Used car price change through VAT scheme

Tue, 22 Sep 2009



Car finance news today includes a story that the troubled Irish motor industry will be revamped by a Vat margin scheme. The scheme mirrors similar initiatives in the EU motor industry and will be introduced early next year. Car dealers will be helped to shift their stock of second-hand cars .

The Irish car market is in trouble, with sales of new cars falling by two thirds this year. Meanwhile, car dealers are facing ever greater financial pressures. The Scheme will allow dealers to pay VAT only on their profit margin rather than the total cost of the sale.

The move should allow car dealers to reduce the price of their cars, and will hopefully lead to a greater number of vehicle sales. The scheme has been in place in the EU since 1994, but the strong Irish car market at the time kept them out of it. The industry is calling for a car scrappage scheme similar to that currently effective in the UK.
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