this tax.

I personally stand to lose €5000 if this tax was dropped tomorrow.
there are people out there with 07,08,09 cars that stand to lose a hell of a lot more.

Biro

grahambo wrote: »

that's a fair point. Some people will wait the 5 years (people with brand new cars), but not a lot. I can see people waiting 2 years etc. bare in mind your own current car will be devaluing too at an accelerated rate. so you will still be getting less for it. therefore buy waiting 5 years you wouldn't actually be saving that much.

If you have an 03 car and decide to wait 5 years you will get sweet FA for it anyway!

Ya cant just lift this tax.

I personally stand to lose €5000 if this tax was dropped tomorrow.
there are people out there with 07,08,09 cars that stand to lose a hell of a lot more.

But you'll only lose your €5000 if you sell and buy nothing else. If your car price came down 20% because of VRT going, then lets say it drops from €25,000 to €20,000. You may state that you've lost €5,000, but lets say the brand new version of your car actually costs €50,000. Less 20% of that and you have the new version now worth €40,000. Cost to change for you yesterday was €25,000 worth of your car plus an additional €25,000 = €50,000. Cost to change tomorrow given that each car dropped 20% would be €20,000 for your own car, plus €20,000 = €40,000 for the new one.
So you could argue that you were €5,000 better off because of the changes.

JHMEG

Working on the 2006 figures, 2.1bn litres petrol and 256m litres diesel sold. 2.356bn total.

Tax take from VRT was €1.2874bn and motor tax was €879.7m, total €2.167bn.

There are 1.7m registered cars on the roads.

To replace VRT with fuel tax would add 54c to the cost of a litre.

To do the same for motor tax would cost 37c per litre.

To replace motor tax with a flat say €150 per annum would raise €255m (a shortfall of €625m) requiring 27c per litre.

Putting figures on all those, the average price per litre petrol is 116.9c today.
No VRT: 170.9 per litre.
No motor tax: 153.9 per litre.
No VRT or motor tax: 207.9 per litre.
€150 motor tax: 143.9 per litre.

In comparison: cheapest petrol in Europe is 89c in Poland, most expensive is 141c in Holland. So any option would push us to the most expensive in Europe.

The bottom line is the govt need this money to run the country and they'll get it out of you one way or another. You will pay! E.g. VRT has collapsed, some of the revenue has been replaced by the new Income Levy.

Only long term answer is to reduce the cost of running the country, and only then can we talk about reducing taxes like VRT, motor tax, fuel tax, the Income Levy etc.

Mailman

JHMEG wrote: »

Only long term answer is to reduce the cost of running the country.

That's the right answer!

Mailman

Also remember that during the period '95 to '00 before the property bubble took off and inflation took hold the economy and as a result tax take grew through reductions in taxation and increased economic activity in the local economy.
Cutting taxation is not a zero sum game.

Beta Ray Bill

Biro wrote: »

But you'll only lose your €5000 if you sell and buy nothing else. If your car price came down 20% because of VRT going, then lets say it drops from €25,000 to €20,000. You may state that you've lost €5,000, but lets say the brand new version of your car actually costs €50,000. Less 20% of that and you have the new version now worth €40,000. Cost to change for you yesterday was €25,000 worth of your car plus an additional €25,000 = €50,000. Cost to change tomorrow given that each car dropped 20% would be €20,000 for your own car, plus €20,000 = €40,000 for the new one.
So you could argue that you were €5,000 better off because of the changes.

I like your calculations however it doesn't really work like that.
I accept it's all relative as the price of everyone's car is going down and if you are buying another car you wont "lose" money.

But i think you're just buttering it up so to speak. You're argument is based on the fact that you are assuming no one will have trouble selling there cars at selling time. but I for one would not buy a base model Irish car for 10k when I could buy a fully loaded model up the north for 10.5k. there are a HELL OF LOT of base model cars on the road here mate. look at the mondeo's as an example, all LX models. anyone that has any sense would never buy here given that you can get a fully loaded one up north for almost the same price. you would have to significantly drop your price even further to to sell it. the Idea of spreading it over 5 years would be to stop this happening. and would also ease the strain on the revenue.

Beta Ray Bill

JHMEG wrote: »

Working on the 2006 figures, 2.1bn litres petrol and 256m litres diesel sold. 2.356bn total.

Tax take from VRT was €1.2874bn and motor tax was €879.7m, total €2.167bn.

There are 1.7m registered cars on the roads.

To replace VRT with fuel tax would add 54c to the cost of a litre.

To do the same for motor tax would cost 37c per litre.

To replace motor tax with a flat say €150 per annum would raise €255m (a shortfall of €625m) requiring 27c per litre.

Putting figures on all those, the average price per litre petrol is 116.9c today.
No VRT: 170.9 per litre.
No motor tax: 153.9 per litre.
No VRT or motor tax: 207.9 per litre.
€150 motor tax: 143.9 per litre.

In comparison: cheapest petrol in Europe is 89c in Poland, most expensive is 141c in Holland. So any option would push us to the most expensive in Europe.

The bottom line is the govt need this money to run the country and they'll get it out of you one way or another. You will pay! E.g. VRT has collapsed, some of the revenue has been replaced by the new Income Levy.

Only long term answer is to reduce the cost of running the country, and only then can we talk about reducing taxes like VRT, motor tax, fuel tax, the Income Levy etc.

Thanks for this dude!

and you are correct the only way is to reduce the cost of running the country.

as motorists in this country we pay a FORTUNE to use the roads! it's scary really when ya think about it.

for me personally it's the leading factor that makes me want to leave the Republic altogether.

crocro

JHMEG wrote: »

...
No VRT: 170.9 per litre.
No motor tax: 153.9 per litre.
No VRT or motor tax: 207.9 per litre.
€150 motor tax: 143.9 per litre.

In comparison: cheapest petrol in Europe is 89c in Poland, most expensive is 141c in Holland. So any option would push us to the most expensive in Europe.

The cost of fuel can't be too far out of line with the UK due to border smuggling and legitimate cross border sales. The UK has had fuel tax riots in the past and doesn't have much room to increase duty.

Another problem with high fuel taxes is that some people lose out and they will always shout louder than those who gain. Sales reps and long distance commuters and anyone who lives in the countryside in an area that cannot be served by public transport would not accept this.

In the last decade, planning policy has placed hundreds of thousands of new houses in areas of the countryside far from jobs and shops. For these people, a car is now a necessity. Future car taxes are more likely to be aimed at people in Dublin where they have some possibility of alternative transport. Congestion charges and more parking taxes are more feasible than additional fuel taxes.

Biro

JHMEG wrote: »

Working on the 2006 figures, 2.1bn litres petrol and 256m litres diesel sold. 2.356bn total.

Tax take from VRT was €1.2874bn and motor tax was €879.7m, total €2.167bn.

There are 1.7m registered cars on the roads.

To replace VRT with fuel tax would add 54c to the cost of a litre.

To do the same for motor tax would cost 37c per litre.

To replace motor tax with a flat say €150 per annum would raise €255m (a shortfall of €625m) requiring 27c per litre.

Putting figures on all those, the average price per litre petrol is 116.9c today.
No VRT: 170.9 per litre.
No motor tax: 153.9 per litre.
No VRT or motor tax: 207.9 per litre.
€150 motor tax: 143.9 per litre.

In comparison: cheapest petrol in Europe is 89c in Poland, most expensive is 141c in Holland. So any option would push us to the most expensive in Europe.

The bottom line is the govt need this money to run the country and they'll get it out of you one way or another. You will pay! E.g. VRT has collapsed, some of the revenue has been replaced by the new Income Levy.

Yep, good post. It's just not that simple, and we really do have to grin and bear it until we reform everything else.

JHMEG wrote: »

Only long term answer is to reduce the cost of running the country, and only then can we talk about reducing taxes like VRT, motor tax, fuel tax, the Income Levy etc.

I agree. Take 15% pay cuts in the public sector as a starting point. We're giving away free gas in Mayo, that needs to be taxed. How much did we give away on toll roads by handing them to some third party?
We could use prisoners to build the western corridor railway. (and yes, I am serious! I think a 12 hour working day would be a good deterrent to keep out of prison - certainly better than a PS3 and weekly pocket money).

smash

Biro wrote: »

But you'll only lose your €5000 if you sell and buy nothing else. If your car price came down 20% because of VRT going, then lets say it drops from €25,000 to €20,000. You may state that you've lost €5,000, but lets say the brand new version of your car actually costs €50,000. Less 20% of that and you have the new version now worth €40,000. Cost to change for you yesterday was €25,000 worth of your car plus an additional €25,000 = €50,000. Cost to change tomorrow given that each car dropped 20% would be €20,000 for your own car, plus €20,000 = €40,000 for the new one.
So you could argue that you were €5,000 better off because of the changes.

Not true. If you buy a car for 50k and tomorrow a new one costs 40k because of no VRT. Then you sell in a year, yours is worth about 30k on trade in. Now you could have a car loan for the original 50 and with interest etc you could owe 45 on it still.

so you now owe 45 on a car worth 30 and want to trade up? I don't think so!

Biro

steve06 wrote: »

Not true. If you buy a car for 50k and tomorrow a new one costs 40k because of no VRT. Then you sell in a year, yours is worth about 30k on trade in. Now you could have a car loan for the original 50 and with interest etc you could owe 45 on it still.

so you now owe 45 on a car worth 30 and want to trade up? I don't think so!

People are hung up on car loans. That's part of the reason for the recession, people borrowing way beyond their means. If you're buying a car for 50k and need a 50k loan, then you are a moran who can't accept that you can't afford the 50k car.
Besides, it's not as simple as you describe. When you borrowed 50k you were obviously happy with paying back 50k. In a years time your car would be worth 35k realistically. If you manage to only owe 35k on it, then you're on par with depreciation. Lets say you want to upgrade, you need to add 15k to your loan to buy again. That gets you a new car and a 50k loan.
Now, situation B, buy the car for 50k, a year's time it's worth 35k minus another 10k (for example) because of VRT gone. So the car's worth 25k. Now the new car has come from 50k to 38k (a new car will drop more because a percentage of a bigger amount), and you have a 35k loan, a 25k car, and you want a new car. The garage tells you it's 13k to upgrade, so that brings your loan back up to 48k. So in year two you have a 48k loan and a brand new car, where as in situation A you have a 50k loan and a brand new car. The fact that the car is worth less only matters in your head, because you have to still pay back the 50k or 48k, no matter what you're driving. You didn't "lose" 10k. You're not 10k out of pocket. You've a smaller loan than you would have had for a brand new car, the only difference is your new car is worth less than the loan. That doesn't matter as long as you're driving that car.
Anyway, if you're in the above situation then you're a moran and I've no sympathy. Borrowing 50k for a 50k car is silly.

robbie99

Biro wrote: »

Borrowing 50k for a 50k car is silly.

+1

robbie99

There's an immediate and huge advantage that a flat fee VRT system can have for the Irish motor trade that I think has been overlooked.

If a flat fee VRT system was implemented in such a way that the same fee applied regardless of the age of the car, say for example €5,000, this would have the effect of reducing VRT on new cars but increase it on older used cars. The big advantage for the Irish motor trade is that it becomes relatively more expensive to import used cars, therefore increasing the values of the current secondhand stock. The relatively high VRT will help in keeping foreign bangers out and Irish bangers will still have some value until lack of NCT sorts them out!

Revenue will need less manpower as they discard their 'depreciation tables'. Irish motor trade will have less competition from 'foreign bangers'. New cars will be cheaper for consumers. Cars will have a longer life as they retain their value better which will reduce the overall amount of cars being imported. Lots of positives. New car distributors won't need to worry about depreciation as they don't have to register their cars up front. Existing Irish registered used cars will go up in value. Lots of positives. Only negative is that nearly new used cars may drop in value (if their current residual VRT is above a new flat fee VRT) but as owner of an 08 car I'm not concerned as the trade up car will have come down in price by more.

smash

I agree about people borrowing like that but it's what people do!

robbie99 wrote: »

If a flat fee VRT system was implemented in such a way that the same fee applied regardless of the age of the car, say for example €5,000, this would have the effect of reducing VRT on new cars but increase it on older used cars.

That is crazy talk! 5k standard... I don't think so and dealers would cop this and up the prices of used older cars. Say a car costs 3000 and VRT is 1000 and a dealer here has one for 5000 - you've saved yourself 1000 but if VRT was 5000 then you're paying 8000 and the dealer car that was 5000 would go up to 7000 because they know they could charge it - the car wouldn't be worth that!

robbie99

steve06 wrote: »

That is crazy talk! 5k standard... I don't think so and dealers would cop this and up the prices of used older cars. Say a car costs 3000 and VRT is 1000 and a dealer here has one for 5000 - you've saved yourself 1000 but if VRT was 5000 then you're paying 8000 and the dealer car that was 5000 would go up to 7000 because they know they could charge it - the car wouldn't be worth that!

5k is a figure I plucked out of nowhere. It could be 2k, or 4k. Or maybe some other figure that varies with cc, or emmisions, or wheelbase, or number of doors whatever once age of car is excluded.

Using your figures, (and I agree with your calculations) you only get to save that 1000 if you import that used car as lots of us do right now. The beauty of a flat fee here is that it immediately makes it not worthwhile importing the secondhand stuff. The used car salesmen of Ireland will orgasm at that! Car owners will suddenly find that their existing bangers are worth a lot more and will be worth repairing and keeping in good nick. Insurance companies will have less economic write-offs.

With new cars cheaper, older cars more valuable than before and lasting longer, the effect of this is that over the lifetime of the car there'll be less depreciation per year and depreciation is the biggest cost of car ownership (unless you're already practicing bangernomics of course). The Greens should love this as well because scrapping a car and replacing it with a new one has more carbon emmisions associated with it than keeping the old one on the road longer. Longer lasting cars in Ireland will mean fewer cars overall will need to be imported, keeping more of our hard earned cash here along with additional trade for the Irish motor trade. Crazy idea yes but it could work!

Seth Brundle

Mailman wrote: »

Posturing in the Dail is one thing. Already taxing our fuel higher than our neighbour is another.
http://www.aaireland.ie/petrolprices/ see May month and remember that Supermarkets sell fuel cheap in the north.

For several months, our fuel was cheaper that NI/UK. Anyhow, its largely irrelevant what Britain charges for fuel because we don't live there and by and large don't have to compete with them for petrol!
Just remember that we have a big bitch of a budget coming towards the end of the year. If you think taxes are bad now, just wait and see!

Mailman wrote: »

Buying power has no impact on VRT.

But it does allow large companys to get decent discounts making getting a new fleet that bit more attractive.

Mailman wrote: »

So are you ready to take to the streets in protest yet?

Why? I'll be paying out money either way.

Cars&cars wrote: »

VRT might not go soon, but the Government that hiked it up will, goodbye FF, and VOTE NO to LISBON - VRT our Virtious Reply Thanks!

Are you in favour of the EU or not? Don't vote against Lisbon because a we elected a shower of idiots into government here! Don't forget who is pro-Lisbon and who is against it!

Mailman wrote: »

The link some posters are making between a reduction in VRT and an automatic proportionate increase in Income tax is fallacious. There are myriad political reason why the Government would find it very difficult to increase Income Tax rates. Attempting to increase Income tax rates would also hasten their departure from office.

I don't think that I mentioned Income Tax. However, it would have to be re-couped somehow.

Mailman wrote: »

No, Teachers, Nurses and Guards can stay. Many Public/Civil servants can go especially those in the tax offices pushing the extra paperwork involved in processing VRT applications.
Stop dragging this thread off-topic by going down an "if I ruled the world" cul de sac.

How are you going to get rid of those on permanent contracts then?

-Chris- wrote: »

Question: Will the ratification (or not) of the Lisbon Treaty have any direct effect on VRT - is VRT mentioned in the Lisbon Treaty?

Taxation is left to the individual member state
http://www.irishtimes.com/focus/2009/drafttext_guarantees/index.pdf

(I think!)

steve06 wrote: »

I agree about people borrowing like that but it's what people do!

...and reckless lending (by both banks and the public) have largely gotten us to where we are now!

Owen

Biro wrote: »

Borrowing 50k for a 50k car is silly.

The majority of wealthy people with tens of thousands in the bank borrow for their cars. Very few people pay for new cars with cash.

What I disagree with here is borrowing for a car full stop. I would prefer to see the American way come on board, with Leasing. You lease a car for 2/3 years, the leasing company pays for servicing, tires, tax, repairs, and you have no negative equity should the economy demolish the residual value of cars.

smash

kbannon wrote: »

...and reckless lending (by both banks and the public) have largely gotten us to where we are now!

If someone earning 100k a year wanted to borrow 50k over 5 years for a car I wouldn't consider it reckless lending. There was a lot of people doing this but then markets collapsed. Not the fault of the person that borrowed and with the salary at the time it was easily repayable.

PaintDoctor wrote: »

What I disagree with here is borrowing for a car full stop. I would prefer to see the American way come on board, with Leasing. You lease a car for 2/3 years, the leasing company pays for servicing, tires, tax, repairs, and you have no negative equity should the economy demolish the residual value of cars.

I don't really agree as you never actually own anything then. It's like renting, you're just throwing money away.

Owen

steve06 wrote: »

I don't really agree as you never actually own anything then. It's like renting, you're just throwing money away.

But for the type of customer who changes car every 3 years, they never own it either

Seth Brundle

steve06 wrote: »

If someone earning 100k a year wanted to borrow 50k over 5 years for a car I wouldn't consider it reckless lending. There was a lot of people doing this but then markets collapsed. Not the fault of the person that borrowed and with the salary at the time it was easily repayable.

True but the majority were not earning that amount yet still wanting loans like that!
Ireland had a huge debt per head figure compared to other countries. Much of the problem stemmed from credit (mortgages, credit cards, loans, etc.) being too easy to get with poor stress testing of the applicants.

-Chris-

kbannon wrote: »

-Chris- wrote: »

Question: Will the ratification (or not) of the Lisbon Treaty have any direct effect on VRT - is VRT mentioned in the Lisbon Treaty?

Taxation is left to the individual member state
http://www.irishtimes.com/focus/2009/drafttext_guarantees/index.pdf

(I think!)

Thanks KBannon!


Based on this info, let's all stop mentioning the Lisbon Treaty and threatening to vote No as a punishment to the government for not changing/removing VRT etc.

Lisbon is a separate arguement and would probably be better served being debated in a forum other than Motors.

smash

kbannon wrote: »

True but the majority were not earning that amount yet still wanting loans like that!
Ireland had a huge debt per head figure compared to other countries. Much of the problem stemmed from credit (mortgages, credit cards, loans, etc.) being too easy to get with poor stress testing of the applicants.

I was talking to a dealer a few years ago about a car and he informed me that he could push through the loan of me within a few minutes at a discounted interest rate. All I'd have to do is sign the form once he filled it out and he'd give me the keys... I think some of it is down to dealers pushing through loans to get sales and not just the public.

Seth Brundle

I had originally mentioned the lenders.
Lenders were only too quick to approve loans and in the case of loans through a dealer, the dealer got a commission so was only too willing to help the buyer get the loan - in this case the dealer becomes part of what I termed lender. This all was down to poor regulation and enforcement.
However, most of the problem lies with the buyer. Nobody forced them to take out the loans!

Mailman

KBannon, the only point in your last reply to me worth responding to was about Fleet managers negotiating discounts on Fleets. Fleet Managers can't negotiate a discount of any description on VRT. VRT is calculated off the OMSP which is 90% of RRP.
VRT represents up to 36% of the OMSP on which absolutely no discount can be negotiated. As a fleet manager, good luck trying to negotiate a bigger discount with a seller who has to worry about tight cashflow when the Revenue Commissioners come knocking to collect VRT owed.
Of all the examples of a car purchaser to use to champion your position the Fleet Manager is the worst you could have chosen.
Because of the VRT obstacle they can't easily go abroad and negotiate a discount. You'd think that if a fleet manager has to order 12 cars he can afford to hire a transporter to bring them in from abroad. He might be able to arrange the transport and find a supplier willing to sell him the cars he wants but VRT is still based on an OMSP equal to 90% of RRP.
In other European countries a bulk purchaser could easily negotiate discounts of 30% off RRP. I remember reading that Rental Car companies in the UK used to be able to purchase for between 40 and 50% below RRP. VRT here still gets calculated off OMSP at 90% of RRP which was set by the local distributor.
Now that's a barrier to trade and that's why the E.U. Commission is involved.

Owen

Mailman wrote: »

I remember reading that Rental Car companies in the UK used to be able to purchase for between 40 and 50% below RRP.

I don't believe those figures for a second. Provide a source if you're going to flout that type of discount around.

Mailman

It was about 8 to 10 years ago when retail prices in the UK were high. AVIS/Hertz and the very major fleets could go to Ford and negotiate 40% off RRP without problems.

Owen

That's not a source.

Mailman

PaintDoctor wrote: »

That's not a source.

F*ck off. I've provided more actual facts to this thread than anyone else in the thread and my life doesn't revolve around this thread.

-Chris-

Mailman, that attitude stinks. Reign it in please!

Guy:Incognito

Mailman wrote: »

F*ck off. I've provided more actual facts to this thread than anyone else in the thread and my life doesn't revolve around this thread.

Providind a few backed up facts doesnt mean you get a freebie on some erroneous info you decide to throw in.

Mailman

-Chris- wrote: »

Mailman, that attitude stinks. Reign it in please!

unsubscribing from this thread. PaintDoctor has been around this Forum enough to know that discounts not far from this to this have been offered to Fleet Managers locally on slow moving stock from the likes of SAAB yet still challenges the point that are readily available from distressed sellers EU wide. Yet, I'm the one who receives the infraction.
Talk shop. Hot air and nothing else to be seen here. Moving on.

fischer

PaintDoctor wrote: »

I don't believe those figures for a second. Provide a source if you're going to flout that type of discount around.

Hi Ned - I'm not sure it qualifies as a source but if you google "BSM vauxhall deal" (without the quotes), you'll see plenty of mentions of "Free" or really cheap cars going to BSM to drive up Vauxhalls volume and/or monthly figures.

E.g.

http://www.businesscar.co.uk/story.asp?storycode=4004

I remember a number of 40% off list being bandied about when this deal was originally signed but I'm just a bloke on the internet so probably shouldn't be listened to : )

Fischer

Owen

fischer wrote: »

Hi Ned - I'm not sure it qualifies as a source but if you google "BSM vauxhall deal" (without the quotes), you'll see plenty of mentions of "Free" or really cheap cars going to BSM to drive up Vauxhalls volume and/or monthly figures.

That's not really a good example, as it's more of a marketing ploy by Vauxhall to have their cars presented as the ideal learner's drivers car. That's advertising. Interesting though.

Seth Brundle

Mailman wrote: »

KBannon, the only point in your last reply to me worth responding to was about Fleet managers negotiating discounts on Fleets. Fleet Managers can't negotiate a discount of any description on VRT. VRT is calculated off the OMSP which is 90% of RRP.
VRT represents up to 36% of the OMSP on which absolutely no discount can be negotiated. As a fleet manager, good luck trying to negotiate a bigger discount with a seller who has to worry about tight cashflow when the Revenue Commissioners come knocking to collect VRT owed.
Of all the examples of a car purchaser to use to champion your position the Fleet Manager is the worst you could have chosen.
Because of the VRT obstacle they can't easily go abroad and negotiate a discount. You'd think that if a fleet manager has to order 12 cars he can afford to hire a transporter to bring them in from abroad. He might be able to arrange the transport and find a supplier willing to sell him the cars he wants but VRT is still based on an OMSP equal to 90% of RRP.
In other European countries a bulk purchaser could easily negotiate discounts of 30% off RRP. I remember reading that Rental Car companies in the UK used to be able to purchase for between 40 and 50% below RRP. VRT here still gets calculated off OMSP at 90% of RRP which was set by the local distributor.
Now that's a barrier to trade and that's why the E.U. Commission is involved.

You were the one to mention fleet managers. I merely mentioned that they would have more ability to get a discount from a dealer when buying new cars because they are buying in bulk compared to the ordinary person. I never mentioned how much they get off. I never mentioned that they get a VRT reduction.
If I rang |Ford now and said that I want the following:
10 Fiestas
10 Focuses (whats the plural?)
10 Mondeos
Are you serious that they will not give me any form of discount? If I reduce the number to 3 of each will I get a discount?

Biro

PaintDoctor wrote: »

The majority of wealthy people with tens of thousands in the bank borrow for their cars. Very few people pay for new cars with cash.

What I disagree with here is borrowing for a car full stop. I would prefer to see the American way come on board, with Leasing. You lease a car for 2/3 years, the leasing company pays for servicing, tires, tax, repairs, and you have no negative equity should the economy demolish the residual value of cars.

I know they do, and I think it's stupid. The fact that you get a better credit rating for not having the money to buy something outright than you would if you borrowed for it is what has the economy the way it is.
Besides, the car costs you far more when you borrow for it.
And I don't like the leasing system at all, I'd never go for it. If you save for your car, buy all or most of it outright, only borrow for a small percentage of it, then if you loose your job you're not without a car and have to start from scratch when you get re-employed.

Owen

Biro wrote: »

I know they do, and I think it's stupid. The fact that you get a better credit rating for not having the money to buy something outright than you would if you borrowed for it is what has the economy the way it is.

Agreed 200%. It is a silly system, but it's the silly system we've made for ourselves.