Thread: Car Tax...
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      09-07-2018, 07:13 AM   #28
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Drives: BMW F11 535i Touring
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Originally Posted by thescouselander View Post
I can't see how it won't affect residuals. The type of person in the market for a 4 year old used car isn't generally the same type of person who would brush off a 500 road tax bill every year. In any case the lower residuals seem to be getting priced into the PCP calculations which affects the monthly payment and that is the key metric as far as I'm concerned.

Perhaps unintuitively I don't think the second hand buyer will actually be disadvantaged ultimately. The tax bill might go up but I suspect this will be more than compensated for by the lower purchase price for the vehicle as market forces balance everything out - in reality it will be the new buyers that get clobbered.
I'm sure there will be a slight drop in residual values due to the used buyer seeing higher running costs. Then this is only one factor depressing used values.

BMW have flooded the market, assisted with tempting incentives. The cost of the cars has crept up anyway, (made worse by the multi-options factor), that in itself means a faster fall to sensible used values. Perceived costs of running a higher valued used car, more complex cars adds to the hit, as has always been the pattern.

It has always been a buyers dilemma, buy a premium used car at say 20k, or buy a new car of the same value. Many more will opt for the new car, lower and controlled running costs, vs. the unknown costs of a complex (perceived or real) premium used car. The higher VED will turn a few more users in the cheaper new car direction. Market forces will level to where car buyers see the 'balance' of (new vs. used) values.