Tashtey Posted May 28, 2013 Share Posted May 28, 2013 May I enlist the combined wisdom and accountancy skills of Forum users to help me to solve a little problem that I have encountered with a motor home Dealer.at a Warner's Show earlier this year where we found a smaller, more manoeuvrable van to downsize to now that we are getting on a bit. The van we chose had its reduced Show price prominently displayed on the windscreen. We assumed that this was the "forecourt price" and the price against which we would trade in part exchange our present motor home. We agreed a trade in price. We were rather surprised to receive a Sales Order on which the "forecourt" price was given as £5000+ less than the original windscreen price and the trade in price also reduced by £4000+ .No Vat is mentioned anywhere. Can anyone suggest an explanation for the use of this unusual accounting procedure? Why should both prices be reduced this way? The cash balance we agreed has not changed. There must be a catch somewhere otherwise they would not have done it! We have written several times to the Dealer for an explanation but so far he is showing a marked reluctance to make a reply. Link to comment Share on other sites More sharing options...
Mike B. Posted May 28, 2013 Share Posted May 28, 2013 If he has reduced 1 van by £5000 and 1 van by £4000 surely there is £1000 adrift somewhere? As you are paying cash it wouldn't give him any commission on the HP agreement so maybe he wants to have his stock ie your trade-in, in stock at a lower paper value for accountency purpose Mike Link to comment Share on other sites More sharing options...
snowie Posted May 28, 2013 Share Posted May 28, 2013 Welcome Raymond, I've encountered something similar, every time I've bought a used car. Never fully understood the way it works. I believe it is related to the " bought in/ book value " and sold-on prices of the dealer's stock. I doubt you'll get a very satisfactory answer, and the one who benefits will be the dealer. Their "black-art". Some might call it a scam, but you are not the one who is losing; more likely the tax/VAT man. We agree the deals, then feel we've been cheated. Horsetrading. I'm surprised they get away with it; whatever it is! take care alan b Link to comment Share on other sites More sharing options...
vindiboy Posted May 28, 2013 Share Posted May 28, 2013 Common practice that is, I don't pretend to understand the mechanics of it but have encountered it on several deals with the motor trade, it is an accounting fiddle for sure , in favour of the dealer for sure, but as long as I only paid what I had agreed to it never bothered me. Link to comment Share on other sites More sharing options...
Tony Jones Posted May 29, 2013 Share Posted May 29, 2013 One way the OP COULD lose out would be at selling-on time. The bill of sale will be needed to prove legal ownership, and shows a reduced purchase price, which may influence what a buyer will offer. Link to comment Share on other sites More sharing options...
snowie Posted May 29, 2013 Share Posted May 29, 2013 Tony Jones - 2013-05-29 4:18 PM One way the OP COULD lose out would be at selling-on time. The bill of sale will be needed to prove legal ownership, and shows a reduced purchase price, which may influence what a buyer will offer. Hi Tony; never needed a bill of sale with a car; the registration document usually suffices. Otherwise it would all get a bit complicated I think. What you paid is no business of a future buyer is it? cheers alan b Link to comment Share on other sites More sharing options...
PJay Posted May 29, 2013 Share Posted May 29, 2013 It may be to do with the fact that the dealer pays vat on the difference between the bought cost of a second hand vehicle and the sale price, ( IE his Profit) or this used to be the case, when I worked as accountant and had to audit a car trader. Not sure about new vehicles though, and it was many years ago, and vat has changed.As I said by upping his cost of your old vehicle, he (on paper) will make a smaller profit As long as you are paying the agreed amount I would not worry how they do there accounting PJay Link to comment Share on other sites More sharing options...
Tashtey Posted May 31, 2013 Author Share Posted May 31, 2013 Many thanks to Mike, Alan, Malc., Tony and Pauline for help and reassuring advice. We bought our first motor caravan, as they were called then, in 1964. It was a Calthorpe conversion on a sw base Bedford with sliding cab doors Basic but fun! Since then we've had a selection of motor homes not to mention a multitude of cars for work purposes. In all transactions involved there was complete transparency and no obscure accountancy Also the dealers were genuinely interested in maintaining good customer relations. Perhaps we were just lucky and the present dealer is one of a new breed, Link to comment Share on other sites More sharing options...
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