MattN

just been chatting about ex demo cars.

a question came up about VAT.

As I understand it the first keeper pays the VAT in the OTR price. Now if a dealer is the first keeper and the car is a demonstrator, do they claim the VAT back as the car is for 'use'.

When they sell the car they only need to pay VAT on the profit they make,

18k car retail +VAT = 21150

dealer claims back the 31150

sells the ex demo for 20k inc. as an ex demo

the dealer technically paid 21k for the car new thus the profit is negative and no Vat needs to be paid

so they have claimed back 3k sold the car for 20k after running it as an ex demo total 23k. For a 21k car?!?!?!

My understanding is an ex demo car should be cheaper for 2 reasons,

1) It's now a used vehicle
2) The VAT has already been paid and presumbly claimed back and therefore should have at least this amount discounted.

I know used cars have a value of there own etc. And anyone car sell any used car for whatever someone will pay for it because the VAT has been paid in the first sale (dealers have to pay VAT on the profit only in subsequent sales).

Basically what I'm saying is why are ex-demo (USED CARS) so bl00dy expensive!