Emergency budget may turn car buyers green

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There is a growing feeling in the car retailing business that many more buyers will soon be looking to downgrade their cars into much more economical models.

The long awaited lift off for eco-friendly, low emission cars could finally be about to gather pace. Many dealers are reporting an increase in customers looking to offload their gas guzzlers for leaner, greener, diesel alternatives, which of course won’t generally be so expensive to run or to tax.

This could be a reaction from some people worried about job security and many and various rises in taxes and service costs. Maybe we can expect the momentum of interest in the more environmentally friendly alternative to build further after yesterdays “emergency” budget. Although it could have been a lot worse for motorists there is still certainly a lot to ponder on.

Certainly the rise in VAT from 17.5% to 20% has made a lot of people in the car retail world worried but at least they have had time to get used to the idea as it’s been talked about being a possibility for quite a while. Also with it not kicking in for another 6 months it might just be long enough for a fragile new car industry to gain strength. Of course the extra VAT will affect not only new car purchases but servicing costs too, so expect a “VAT busting” price war as competition in this sector heats up.

Luckily fuel duty will not incur any further increases that were not already announced in the outgoing government’s budget but the increase in VAT will still push the prices up at the pumps.

The SMMT (Society of Motor Manufacturers and Traders) were still upbeat about the VAT increase telling us that although it will add around £300 to the price of an average new car the “delayed timeframe gives consumers time to plan and prepare”. In other words hold on to your hats, get the Champagne and cigars ordered, the last quarter is going to be massive!

There is no doubt however that it will be a worrying period for many, however we have been here before and as a colleague told us recently, it seems that every time the government tries to tax us out of our cars it only makes us more determined to drive them.

Well that may very well be the case where budget is not an overriding buying factor or where the threat of losing your job doesn’t hang over you like the proverbial Sword of Damocles, but the prospect of still being able to drive a really cool modern car that also happens to be eco friendly and can achieve 70 miles to the gallon, may be too hard to resist.