VAT to hasten buying
June 28th, 2010 by Richard Aucock
BRITISH car buyers are pulling forward their new car purchases to avoid next January’s 20 percent VAT rate.
40 percent of people are planning to buy a car in the next year – however, since the budget, many of them are going to now buy more quickly than they were.
Premium dealers could be particularly affected by the trend; surveyors GfK NOP said middle to high earners feel they would be especially driven to dealers.
Mark Durham, automotive expert at GfK NOP, said: ‘The VAT increase will provide a short-term, much-needed lift for the British car industry.
‘Car dealers need to act now to capitalise on this interest, boosting their marketing spend and offering incentives to entice buyers to their dealership.’
Dealers should also note, he adds, that the type of car people will buy is also expected to alter. A quarter of those surveyed say they’ll downsize to smaller cars – to get cheaper insurance premiums.
‘The Budget’s impact on the motor industry will be felt for a long time,’ added Durham.
‘However, longer term, manufacturers and dealers will need to find ways to ensure the market doesn’t dip after the VAT increase, perhaps absorbing the VAT and insurance increases themselves.’
What do you make of these findings?
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