The upcoming autumn tax increase could have a significant impact on the car trade, as the value-added tax (VAT) on cars will rise from 24% to 25.5% in September. This hike could result in an additional cost of hundreds of euros for most basic cars and even more for special models.
With new car purchases expected to increase, buyers are hesitant to commit due to potential price hikes. Additionally, punitive tariffs imposed by the EU on Chinese electric cars could further impact prices. The general VAT increase will affect all new cars in the autumn, with major chains and brands yet to announce how they plan to adjust their prices in response.
If the tax increase is directly transferred to prices, it could result in an additional cost of a few hundred euros for most basic cars and even more for special models. Purchasing a car before the end of August can help avoid this increase, something the automotive industry is keen on promoting.
Despite potential price fluctuations, delivery times for new cars have improved, with most manufacturers able to predict delivery times accurately. Advance invoicing is also an option to lock in prices before the tax increase takes effect.
On the other hand, used car prices are not as affected by the tax increase, as dealerships only pay tax on their profit margin. However, prices may still fluctuate based on how the EU tariffs impact new car prices. It’s important to consider the broader implications of the tax increase, as every tax euro goes towards supporting the state’s finances.
In summary, while new car buyers may face higher costs due to the VAT increase and punitive tariffs on Chinese electric cars, used car buyers are less likely to be affected. It’s essential for both new and used car buyers to consider their options carefully and make informed decisions based on market trends and industry insights.
