talk about getting your pants taken down

[wessie]

From HMRC website --
"If you buy a vehicle to sell on, you can reclaim the VAT on your next VAT Return. You must be a VAT-registered motor dealer."

you still have not understood the difference between a purchase of a used vehicle from a private individual and a trade seller in terms of the SALES TAX known as VAT. Only VAT registered companies can charge and reclaim this tax.

e.g. dealer A gives you 5k part ex and then sells it to dealer B for £5k plus VAT just to get rid of it, i.e. £6k. Dealer B, if VAT registered can reclaim the VAT back. Dealer B has effectively bought the bike for £5k net of tax. Dealer B then adds £1200 to the bike and sells it for £6200. Dealer B will need to give one sixth of the profit to the VAT man i.e. £200

If you sold the bike to We Buy any Bike, as a private owner for £6k then they are not able to reclaim any VAT. You are not VAT registered and all of that £6k is your's to keep without handing any tax over to HMRC. WBAB's net purchase price is £6k so they would have to sell the bike for £7200 to make the same profit as Dealer B.

VAT "remaining in the bike" is a fictional concept. Value in the bike is the asset value which can go up or down in relation to supply and demand. So, yes, a new bike does not automatically decrease by one sixth when you ride away. Less common nowadays but it was certainly something seen in the mad days when demand for bikes like the Ducati 916 were in short supply.

 

[pbbanks]

you still have not understood the difference between a purchase of a used vehicle from a private individual and a trade seller in terms of the SALES TAX known as VAT. Only VAT registered companies can charge and reclaim this tax.

Original post was about the part ex of a 1 year old 1250 against against a new 1300.
I assume all BMW dealers are vat registered & most likely keep the bought in 1250 to resell to retail themselves.
Main point is you don't automatically lose the vat value when you buy a new bike.

 

[OnHellas]

Assume most BMW dealers are VAT registered so do claim vat back and then pay it again when sold.

Think the main point was that a new bike isn't automatically devalued by the amount of VAT paid on it if you part exchange it when it's,for example, a year old (which was the age of the bike on the original post). Still has a big loss but that's mainly the commercial price difference between an old model (1250) & the new model (1300).

From HMRC website --
"If you buy a vehicle to sell on, you can reclaim the VAT on your next VAT Return. You must be a VAT-registered motor dealer."

You are misunderstanding that. As a private individual, once you’ve paid the VAT that’s the end of it. It’s gone in to the void that is the national budget.

I explained above the only part of a dealer transaction with a second hand vehicle that attracts VAT.

I too am not an expert in this but I both worked and ran businesses that were VAT registered and bought and sold used motorcycles.

 

[OnHellas]

you still have not understood the difference between a purchase of a used vehicle from a private individual and a trade seller in terms of the SALES TAX known as VAT. Only VAT registered companies can charge and reclaim this tax.

e.g. dealer A gives you 5k part ex and then sells it to dealer B for £5k plus VAT just to get rid of it, i.e. £6k. Dealer B, if VAT registered can reclaim the VAT back. Dealer B has effectively bought the bike for £5k net of tax. Dealer B then adds £1200 to the bike and sells it for £6200. Dealer B will need to give one sixth of the profit to the VAT man i.e. £200

That’s not quite there with the dealer A to dealer B sale.
If dealer A buys a bike for £5k and trades it on to dealer B he does not add VAT.
If he sells the bike for £5200 to dealer B, he, dealer A, has to pay VAT on the £200 markup as part of the VAT Margin Scheme.

When dealer B sells the bike to a retail customer for £6200 he would then pay VAT on his £1000 mark up.

 

[OnHellas]

Original post was about the part ex of a 1 year old 1250 against against a new 1300.
I assume all BMW dealers are vat registered & most likely keep the bought in 1250 to resell to retail themselves.
Main point is you don't automatically lose the vat value when you buy a new bike.

OK, as an exercise (obviously you don’t have to do this) tell us the deal that you were hoping for.

As a point of fact the VAT has gone, paid, finished, no longer part of the value of your bike.
However, the retail value of a very late used bike may be more than the price of a new bike minus the VAT. But it would be highly unlikely that its trade in value would be.

 

[RedRick Esq.]

Assume most BMW dealers are VAT registered so do claim vat back and then pay it again when sold.

Think the main point was that a new bike isn't automatically devalued by the amount of VAT paid on it if you part exchange it when it's,for example, a year old (which was the age of the bike on the original post). Still has a big loss but that's mainly the commercial price difference between an old model (1250) & the new model (1300).

From HMRC website --
"If you buy a vehicle to sell on, you can reclaim the VAT on your next VAT Return. You must be a VAT-registered motor dealer."

Original post was about the part ex of a 1 year old 1250 against against a new 1300.
I assume all BMW dealers are vat registered & most likely keep the bought in 1250 to resell to retail themselves.
Main point is you don't automatically lose the vat value when you buy a new bike.

you have to look at how a new vehicle gets to its final sale price

basic cost plus tax plus delivery cost plus first registration fee - Only then is the VAT added on -have a look at an invoice for a new bike

So the way discounts are worked by a dealer out is only on the basic cost before any of the taxes and add ons are put on so in effect the VAT to a private buyer is lost

 

[G&T]

Through experience as a bike owner this has been my rule of thumb. On a GS/A for example they have lost £2k per year from new.

...but gained me a whole heap of fun.

 

[pbbanks]

OK, as an exercise (obviously you don’t have to do this) tell us the deal that you were hoping for.

As a point of fact the VAT has gone, paid, finished, no longer part of the value of your bike.
However, the retail value of a very late used bike may be more than the price of a new bike minus the VAT. But it would be highly unlikely that its trade in value would be.

Think this is all getting out of hand .
I'm not hoping for any deal.
The point was raised that the value of a part ex was reached by deducting all the vat , all the dealer costs of running a showroom, costs of coffee etc. etc.

 

[HGS]

Excluding any VAT issues, generally the PX prices offered by BMW Motarrad dealers are appalling. WBAB are even worse
I get that the BMW Dealer has great overheads but money is made on the sale, and the servicing possibly. I can see what BMW dealers are retailing similar bikes to mine
and there is a 2.5 to 3k mark up for a bike with 12 months of warranty still on it.
They sell premium priced products but are now a bit greedy with the PX deals.
I feel PCP has brought this on as the 2nd market is saturated.
A lot of motorcycle dealers take the part ex and the cost is covered by finance until the bike is further sold, so maybe another cost for them.
I was going for a new 1300gs but the cost to change is too much. I have no finance and won't take a PCP so for me, I will stick with what I have...or win the premium bonds.

 

[OnHellas]

Think this is all getting out of hand .
I'm not hoping for any deal.
The point was raised that the value of a part ex was reached by deducting all the vat , all the dealer costs of running a showroom, costs of coffee etc. etc.

Sorry , I’m not trying to be a twat…I don’t have to try…

The main elements of reaching a part exchange value are…what do we think that it will sell for, what are the costs involved getting it ready for sale and business running costs.

On top of that there is dealer cash flow, stock levels and of course do they actually want your bike. How is their stock paid for. Dealers quite often have a stocking plan, in effect finance to pay for their used stock….anyway, I think I’m drifting back in to twat territory again.

 

[pbbanks]

Sorry , I’m not trying to be a twat…I don’t have to try…

The main elements of reaching a part exchange value are…what do we think that it will sell for, what are the costs involved getting it ready for sale and business running costs.

On top of that there is dealer cash flow, stock levels and of course do they actually want your bike. How is their stock paid for. Dealers quite often have a stocking plan, in effect finance to pay for their used stock….anyway, I think I’m drifting back in to twat territory again.

you're not being a twat at all.

I think we have to accept times have changed and if we want a new bike with 3 year warranty and all the electronic gizmos then we have to pay for it. For those who don't want to pay new prices there are very good 2nd hand bikes out there.

 

[Neil W]

To qualify to sell a used bike with a BMW Approved Used Warranty the dealer has to pay BMW £500 up front to cover the 2 year warranty unless they were C##pers Sunderland and just did not bother

 

[Flappytabs]

 

[peepingtom]

so out of interest how much do you think you would have to pay to get the new model ?

 

[The Other PaulG]

Putting the VAT aside for a moment.... how else could you spend the £10k, rather than on the part-ex deal?

CF Moto 450 MT at about £5.5k, maybe something like a nice old airhead for £3k, £1.5k left for costs of doing bits of the TET, or whatever, on the CF. And in 2 years the old airhead will still be worth £3k.

 

[Frankh]

Through experience as a bike owner this has been my rule of thumb. On a GS/A for example they have lost £2k per year from new.

...but gained me a whole heap of fun.

I think that is about right if you keep the bike for 4 or 5 years, but if you keep it for only one not so good

 

[theop]

so i thought i would make the tentative call,i have as a part ex ,2023 r1250gsa trophy ,full luggage ,fsh ,7.5 thousand miles bike is paid for and is in mint condition.
well i would like a r1300gsa te ,triple black ,enduro wheels (alloys in other words) full luggage in black and the base plate for the top box
how much to change ,well sir that will be a few quid under ten grand to change
WHAT i says .how many are they going to sell.not many i think.

Sounds about right in my book… decent even.
The new one you want (similar to me) is about £23k and change - just specced one last night.
They are offering you 13k for yours which sounds fair, given there are 4 dozen on autotrader right now with under 5k miles for 16ish, and some dealers offer new ones with kickbacks and 3%pcp which mark them down to 18ish. So 13 to you, they need to make 2-3k for the bother and liquidity they provide, 16 out…
I would take that offer sharpish if you want a new one, or privately put it for 16 and hope winter does not come early. You do have the best colour though and brembo brakes. Why not keep it for 2 more years and get a model year 3 colour down the line, when the product testing has also been completed by the first customers?

 

[Jer]

I have 2016 1200GS Tripple black and I test rode the new r1300GS the other day, I did like it but nothing was exceptionally better, I thought everything was only a little bit better, I think I was expecting more. Anyway I spoke to the dealer and asked what I would get as a trade in for my bike, it has full BMW service history, but it’s on 54k. First offer was £1000, then later said maybe up to £2000 with all luggage and Acro can. I was expecting a bit more, even knowing it would just be sent off to auction.

 

[Santa-2512]

I have 2016 1200GS Tripple black and I test rode the new r1300GS the other day, I did like it but nothing was exceptionally better, I thought everything was only a little bit better, I think I was expecting more. Anyway I spoke to the dealer and asked what I would get as a trade in for my bike, it has full BMW service history, but it’s on 54k. First offer was £1000, then later said maybe up to £2000 with all luggage and Acro can. I was expecting a bit more, even knowing it would just be sent off to auction.

Wow, i got 4k from a trader last year for my 2016 with 40k on the clock, i paid 8.5k. 3 years earlier

The trader stuck it up for 7.9k. And took 7k in the end

 

[leadfarmer]

I have 2016 1200GS Tripple black and I test rode the new r1300GS the other day, I did like it but nothing was exceptionally better, I thought everything was only a little bit better, I think I was expecting more. Anyway I spoke to the dealer and asked what I would get as a trade in for my bike, it has full BMW service history, but it’s on 54k. First offer was £1000, then later said maybe up to £2000 with all luggage and Acro can. I was expecting a bit more, even knowing it would just be sent off to auction.

Bejeesus, they obviously don’t want it, that seems ridiculously low even with a few miles on it

Sell it privately and/or find another dealer