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Anonymous

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Chris Newbigging  says:

Investigation: how the VAT rise affects bikes

It’s tough times for the bike market, and the forthcoming VAT rise looks to be yet another unwelcome price rise. But how will it really affect prices in the showroom? Find a new or used motorcycle for sale The rise from the current rate of 17.5% to 20% comes in to effect from January 1 2010, adding 2.5% of the pre-VAT rise...

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  • Posted 4 years ago (17 November 2010 12:18)

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nobby357

Joined:

Nov 10

Posts: 1

nobby357 says:

Waffle

Bike dealers that are VAT registered may pay more to their suppliers but they get the VAT back and businesses over a certain turnover must be VAT registered by law.

The statement above is therefore misleading because the net effect of the dealer to supplier transaction is zero. It is only the dealer to consumer transaction where the increased VAT has an effect.

This is the usual dealer mumbo jumbo to make us buyers thinking we're getting a deal.

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svdv

Joined:

Sep 10

Posts: 7

svdv says:

Mike

You're misunderstanding what he's saying. £20 isn't the VAT they pay, £20 is the difference between the old VAT and the new VAT rates, so doing the maths that works out at £800 profit for the dealer (£20 is 2.5% of his profit).

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Andy949494

Joined:

Feb 08

Posts: 817

Andy949494 says:

Not a huge rise...

BTW 2.5% of £10000 = £250 so its not a huge amount on a typical bike - much less than Yamahas price rises this year for example...

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chmer20

Joined:

Oct 09

Posts: 90

chmer20 says:

japanese price rises

a lot of the rises in price for the japanese brands is due to the increase in value of the yen vs other world currencies (British pound, Euro, US dollar). and with interest rates in Japan at 0.00% already and inflation rate is still in the negatives, prices will most likely only go up. I see a lot of complaining about price increases for the japanese brands and thought i'd add my observations.....yeah, i know global economics is boring but it does explain some things.

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anyonebutmurray

Joined:

Jan 10

Posts: 46

So What?

I suspect that there is a natural price, over which a majority, but not all, customers will not go. I suggest that price is £9,000. So £250  on top is neither here nor there - too many bikes are too expensive and with fewer new riders coming in on the ground floor, motorcycle retailing is in big trouble!

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antimagneto

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Jun 09

Posts: 123

antimagneto says:

The used bike VAT scheme

OK, dealer pays £1000 for a used bike. Sells it for £2000. Pays £148.93 VAT. Unless he's working from home off ebay in which case he pays fuck all. The dealer, however may buy a bike for £1000, sell it for £2000 (Extreme rarity I may add) and having spent £1000 on it to make it saleable and safe makes nowt you may conclude? No, a £148.93 loss, paid straight to the good old Revenue. Prep cost is irrelevant. A 25% gross margin, tops, is more realistic btw. Ever wondered why Procter & Gamble, Tesco, BAE, British Gas, Rio Tinto Zinc etc don't sell bikes for a living? Now you know. Mind, if they all had garages and sold off ebay while claiming disability - part funded by the legitimate bike trade's VAT payments they might be tempted...

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antimagneto

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Jun 09

Posts: 123

antimagneto says:

Sorry

Having re-read the 'Honda Dealers' comments I can't stop now. He would reclaim the VAT at whatever rate on purchases no matter what. The customer, however, is expected to pay the extra 2.5%. If, instead, the dealer absorbs this it comes straight out of his margin, which may, you may all be surprised to discover, be only 10% to start with. When this time has passed, look forward to far fewer dealers, more travelling and higher prices. And pray you don't have a bike problem - ebay/the internet traders can't fix intermittent misfires online....or do much else other than have your pants down - try this sir, by the way, it's not returnable.

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tman39a

Joined:

Mar 08

Posts: 118

tman39a says:

Pricing

I wouldn't believe that dealer for 1 second......if the new prices rise for whatever reason the 2nd hand market tends to go with it as well...i've seen 4 year old 125 bikes selling for what they cost in 06' simply because the new model is £1000 more. Also dealers are bit by bit offering close to nothing for used bikes at trade in and then whacking a huge mark up on them...you then have to barter them back down to a realistic price. I had an 03 Tuono with low miles and extras fitted and was offered £1700 whilst they had an identical bike in another branch at £3995.....its getting silly...over £10,000 for a decent bike...no way they cost that to make...at least a £10,000 car has physical size and equipment  to account for the cost.

This tax rise whilst small will only discourage me further from buying another bike any time soon especially when I will have 2.5% less spare money as the tax rise impacts everything you buy.

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STRESSED1

Joined:

Feb 10

Posts: 367

STRESSED1 says:

TMAN39A.......ANSWER

Just been reading some respnses to this debate and in particular TMAN39A comments.

If you go to a dealers and offer your pride and joy for sale because you're desperate for money(and believe me in the next 2-3 years people will be selling their blood)say a two year old R6 with 6000 on clock mint original condition you may be offered say £3000.Now then, you argue as its mint,service history,top of the range alarm system,you'd like at least, as its worth it £4000.

The dealer as they know only too well you're desperate(otherwise you wouldn't be standing there)comes out with the old spin,well times are hard,overheads,the little trade prices book and the i've gotta make a profit s***.

You either take what is offered,sell private or keep the bike and lose more money.So,you sell the bike(as you need the cash asap) and the next week the dealer has got it marked up at £4,795.

Its what you call MANIPULATIVE EXTORTION,in other words take it or leave it,you need the money and i know it pal.They don't just want £500 profit but £1500 at least.

Its the same with all this crap about the exchange rates system.NO,its too con us, the public into thinking prices have too go up because of the DIRE GLOBAL RECESSIVE SITUATION.:lol:

Really its one big con because the economists having the knowledge which we don't have, they decide too add not just the increased rates dictated but an un-realistic mark up price on top!!!(SQUEEZE THEM,TIL' THEY BLEED THEY'LL TAKE IT THEY ALWAYS DO!!!):mad:

I mean in January a BMW 1000RR costing £11,300 otr will have at least £400 added due to the VAT hike rise.I mean that is extortion as the bike is already outta most people's budgets anyway!!!:wacko:

When is it going to end?Not until the public get together and stop buying that's when.If everyone would only grit their teeth and ride out the storm,these so called manufacturers would feel the pinch long before us!

Its not just the bike/car industry that will feel the pinch but every sector,Why do you think the likes of DIXONS,CURRY'S,ETC are slashing prices on tv's,p,c's,etc because thay know with not just x-mas coming up(people getting into as much debt as the idiots can) the inevitable VAT rise is looming and its better too sell now and get as much stock outta the way as next year the economy is going too slow RIGHT DOWN and they wil be left with surplus stock.

Still,there's always the NOUVEAU RICH who love the likes of the CONDEMOLISHERS IN GOVERNMENT giving the poor a good beating (and then some) who will have money coming outta their a**** who buy because its their purpose in life.Its these idiots who keep prices high and ruin it for everyone else.No wonder manufacturers charge what they want.

In summary as long as we put up with extortionate prices,TAX-VATrises,wage cuts,being told that's your lot in life,its only going to get worse.People are going through the can't see the forest for the trees syndrome.:sunglasses:

[This Reply has been modified by the Author]

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antimagneto

Joined:

Jun 09

Posts: 123

antimagneto says:

Manipulative extortion?

What bollocks. How come Tesco et al don't sell bikes - too lucrative for them? And what good sense to offer a distinctly 'summer' hypersport bike for sale in November? Manipulative extortion is forcing British dairy farmers to sell their milk at a loss, while importing it from abroad. It's British Gas putting up prices after massive profit rises. It's HSBC putting up their rates despite making £11.1BN interim profit results. And finally, fucking soap powder selling more cause of it's new 'blue formula'...

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