VAT cut to benefit car loans customers

Nov 25 2008

Buyers applying for secured Car Loans as they hunt for a new or used vehicle could benefit from a VAT cut announced yesterday.

The measure was announced in the chancellor's pre-budget report and will see a reduction from 17.5 per cent to 15 per cent.

Commenting on the decision, the Retail Motor Industry Federation (RMIF) said it would mean a fall in prices that could tempt Car Finance customers back to the showrooms.

RMIF director Sue Robinson said: "The VAT drop will also have an impact on the prices of thousands of other consumer goods and services, leaving cash-strapped households with more money to spend."

Alistair Darling also announced plans to postpone the proposed introduction of higher vehicle excise duty, which Mrs Robinson said would help "reduce the burden" on car loans customers.

The cut follows on from the 1.5 per cent drop in interest rates announced by the Bank of England last month, which was also welcomed by the RMIF at the time.

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