Top 10 tips for motorists to beat the VAT riseFollow our guide to avoid paying 20% VAT
13 December 2010
With VAT going up to 20% from 1 January, is there anything us motorists can do now to beat the 2.5% increase to save some money?
According to a recent survey by uSwitch, 37% of customers are purchasing goods now ahead of the VAT rise. So what should car owners be thinking about to battle the hike in VAT?
Here are our top 10 tips for how to beat the VAT increase, now and next year.
Top tips: how to beat the VAT rise
1. Have your car serviced now
Ideally you should have already had your car serviced or at least had a winter car check, with the conditions changing and roads becoming more hazardous. If not, getting your service done before the VAT rise on 1 January could save you a money, especially if your car is due a major service.
2. Buy your tyres now
If your tyres will need replacement in the coming weeks, or even the next two months, it might be worth bringing forward your purchase of some new rubber. Replacing all four tyres can be a fairly costly affair, but it is worth factoring the cost into your budget before the end of the year, even if you don’t get them fitted until 2011.
3. Buy a used car
If you’re looking to buy a new car next year, you may want to consider buying used instead of new. If you buy privately, you won't pay VAT. And motor traders can either charge VAT only on the profit they make on the car or on the total transaction – it is definitely worth pushing them to do the former.
4. Find new car deals that exclude VAT
Many manufacturers are using the VAT rise as a sales tool, knocking the current 17.5% cost of VAT off the price of cars ordered and registered before the end of the year. Skoda, Renault and Seat are all taking part in non-VAT offers (all subject to status). These deals end on 31 December, although some other carmakers, including Land Rover, are offering no VAT on models ordered before December 31 rather than a combined ordered and registered deal.
5. Haggle over a VAT deal
If you’re buying a car, used or new, it is definitely worth haggling with the dealer to get them to absorb the VAT. The VAT dealers pay to the HMRC doesn’t have to come from charges from customers, so it is worth trying to bargain the cost of VAT off to guarantee them a quick sale. Some dealers may be offering VAT-off deals after January, so they'll be worth looking out for.
6. Pay a bigger deposit on a car now
If you are buying a car in the New Year, paying the deposit now will qualify that payment for the current VAT rate. However, the rest of the purchase, if carried out in 2011, will be at the higher 20% rate. So, if you can stretch to a bigger deposit before the VAT increase, you should offer to pay it before 31 December.
7. Find the cheapest fuel in your area
Fuel prices are expected to increase even more in 2011, with a planned fuel duty increase also due alongside the rise in VAT to 20%. These two increases combined will make a significant difference to how much you’ll be paying at the pump, so it is worth doing some research to find the cheapest fuel in your area before then.
8. Keep a check on your fuel economy
Now is a good time to be monitoring the efficiency of your car. Driving economically will save you in the long run. Don’t just rely on the factory-fitted mpg calculator in your car, use our online tool.
9. Buy car accessories before the VAT rise
The Christmas sales usually throw up some good deals on satellite navigation systems and MP3 adaptors, but these too will be affected by the VAT rise. If you receive electronics vouchers or are looking for a new car gadget after Christmas, hit the high-street before 1 January.
10. Win £5,000 by entering the Which? Car Survey 2011
One of the easiest ways to beat the VAT rise is to win a substantial amount of money. Fortunately, Which? Car is offering the opportunity to do just that, when you enter the Which? Car Survey 2011. The survey is online only this year, and everyone who enters their details can enter into our free draw to win £5,000.
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