I thought the VAT was included in the price

VAT on cars can be reclaimed by a small group of companies - e.g. Car Rental, Franchises that get "special pricing for demonstrators and special VAT rules"

Normally any UK company cannot reclaim VAT on a car but can get some VAT back on leasing charges. Vans/pick-up trucks etc are different from cars

A son had a pick-up truck at work that was sold for £16K

They got £16,000 & £3,200 VAT back when the pick-up was sold. I know this as my son had a friend who wanted to buy it but found out it was £16K+VAT

They also sold a car to WBAC and got a straight £8,000 back

The extra VAT on the Hyundai looks like a misunderstanding on the VAT on ex-demo cars.

Cars being advertised and sold to retail customers should include VAT.

If you have signed a contract to buy the car this is legally binding. In law the dealer is obliged to sell you the car at the price contracted.

Enforcing this may be difficult if they have made an error and want to back out. You could threaten legal action, citizens advice, local press etc etc - reputational damage could be an issue depending on the dealer.

Enforcing the lower price or a refund through the courts may be somewhat risky, time consuming and stressful. Whether you are prepared to go down this route is an individual choice - personally I would walk, find another car, and give them a reputational hard time.

When I received the invoice after I'd paid the deposit and delivery fee the VAT was added to the purchase price and I was asked to double tap to sign I agreed to this. I've been told this invoice was for them to get the car delivered. They should have kept it to themselves or at least explained what it meant.

I know the delivery fee is insane. Apparently it has recently changed from a flat fee of £99 to going by distance as they have changed their delivery company. It's an ex-demonstrator, so classed as a company car, I don't know if this makes a difference with how the invoice is broken down. I really wanted this particular model and I was finding it difficult getting one in the colour I wanted as a nearly new model. I thought the price with delivery fee (even being excessive) was still a good deal.

The VAT on the invoice is perfectly normal for an ex demo as up to that point no VAT has been paid on the vehicle.

The dealer doesn't pay the VAT on the new car as they are VAT registered so claim it back, but this VAT has to be paid by someone. There is a VAT margin scheme set up for car traders and this will be the VAT shown on the invoice.

If the car had been sold to a private buyer when new the VAT would have been paid by them. If for whatever reason it then ended up back with the dealer after a few months to be sold the price woukd still be £20k, but no VAT on the invoice,

Edited by daveyjp on 17/09/2023 at 08:58