Just brought a car - invoice query

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Thu 18 Jan 2018 16:41
Just brought a car - invoice query - jonnyjjbean

I've agreed to buy a car with a sticker price of £6500 - the garage have offered me £2200 for my PX.

However, on the invoice they have itemised it so the PX is £1900 and the sale price of the car is £6100...

Any reason why they do this? Does it really matter?

My only concern was if I need to return the car for a refund (unlikely but always possible)?

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Thu 18 Jan 2018 16:53
Just brought a car - invoice query - skidpan

Simple maths:

£6500 less £2200 PX leaves balance of £4300

£6100 less £1900 PX leaves balance of £4200

I know which balance I would prefer to pay.

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Thu 18 Jan 2018 17:06
Just brought a car - invoice query - jonnyjjbean

Oops - misquoted the figures.

£6100 car - £1800 PX is what's on the invoice.

Both give a balance of £4300.

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Thu 18 Jan 2018 18:10
Just brought a car - invoice query - Theophilus

Those with experience of trading will be able to give a definitive answer, but I guess its to minimize their tax liability. Presumably £1800 is the "book price" that the vendor will reckon to sell on the car for.

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Thu 18 Jan 2018 18:27
Just brought a car - invoice query - RT

It's to do with the deal;er's VAT accounting - but I don't understand it in detail so can't explain it.

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Thu 18 Jan 2018 18:36
Just brought a car - invoice query - Andrew-T

It's to do with the deal;er's VAT accounting - but I don't understand it in detail so can't explain it.

+1. I believe it's almost standard practice.

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Thu 18 Jan 2018 18:38
Just brought a car - invoice query - Stumblebum

VAT is charged on the profit margin for a second hand car and not the whole price. However VAT is not disclosed to the customer otherwise the customer is then aware of the dealer's profit margin.

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Thu 18 Jan 2018 18:45
Just brought a car - invoice query - daveyjp
There’s enough in the new car to drop the price and still show a decent profit on the sale.

There’s not enough in the part ex at £2,200 to make a profit in the books, so it is reduced.

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Thu 18 Jan 2018 19:05
Just brought a car - invoice query - pd

The thing with margin VAT is that you'll always pay on any profit but you don't get anything back if you make a loss.

Therefore the last thing you want to do is "overbook" a car in. If they pay £2200 and decide it is a dog and send it to auction where it gets £1900 they'll have paid full VAT on the profit of the new car and got nothing back on the loss on the px to compensate.

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Thu 18 Jan 2018 19:27
Just brought a car - invoice query - SLO76
They’re now paying vat on £400 less profit. Depending on whether they retail the trade in they’re then kicking paying tax on any profit on it til later. All just creative accounting.

Edited by SLO76 on 18/01/2018 at 19:28

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