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Fri
Jun 06 2008

Going, going, gone?

James Ruppert

Despite the fact that I bought a very old car last month and will be giving away an even older car this month in order to stimulate the UK economy in general and the car market in particular, I have not managed to halt the general slump.  

As you’ve undoubtedly read in our news section car sales are down and I’m surprised that anyone is remotely surprised that this has occurred. It’s the economy, stupid. And it’s also the Government’s fault for trying to impose some of the most ill-considered bits of motoring taxation in living memory.

Because here’s the big problem: if you punish somebody with a whopping increase in taxation they’ll make certain-sure they don’t fall into the same trap again. Hence the madness of the decision to impose punitive taxation on cars registered since 2001 that people have bought and committed their motoring futures to with no knowledge of what was to befall them.

People are going to be very careful about buying anything with four wheels if they’re going to be persecuted for making the ‘wrong’ decision again.

For the last year my friends who still spend their lives in car showrooms have been saying that they are all doomed - and so it may come to pass. The car trade is a surprisingly fragile ecosystem, and one that relies on a constant stream of business and private custom at all levels.

That is drying up. And many dealers – with the gleaming tiles, coffee machines and potted plants to support – are finding themselves on shaky ground. Don’t be surprised if we start to see boarded-up car showrooms next.

In the meantime the British car buyer is going on strike and who can blame them?

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About James Ruppert

Used to sell BMWs, but he's no yuppie; has a '64 Mini Cooper in his garage and a '57 BSA Bantam in his house. Has bought and sold hundreds of used cars, and he isn't finished yet.

Comments

lukemedway June 7, 2008 12:38 AM

Well can't argue with this article! I wonder if Gordon Brown will make another of his trademark U-Turns on these tax updates... Well we can only hope I guess!

keeforelli June 7, 2008 7:53 AM

shame on you james ruppert for catastrophising-

need consumer confidence is what keeps big tivket items selling and this is slowly being eroded by a media seemingly obsessed with talking us into a recession of our own making....car sales have been remarkably

resilient- why not tell us how to get the best tax efficient deals out of the dealers?....and do you REALLY think we are going to see anyone boarded up?......sensationalism at best......  

kerrecoe June 7, 2008 11:45 AM

Are you a car dealer keeforelli? The media certainly is guilty of sensationalising everything they can get their hands on to sell just one more issue or improve ratings- even those that should covet our trust betray it nonetheless (BBC anybody?).

So, I agree with the point you are making in general, but I don't think it is fair to say that the media, or poor old James Ruppert himself, has created an imaginary tax burden on an already significantly overburdened nation. I think you'll find that things are incredibly tough in the showrooms, as they are in the Estate Agents and the white goods stores and the middle-class department stores.

Sorry for calling you 'old' James!

keeforelli June 7, 2008 2:58 PM

hi kerrecoe

no im not a car dealer but a manager in the retail sector- bicester village- high end branded products at a great price- so i do have sharp end experience of the way things are going.  

People are looking for value but still spending and still want nice things- my sales lift yr on yr and i see a car park stuffed with 08 plates from cayennes every 2nd parking space to a few bentley continentals-

if you have the right product in the right place and at the right price you will sell it..

tax is being used to change behaviour and create revenue- on car taxation where the line is drawn i dont know- but the sensible thing to do at the mo is downsize and lower your tax and fuel costs-

i think autocar needs to tell people how and where and what are the best ways of doing this- there is STILL no recession- but confidence if eroded will take us there...

lets not!!!..thats my bonus gone!!!..and my staffs...!!!..and every other sector save the public one...(which is what we are all paying for anyway!!!!)

TheBigUnit June 7, 2008 8:43 PM

keeforelli,

What planet are you on? Do you think that the people who are driving the Porsches and Bentleys that litter your car park, and pushing your sales up, are the people who are being put into financial peril by the present economic situation?

Read James' original post again? Who generally runs used cars? Those who cannot afford a car with an '08 plate'. So when the government starts to raise taxation on older vehicles it stretches the purse strings of those individuals already suffering with rising energy bills, food prices and of course fuel prices.

Downsize? How? If they cannot find a buyer for their vehicle, how will they afford another. Public transport? Well, we are not a nation of city dwellers, despite the government's best efforts to persuade us otherwise, and for many the car remains the ONLY way to deliver children to school, pick up the shopping, and contribute to the economy by going to work.

Remember, if a suit that costs £500 elsewhere costs £200 in your store, it still costs £200. £200 will mean different things to you and me, and it will mean very different things to one of your Cayenne driving customers and someone unable to tax their Mondeo.

keeforelli June 7, 2008 11:04 PM

thebigunit- i dont live in some parallel universe- i personally feel the cost of what is going on-

i think the tax changes affecting old cars will be scrapped in light of current events......but the economic situation is a worldwide one tied into our own governments (and many others...green crusade...(or pure revenue raising as it more likely is...but we have a labour government that has forgotten its roots... and it is hurting its core voter the hardest...but it will pay at the polls...

my point being that our economy needs the people that CAN spend...not to be scared into not doing that..if we are squeaking now what will it be like if unemployment hits 3m again?...and car sales fall massively?....and the whole vicious circle kicks off?....consumer confidence in our consumer driven economy is everything.......i have a great deal of customers who are just like every one else- and maybe..just maybe they dont want bad news rammed down their throat at every opportunity...

the only good that can come from this sentiment is if the government help the people this hurts the most...and increasing tax on older cars is one thing that could and i guess will be scrapped or postponed- but at some point i believe governments worldwide will tax us out of our vehicles..... if fuel prices dont first..

this will end up changing our behavior one way or another....what ever government we vote in to stop this process....but it most definitely could be done in a fairer way...

my point about the car park where i work being full of nice cars is its a barometer....we are SO much better off as a nation that in say 1991s recession...or in the last fuel crisis in the 70s,  that we need to get things in perspective....

employment is high....we still have a growing economy...but the government needs to listen and to help those that need it to live their everyday life....(and i cant personally afford to change my own car to lower my tax liability either....)

keeforelli June 7, 2008 11:13 PM

having just re read James Rupperts post i can see i have gone on a tangent..so apologies for that....but i stand by my views of the current situation.....

But it is grossly unfair to tax people out of vehicles they already have rather than tax at the point of new purchases to influence greener choices...

if you click onto question time on the BBC website from Thursday you

will see a cringing foreign secretary struggling to defend this policy during quite a long debate on the subject..and this tax has been likened to the poll tax....so it may well be Browns downfall...we will see....

kerrecoe June 8, 2008 3:33 PM

Let's hope so Keeforelli. The trouble is- the alternative doesn't exactly fill me with confidence either- the last thing this country is yet another sloppy wannabe-Blairite, whatever the colour of his tie.

BTW, I'm in the middle of a house purchase and I was able to haggle reasonably hard for that and I'm confident that I wont regret the decision over the medium term. However, I'm also attempting to change two cars at the moment. I've been to several dealerships already and have hit brick walls (figuratively speaking) with obtaining any kind of good deal, so in my experience, it is not a buyers market. We will end up sticking with the cars we have already at this rate. I'd have thought the dealers would be fighting over my custom but they might as well just lock the doors to the showroom. Figure that?

keeforelli June 8, 2008 5:12 PM

kerrecoe-  it doesnt figure does it!!!

what were you trying to buy?.....premium?...or a regular brand?....

ThwartedEfforts June 9, 2008 10:10 AM

Buyers are also realising just how deeply the government has been shafting them. For example, since the introduction of CO2-specific tax bands favouring diesel engines, our diesel duty rates have climbed to double those in the rest of Europe. Double.

The obsession with CO2 has also meant that demand for petrol cars is falling at a distressing rate, with the values of second-hand examples losing thousands every month. Even small and broadly economical petrols are losing out: a Mercedes A150 Classic SE was worth £9,000 trade at the beginning of May, and now it's worth £8,000. That's S-Class-style depreciation.

I'd not want to be a car supermarket, with thousands of similar vehicles ticking away their value every day they're not sold. Because they're not selling.

coolGav June 9, 2008 12:32 PM

It does seem to be impossible to plan what kind of car will be best for peoples circumstances. The trend towards diesel started by the CO2 taxation, coupled with better economy and seemingly high fuel prices has now led to significantly higher diesel fuel price, and as ThwartedEfforts says (I haven't checked it out myself), prices of second hand petrol engined cars are taking a battering.

So, as the price of diesel rises way above petrol, the better fuel economy percentage a diesel car has to achieve to stay cheaper to run than petrol must be higher. For some owners, diesel is now a white elephant - which should result in some owners switching back to petrol when they change cars. Assuming they're not getting cars with monstrous CO2 tax bills!

James Ruppert June 9, 2008 5:22 PM

Crisis what crisis? I think there is one and I am glad that most of you agree...It is all a big giant mess too, but this government or any other doesn't really have the intelligence to sort it out. I don't think they see ac crises just a lot more revenue coming in. I mean if they created the push bike pedalling utopia, quite where the money to keep the country is going to come from? Happy days.

kerrecoe June 9, 2008 6:57 PM

keeforelli-

I was trying to change a 2year old Grande Punto Sporting for a 500 Lounge. Fiat to Fiat. Obviously the 500 is selling so fast they don't actually need anymore buyers?

kerrecoe June 9, 2008 6:58 PM

James-

It is all about revenue, you're right. We are not citizens anymore- just bank accounts to plunder.

Paddler Ed June 9, 2008 7:05 PM

But if you go onto the BBC website you will see that the crunch is already hitting dealers; the Renault Dealer in Newbury (which has been in the same location for 20+ yrs) has just gone into administration

news.bbc.co.uk/.../7441581.stm

So it is already hitting.

I'm looking at changing my 2000MY Volvo V70 to something a bit newer (Ideally another V70) but am loath to do something that might cost me another £200pa in VED alone (if I end up with an auto)  Is that really an incentive?

Also because of this fixation on CO2 we're missing out on the efficient cars for NOx emissions (bluetec and blue motion) because they get hammered by CO2.

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