Have I got my math right on the below for a fair trade in value?
The garage has to get their slice and pay VAT on a sale, so does it seems reasonable enough to offer €28,000 for a car they could sell for the best part of say €40,000 (given my car's better mileage)?
Is the trade in value quoted against a brand new unregistered car or what? The car they are offering the price on could be pre-registered, demo car etc etc, devaluing it and making your car seem higher value than if you are comparing against a new factory order model of the car.
You bought a car for €31,000 and have an issue with getting 27-28k on a trade in? Am I missing something here? I know second hand cars have increased in price but by 9-10k??
I believe when dealing with a car that is out of the vat system ( not a business car), they only pay vat on the difference between buy in and sale price so your figures would be way off and they would have nowhere near the vat cost you include.
What car is it? Any good selling model is worth more now retail versus retail than 1 year ago so you should be in a pretty good situation but given that you will be paying premium also on your next car, you need to get as much of that value as possible on the trade in.
It seems fair to me but you could potentially get more if you sold it privately. I imagine that would take a long time as most people spending €40k will want to buy from a dealer or on finance, with warranty.
The lower price is the trade off of a trade on. It's not charity and they'd rather not have to put the work into moving a used car.
Dealers are crying out for used cars at the minute so it seems things are the opposite of what they were. They are preferring to do deals with trade ins to keep stock levels up.
It's against a 201 car of the same make but slightly different model.
Not sure where you're getting that I've some issue here. I'm just posting because I'm curious. Nowhere have I made some mad claim that I'm being fleeced or something.
This is the biggest thing that I'm trying to find out. One salesperson claimed they had to pay VAT on the full sale price of my car when they sell it so that takes a massive chunk out of their profit.
I agree. It does seem fair. If the VAT cost isn't accurate though I'd say they are getting a much bigger slice (but again they are entitled to make a profit as they aren't a charity so no issue there). Good point on the private sale. Because of covid I'm just not keen on private sale as I don't fancy god knows who jumping into the car for a test drive.
Just letting you know:
€28,000 purchase price
€40,000 sale price
€12,000 profit margin
23% of €12,000 = €2,250
VAT = €2,250
Profit = €9,750
The above is correct, if trading in a car against another used car, VAT is payable only on the difference between the buy in price and the selling price.
Tell us the make, model and spec of your own car OP, you'll get a much better idea.
How much is it costing to go from 191 to 201
Seems like a poor trade in value whatever way you look at it, in current market where cars move fast off forecourts I think it’s unreasonable for a garage to expect anything above a 10% profit margin. The other poster correctly calculated the vat - the dealer was completely having you on saying they have to pay vat on the full sale amount.
Could be well worth sticking your car up for sale privately for maybe 2k cheaper than the next cheapest similar car - I did this with a more expensive car than yours and sold quickly to a mail dealer