Should I buy go for cheaper tax bracket or not??!

walshmeister

I have about 8500 cash and looking to buy a diesel car at the moment.

I have been looking at '08 golfs/passats in the cheap tax bracket but now I am questioning whether I should forget about the cheap tax..

I can get a 2006/2007 for up to 2k cheaper and they are much more readily available.

My question is am I mad buying an '08 to save on tax, what if the bands change at the budget.

Any advice is greatly appreciated!

Rob

mickdw

All else being equal, the newer car is worth more anyway regardless of tax costs. When you then consider that the 08 will save you circa 300 to 400 per year on tax, I think the 08 for 2000 extra is a reasonable purchase. Resale is not going to be a massive consideration as the figures will be quite low if you keep it a few years but no doubt the 08 will always be worth alittle more.
While the tax bands are closing up slowly, I dont see any massive changes coming that would suddenly mean you would have cheaper tax on the 07.
Much more importantly, if looking at the passat, the early versions, 05, 06 had more issues than 08 so that would be a key point in my decision more than tax costs.

djimi

Work out what the car will cost you to buy 08 compared to 07, work out the difference in tax between the two, decide how long you want to keep it for and you will have your answer as to whether it is worth the extra purchase price compared to expected savings!

colm_mcm

Any 08 passats for €8500 will be on the rough/dodgy side

walshmeister

Ok thanks for all the advice. Makes sense to go with the '08. Now all I have do is try get a few more quid than €8500 together!

Idbatterim

If you are borrowing the money, the extra interest on newer car will probably wipe out a lot of the tax savings... Id say wait till the budget on the 15th and see what happens...

Scortho

I'd wait until after the budget in 2 weeks time.
I've a sneaky suspicion that they'll do something in relation to the emissions scheme along the lines of how long it's valid for.
They wont do it to new cars, as it could damage new car sales, but making the cheap tax valid for the first four years of ownership would make sense. Bringing them all onto the one system would make more sense but that's for a different discussion.
Problem for the government is that you've at least 400000 cars paying tax at significantly lower rates than you did back in 2008.

bazz26

Scortho wrote: »

I'd wait until after the budget in 2 weeks time.
I've a sneaky suspicion that they'll do something in relation to the emissions scheme along the lines of how long it's valid for.
They wont do it to new cars, as it could damage new car sales, but making the cheap tax valid for the first four years of ownership would make sense. Bringing them all onto the one system would make more sense but that's for a different discussion.
Problem for the government is that you've at least 400000 cars paying tax at significantly lower rates than you did back in 2008.

I cannot see how that would gain anything really other than widening the gap between those who can afford cheaper taxed cars and those who cannot, it just means more people will discard cars before the cheap tax timeline expires. The two tier system would still be there except the rules will have changed.

Idbatterim

I wouldnt be totally shocked if they leave the CC rates as is and maybe just increase the emissions based ones...

bazz26

No tax rates will be left untouched imo. The percentage of increase might be higher on the Co2 rates however. If they don't increase motor tax rates then they will take it from somewhere else like income tax. The only tax I can see them not touching is the corporate tax rate.

Scortho

bazz26 wrote: »

I cannot see how that would gain anything really other than widening the gap between those who can afford cheaper taxed cars and those who cannot, it just means more people will discard cars before the cheap tax timeline expires. The two tier system would still be there except the rules will have changed.

The biggest problem facing the government is balancing expenditure with revenue.

Each year, the number of cars on the CO2 system falls as they are scrapped and replaced with newer vehicles (person with a 95 car sells it for scrap and buys a 99, person with 99 buys a 2005 and person with 2005 buys 2008 and person with 2008 buys 132 etc).
In order to keep the same % of cars on the old rate they have to
A)change the rules and bring more cars under the cc system
increase co2 rates. The rates on cc are high as it is and it will discourage people from paying.

By giving a 4 year time limit, it still incentivises people who'd buy new cars, to keep buying new cars as they'd be paying "cheap tax" still.
This all stems from a short sighted move made back in 2007.
They can't bring all cars into emissions based tax, as this hits those who can't afford newer cars disproportionally.

The government don't really care if you can afford to buy new, all they care about is that new cars are registered and motor tax either goes up or stats the same.
They don't care that a person who can go out and buy a brand new 520d pays a lot less tax than someone who owns a car 1/20th of its cost.
If they did motor tax would be progressive and be on the value of the car.

Wheres My ForkandKnife

Scortho wrote: »

I'd wait until after the budget in 2 weeks time.
I've a sneaky suspicion that they'll do something in relation to the emissions scheme along the lines of how long it's valid for.
They wont do it to new cars, as it could damage new car sales, but making the cheap tax valid for the first four years of ownership would make sense. Bringing them all onto the one system would make more sense but that's for a different discussion.
Problem for the government is that you've at least 400000 cars paying tax at significantly lower rates than you did back in 2008.

Every year there are threads here about buying cars at budget time and someone always suggests waiting until after the budget. Why?? It will make NO difference in the long run. If you were to buy a car now and the tax was out you will probably save a few bob taxing it for the year.

Scortho wrote: »

The biggest problem facing the government is balancing expenditure with revenue.

Each year, the number of cars on the CO2 system falls as they are scrapped and replaced with newer vehicles (person with a 95 car sells it for scrap and buys a 99, person with 99 buys a 2005 and person with 2005 buys 2008 and person with 2008 buys 132 etc).
In order to keep the same % of cars on the old rate they have to
A)change the rules and bring more cars under the cc system
increase co2 rates. The rates on cc are high as it is and it will discourage people from paying.

By giving a 4 year time limit, it still incentivises people who'd buy new cars, to keep buying new cars as they'd be paying "cheap tax" still.
This all stems from a short sighted move made back in 2007.
They can't bring all cars into emissions based tax, as this hits those who can't afford newer cars disproportionally.

The government don't really care if you can afford to buy new, all they care about is that new cars are registered and motor tax either goes up or stats the same.
They don't care that a person who can go out and buy a brand new 520d pays a lot less tax than someone who owns a car 1/20th of its cost.
If they did motor tax would be progressive and be on the value of the car.

I read some off the wall ideas on here but this one is really out there. You buy a car on an emmissions based tax system and after four years it reverts to a cc based system or maybe the system changes so that you are under whichever one penalises you more:pac::pac::pac:

I'm sure the government will sort out the differences between the cc and emmissions based tax systems but my guess is that it will be in 2038.

In the meantime I reckon everybodies car tax is only going one way.

To answer the OP's question for €2k I would buy the newer car, all other things being equal.

Scortho

Wheres My ForkandKnife wrote: »

Every year there are threads here about buying cars at budget time and someone always suggests waiting until after the budget. Why?? It will make NO difference in the long run. If you were to buy a car now and the tax was out you will probably save a few bob taxing it for the year.




I read some off the wall ideas on here but this one is really out there. You buy a car on an emmissions based tax system and after four years it reverts to a cc based system or maybe the system changes so that you are under whichever one penalises you more:pac::pac::pac:

I'm sure the government will sort out the differences between the cc and emmissions based tax systems but my guess is that it will be in 2038.

In the meantime I reckon everybodies car tax is only going one way.

To answer the OP's question for €2k I would buy the newer car, all other things being equal.

The only reason why I said wait until after the budget was because the op was taking the cheaper tax into consideration as a reason for buying as he'd be saving on the tax.

Who knows what the gov will do in the budget but for the sake of 2 weeks I'd be waiting just to see where I stood tax wise if it was one of the reasons for buying the 2008 car.

Is it beyond the realms of possibility that something will happen with co2 rates in the near future?
Definitely not. There'll come a stage in the next few years where most of the cars will be on the co2 system.
Without either seriously altering the tax per band, or changing the emission levels of band A, band b etc. revenue from motortax will be seriously down.

walshmeister

Thanks for all advice above.. Will certainly be interesting to see how it ends up in budget.

I have been dealing with M6 motors in ballinasloe and they are sourcing a car. They are bidding for 2008 cheaper tax version. As you say, all things being equal I am better off getting the newer one anyway!

Cheers!