VED changes cause for lost sales

Dealers report VED changes catching customers unawares

Philip Nothard

The Vehicle Excise Duty (VED) supplement introduced on vehicles costing over £40,000 when new is catching some consumers unawares and impacting their attractiveness in the used market according to new research.

In the latest dealer sentiment survey conducted by Manheim, 41% of dealers trading applicable vehicles say they’ve lost a deal due to the £310 supplement, introduced in April 2017, putting customers off.

Almost one in five surveyed say they’ve had to adjust values downwards to compensate for the additional cost. Just 18% report experiencing no impact.

Manheim’s Philip Nothard comments: “£310 may sound like an inconsequential sum in comparison to the outright cost of a premium used vehicle but it’s apparently enough to be a barrier for some buyers. The impact of this is used dealers are having to review how they price and pitch 12-18 month old vehicles that cost over £40k when new, regardless of their value now.

“The issue is coming to the fore as 17 and 67 plate stock is now reaching the used market in significant volumes and it’s likely being amplified by the rising number of buyers opting to fund their used vehicle with a PCP contract. Monthly payments see many buyers stretch themselves to get into a vehicle they once thought unaffordable without factoring in any additional associated costs – and when they suddenly realise they need to find another £310 a year in tax alone, it can be too much to bear.

“With premium brands now accounting for more than a quarter of all new vehicle registrations in the UK, the number of vehicles falling into this VED category is set to increase, and as PCP takes a hold in the used sector, it represents a good growth opportunity for dealers. This sentiment suggests they just need to factor VED into their sales conversations to avoid any unwanted surprises.”

Latest from Cox Automotive

21st January, 2019

Sytner car supermarket division extends its remarketing partnership with Manheim

The Sytner Car Supermarket Division has extended its long-standing remarketing partnership with Manheim for a further two years.

Read more
16th January, 2019

Wholesale demand outstripped supply in December as dealers prepared to hit ground running in q1

Cox Automotive reported high levels of competition for wholesale vehicles in December, driven by dealers’ optimism about consumer demand in the first quarter of 2019.

Read more
10th January, 2019

Dealers report VED changes catching customers unawares

The Vehicle Excise Duty (VED) supplement introduced on vehicles costing over £40,000 when new is catching some consumers unawares and impacting their attractiveness in the used market

Read more
9th January, 2019

Dealers taking stock of 2019 point to positive year ahead

Dealers are looking ahead to a positive 2019 with around two thirds of those surveyed for the latest sentiment survey by NextGear Capital saying they plan to invest in their business.

Read more
More articles