New or used dilemma

Hi all.
Well the decision is made I’m joining you and buying a GS but I have a dilemma

Option 1
BMW management Bike 750Gs Sport 68 plate, 5000miles everything I want apart from the TFT pick up straight away.

Option 2
Same bike but brand new with TFT and low seat but dealer discount £500+750 pcp contribution, vat is almost certainly dropping in the next few weeks Saving another 450 so total savings would be £1700

This means that for only £1800 I get a brand new one which in my world makes it a no brainer, I would have ordered the new one today but there’s a big problem there are none at BMW any where on the system they have no idea when I would get it the sales guy said It could even be next year before I would see it.

What to do????
Thanks

Do you want a bike soon, maybe for a trip or to commute on? If so get the used bike now

If you are waiting until next year then you may have some additional costs as they will have clauses in the small print to allow increases. There are risks with currency and other taxes like import duty if there is no agreement with the EU. Then, BMW might stick up prices to try to recoup their losses due to Covid.

Buy a bike and take delivery now and you know exactly what costs are involved. Presumably the bike will come with a 2 year warranty.

Was the sales man trying to sell you option 1 - have it today sir, no new ones sir........Come on sir..........it’s here now.......

VAT reduction will screw dealer stock...


Ring around two other dealers... tell them what you want as a new bike - see if you get the same answer..

Jako999 said:

Hi all.
Well the decision is made I’m joining you and buying a GS but I have a dilemma

Option 1
BMW management Bike 750Gs Sport 68 plate, 5000miles everything I want apart from the TFT pick up straight away.

Option 2
Same bike but brand new with TFT and low seat but dealer discount £500+750 pcp contribution, vat is almost certainly dropping in the next few weeks Saving another 450 so total savings would be £1700

This means that for only £1800 I get a brand new one which in my world makes it a no brainer, I would have ordered the new one today but there’s a big problem there are none at BMW any where on the system they have no idea when I would get it the sales guy said It could even be next year before I would see it.

What to do????
Thanks

Click to expand...

twizzle said:

VAT reduction will screw dealer stock...

Click to expand...

In what way? On used bikes, new bikes or both?

Vat

Vat is only on brand new items.
Been looking all night and found a couple of other used ones fully loaded with tft but there almost the same price I can get a new one for on 19 plates with 2k miles on them, I have also found an identical bike with only 1k on the clock for £200 less then the one I’m looking at which has 6k miles on but it is miles away and my dealer is only 10 miles away and a really nice guy.
Thanks

wessie said:

In what way? On used bikes, new bikes or both?

Click to expand...

They will have bought bikes to sell at a given margin to new, if all of a sudden a new one is 5% less they will have to accommodate a reduction, they can’t claim back as they only pay VAT on the difference between buy and sale.

Well that’s my view and could be bollocks

Jako999 said:

Vat is only on brand new items.
Been looking all night and found a couple of other used ones fully loaded with tft but there almost the same price I can get a new one for on 19 plates with 2k miles on them, I have also found an identical bike with only 1k on the clock for £200 less then the one I’m looking at which has 6k miles on but it is miles away and my dealer is only 10 miles away and a really nice guy.
Thanks

Click to expand...

The dealer has to pay VAT on the difference between his buy and sell price.... this will be factored in.

twizzle said:

They will have bought bikes to sell at a given margin to new, if all of a sudden a new one is 5% less they will have to accommodate a reduction, they can’t claim back as they only pay VAT on the difference between buy and sale.

Well that’s my view and could be bollocks

Click to expand...

You have not thought it through or are not quite familiar with how VAT works.

If a bike is bought now from BMW by the dealer for £10,000 + VAT then they pay £12,000 now. On their next VAT return they reclaim that £2000 VAT back. VAT returns can be monthly or quarterly. So the dealers net cost for the bike will be £10,000. They can claim this VAT back before selling the bike just like any retailer, plumber etc. They then add their margin to get the net retail price. Let's be generous and give them £5000 so the sales price is £15,000 plus VAT at whatever rate it is on the day of the sale. If they sell the bike today they add 20%, so £3000. If the rate drops to 10% they add £1500. They only hand over that £3000 or £1500 to the tax man which of course, has come out of the customer's pocket. The dealer has not actually paid any VAT out of their own pocket, it has all come from the final buyer as it is a purchase tax which the dealer has administered and collected for the government. It is a very clever system that puts a massive administrative burden on businesses rather than the government.

The big question is, if the VAT rate drops, will the dealers pass any of that saving onto the customer or will they keep the RRP the same as they will get more profit.

I believe there is a separate VAT system for used vehicles, which might be where the confusion lies. I am less familiar with this but it does work on a "VAT paid only on the profit" but it will not screw dealers as again, the VAT actually paid will only be paid by the final customer at the rate prevailing on the day of sale.

An example: a dealer takes a bike in part exchange for £5000, then knocks it out for £6200. Currently they made a net profit of £1000 as the £200 would be VAT. If the VAT rate drops to 10% they can sell the bike for £6100 and still make a £1000 profit.

I think that is how it works and this is the reason why a dealer will inflate your trade in price rather than discount the new bike purchase as it reduces their VAT liability on the used bike profit as well as lowering the pre-tax price for the customer, which means less VAT for the customer.

The vat is a long discussion but the thing what should I do buy the used one or wait it out for a new one but god knows when I would get it?

I have found a used one with the TFT in the spec I want it’s a private sale but as it’s been serviced by bmw I assume the warranty will still be in place. I would rather buy from a dealer but no one has the spec I want.
Thanks

Why is a colour telly a deal breaker? I have 2016 R1200RS and 2016 S1000XR. There are newer versions with TFT but this would not be a factor in whether I upgrade. For the XR, the absence of the white dial rev counter is actually a turn off...

It’s not just the tft the saving on a new one is going to be £1700 that won’t happen again plus 3 years warranty and zero miles. When I up date again in a few years the loss will also be far less.
Thanks