Recent tax decision could drive up prices for Saida car buyers

The autumn tax increase will impact the car trade as the value added tax on cars will increase from 24% to 25.5% in September. This increase could raise the price of a car by hundreds of euros. Major chains and brands have not yet announced how they plan to adjust their prices in response to the tax increase.

As new car purchases are expected to increase, many 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.

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 cars. 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.

In contrast, 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.