Those who are considering buying a new or used car in the New Year will be undoubtedly be concerned about the effect that the VAT increase is going to have on prices. In the current economic climate, people need to watch every penny, and everyone is going to be looking for a deal on the purchase of a car. This includes taking the VAT into consideration.

The VAT increase comes into effect on the 4th January 2011, and for drivers who cannot consider buying until the New Year, it is possible to reduce the amount normally required to purchase a vehicle. The first method is to opt for a used car instead of a brand new one. Provided the car has been previously owned and driven by somebody else, you will not pay the standard rate of VAT with the purchase price. The dealer will have to pay the VAT, but only on the profit that they make. Buying a used car from a private seller also ensures that the buyer will not have to pay VAT, though they should still make the usual checks to ensure that they are getting a good deal.

Buying used cars brings a number of benefits, not just with VAT. Used cars are obviously cheaper than new cars and it is a good way to get a good quality car without the price tag of a new vehicle. Reputable dealers will offer good warranties on a used car and while the market is slow there are opportunities to pick up a bargain.

published: 25/11/2010