Import Tax Slashed By 50%

[Chris0628]

anyone out there wanna import a car & give it out on long-term rent ?

[Ripper]

hey bro, could you e-mail that to me. i jot down the tax rates on a excel sheet and tried working out the cost, but it differs from the values i get. planing on gettin down a few vehicles, so need to do the costing. hehe... il pm you my mail address.

sent!

on main topic

another interesting thing is how this would effect the renting business.

Maybe Milindu can shed some light there...

last time i heard...even a maruti rental was 25k or something per month and the alto 35k

[Chris0628]

sent!

on main topic

another interesting thing is how this would effect the renting business.

Maybe Milindu can shed some light there...

last time i heard...even a maruti rental was 25k or something per month and the alto 35k

yeah.... Milindu.. please comment...

hope i can get a good condition car for a affordable rate

[L board]

AL is getting flooded with new advertisements. But the prices they quote... Can someone please help me to stop laughing....

This is the only country where a tax reduction induces sellers to quote higher prices?

There is no point in being greedy now. The sellers can never get the prices they used to get. Will any of us be willing to pay the same amount that we would have paid for a vehicle 2 weeks ago?

[VWvortex]

noticed the rush on AL classifieds!

but prices are zero to marginally lower than what it was..... give it 2 more months, then the reality will hit

[L board]

noticed the rush on AL classifieds!

but prices are zero to marginally lower than what it was..... give it 2 more months, then the reality will hit

[harshansenadhir]

Yes I am 100% certain the second hand market will crash in 3 months time (or sooner). Elaborating my thinking for what is obvious is not worth it. It is like elaborating why someone would die if he is deprived of water for 15 days

Anyway, let's wait and see. Be patient for 3 months man and lets reopen this thread and see who will have to put own's foot in the mouth

market crash is something I doubt but slight come down of prices, yes may be. That's why I asked to elaborate reasoning rather than just guessing. There were permits issued, local assembling started, indian vehicles started flood in due to free trade agreements between india and Sri Lanka but nothing had contributed to crash the second hand vehicle market but slight shatter specially when there were some 40,000 permits issued.

Second hand car market will crash

1. If dealers start trade-in (at present only very very few does trade-in and it's not a fair trade-in they have)

2. If Government starts heavily taxing old vehicles on revenue licenses

3. If emission test would broader to something like MOT test in UK where mechanical/running aspects and body condition of vehicles is being benchmarked

4. If custom duty of a brand new vehicle is lower than a used/reconditioned vehicle and it increases based on the number of years from YOM to discourage old vehicles

yes there's a possibility. But looking at present system it's still favouring used vehicles over BN or unreg.

[Saturn]

I'm always open to upgrading - that said, I'd like to pose a few questions to you guys

- For buying a new car - would it be better to get new/unreg or a used one, when the prices drop (if they do).

- What are your best predictions as to what will happen over the next few months (new/recon/used market).

- Do you guys think this is a temp/permanent reduction?

Edited June 7, 2010 by Saturn

[gpmac]

I was checking the prices and the daihatsu terios is now 5.5 mill

the hyundai tucson is now quoted at 6.0 mill today last week it was a littler higher than that

people looking for brand new 2000cc plus SUVs will find that prices have gone down considerably

[TharakaWi]

Hm, I love the fact that the prices went down... I spoke to one car importer (individual) and another broker..., They all told me that this reduction is gonna there for only few months. One of them said two months , other also said few months. This rumor seems to be spreading now. Do u guys think this has any truth???

[Killer-B]

market crash is something I doubt but slight come down of prices, yes may be. That's why I asked to elaborate reasoning rather than just guessing. There were permits issued, local assembling started, indian vehicles started flood in due to free trade agreements between india and Sri Lanka but nothing had contributed to crash the second hand vehicle market but slight shatter specially when there were some 40,000 permits issued.

Second hand car market will crash

1. If dealers start trade-in (at present only very very few does trade-in and it's not a fair trade-in they have)

2. If Government starts heavily taxing old vehicles on revenue licenses

3. If emission test would broader to something like MOT test in UK where mechanical/running aspects and body condition of vehicles is being benchmarked

4. If custom duty of a brand new vehicle is lower than a used/reconditioned vehicle and it increases based on the number of years from YOM to discourage old vehicles

yes there's a possibility. But looking at present system it's still favouring used vehicles over BN or unreg.

With you on this harshana...... I guess indian and sometimes chinese tin cans will start to flood in.....(to our horror if this happens, japanese secondhand car market will not crash but increase) a bit optimistic but still.....

There is absolutely no chance of the govt. issuing permits to professionals again in the near future.....so there is no hope of the 2nd hand car market crashing due to this.

[L board]

market crash is something I doubt but slight come down of prices, yes may be. That's why I asked to elaborate reasoning rather than just guessing. There were permits issued, local assembling started, indian vehicles started flood in due to free trade agreements between india and Sri Lanka but nothing had contributed to crash the second hand vehicle market but slight shatter specially when there were some 40,000 permits issued.

Second hand car market will crash

1. If dealers start trade-in (at present only very very few does trade-in and it's not a fair trade-in they have)

2. If Government starts heavily taxing old vehicles on revenue licenses

3. If emission test would broader to something like MOT test in UK where mechanical/running aspects and body condition of vehicles is being benchmarked

4. If custom duty of a brand new vehicle is lower than a used/reconditioned vehicle and it increases based on the number of years from YOM to discourage old vehicles

yes there's a possibility. But looking at present system it's still favouring used vehicles over BN or unreg.

I would rather look at it from a more practical point of view. If my budget was Rs 800,000 and I were to spend that Rs 800,000 to buy a bl00dy 25 year old Trad Sunny, I would now buy a brand new Maruti 800 for the same price. Now I would not want to spend Rs 800,000 for that same hacked car!

Simple!

Come on. If you were to buy a second hand car, would you now spend the same amount you would have spent two weeks back? If so, you are a saint and there will be so many sellers who would come after you to dump their vehicles on you for the same old price

Please think practically.

The 2nd hand market crashed in 1999/2000 with the introduction of the transferable permit. This time it didnt happen because it is not transferable. Indian trade agreements didnt bring down the price of Indian vehicles. Only now their prices are coming down. The bottom line is that when you get more vehcles into the market and the products is free to move from hand to hand (point to note about non transferable permit) the price comes down. I never wanted to explain these obvious things but couldn't refrain myself from doing so in the best interest of some people who cannot seem to understand the obvious

[harshansenadhir]

QUOTE (Killer-B @ Jun 7 2010, 05:00 PM) <{POST_SNAPBACK}>

There is absolutely no chance of the govt. issuing permits to professionals again in the near future.....

in fact there is, as per what I heard from a reliable source. The term crash has a different meaning and to the date I haven't seen second hand market crashing.

Look at certain developed countries where they truly depreciate vehicles and second hand value is a very small fraction of the brand new price and sometimes there are vehicles (within 10 to 7 years from YOM) available free to collect coz sending them to scrappers cost them more. Now that is what we called a crashed second hand market.

[L board]

Hm, I love the fact that the prices went down... I spoke to one car importer (individual) and another broker..., They all told me that this reduction is gonna there for only few months. One of them said two months , other also said few months. This rumor seems to be spreading now. Do u guys think this has any truth???

This importer and the broker must be having a close relationship with the policy makers to get all these internal details

You should have made them AL members man. Then with their "internal information" all the AL members would have got to know about this tax reduction also in advance so we could have sold our vehicles on time. I didn't know that importers and the jobless brokers had access to all the goverment internal information until now.

Think logically

Edited June 7, 2010 by L board

[lasi]

Hm, I love the fact that the prices went down... I spoke to one car importer (individual) and another broker..., They all told me that this reduction is gonna there for only few months. One of them said two months , other also said few months. This rumor seems to be spreading now. Do u guys think this has any truth???

He must be stimulating people to buy brand new to cut few deals within short time. and must have been starving since quite long time

[L board]

in fact there is, as per what I heard from a reliable source. The term crash has a different meaning and to the date I haven't seen second hand market crashing.

Look at certain developed countries where they truly depreciate vehicles and second hand value is a very small fraction of the brand new price and sometimes there are vehicles (within 10 to 7 years from YOM) available free to collect coz sending them to scrappers cost them more. Now that is what we called a crashed second hand market.

Harshana I was refering to a price crash when I said "crash". I didnt mean the number of transactions would crash. I hope you also meant a price crash when we were talking about a "crash" in the second hand market.

[harshansenadhir]

I would rather look at it from a more practical point of view. If my budget was Rs 800,000 and I were to spend that Rs 800,000 to buy a bl00dy 25 year old Trad Sunny, I would now buy a brand new Maruti 800 for the same price. Now I would not want to spend Rs 800,000 for that same hacked car!

Simple!

damn, no point if this is the comparison mate. I would still go for something else than this crap box. Being driven a one about one week and I never ever think of touching a one again.

Come on. If you were to buy a second hand car, would you now spend the same amount you would have spent two weeks back? If so, you are a saint and there will be so many sellers who would come after you to dump their vehicles on you for the same old price

haven't seen such desperate sellers and this news was around the corner for sometime back, yet no seller went after buyers. In FACT it was other way around

Please think practically.

The 2nd hand market crashed in 1999/2000 with the introduction of the transferable permit. This time it didnt happen because it is not transferable. Indian trade agreements didnt bring down the price of Indian vehicles. Only now their prices are coming down. The bottom line is that when you get more vehcles into the market and the products is free to move from hand to hand (point to note about non transferable permit) the price comes down. I never wanted to explain these obvious things but couldn't refrain myself from doing so in the best interest of some people who cannot seem to understand the obvious

Could you please compare the prices of any make model back in '96 and present it was always incremental. This transferable permit you mentioned did not contribute to crash the market. The second hand market never crashed, if you know the meaning of market crash. We never had people crushing or throwing vehicles off, dismantle because it's cheap than selling. Never happened yeah? So you're one of those thinks indian vehicles would contribute to crash second hand market? If so, by now it would've happened for the amount of maruti's,alto's and what not indian vehicles running about.

[Killer-B]

I would rather look at it from a more practical point of view. If my budget was Rs 800,000 and I were to spend that Rs 800,000 to buy a bl00dy 25 year old Trad Sunny, I would now buy a brand new Maruti 800 for the same price. Now I would not want to spend Rs 800,000 for that same hacked car!

Simple!

In fact there is people who hate indian cars like myself....... Just try to think...... you always have better options than a trad sunny for .8mil for example take a toyota corolla AE96 you get power steering (i think you get P/S in a trad sunny too) which you wouldn't in a b.new maruti so smart people always tend to go for a japanese or a european car rather than a indian car.

Edited June 7, 2010 by Killer-B

[Ripper]

I would rather look at it from a more practical point of view. If my budget was Rs 800,000 and I were to spend that Rs 800,000 to buy a bl00dy 25 year old Trad Sunny, I would now buy a brand new Maruti 800 for the same price. Now I would not want to spend Rs 800,000 for that same hacked car!

very true but the issue is... at least as far as i can see it... the price of brand new cars and recons have a huge lead over 2nd hand cars.

true cars like maruti's would be super affordable but that alone is not enough to take down the demand of cars under the 2mill bracket.

Say what would the alternative be for like a used FB15, N16 or a honda, mazda in the same bracket?

I don't see how even the recons coming under the new taxes can hit at those...

IMHO...cars around 3 mill and over will have a stronger impact in terms of depreciation. People with more money can now afford something new rather than settling for used cars.

But for car buyers in the 2 mill bracket... not so much of luck!

maybe i'm wrong...but i just don't see how things could be different

[TharakaWi]

This importer and the broker must be having a close relationship with the policy makers to get all these internal details

You should have made them AL members man. Then with their "internal information" all the AL members would have got to know about this tax reduction also in advance so we could have sold our vehicles on time. I didn't know that importers and the jobless brokers had access to all the goverment internal information until now.

Think logically

I understand what you mean.

But many ppl talk about this rumor. The AL members also have mentioned abt this. However, certain big time importers and agents had v.little stock during tax slashing. There could be a certain link in gov that may have leaked the news. Anyways the guys i spoke to are by no means any big, or even medium. But this rumor is spreading...

[harshansenadhir]

Harshana I was refering to a price crash when I said "crash". I didnt mean the number of transactions would crash. I hope you also meant a price crash when we were talking about a "crash" in the second hand market.

I thought you meant a market crash and my reasoning was based on that and a slight come down on prices, say 10 - 15% can be expected if this prevails if you meant that's a 'crash' and don't get me wrong, i'm in opinion that these prices were absurd and you said it right abut the pajero prices and all that. But this tax reduction alone wouldn't help in reducing the "value" of used vehicles. All what I mentioned to be implemented if at all.

Second hand vehicle market will crash within 3 months. Because from last night, no one wants to buy. Everyone wants to wait. Which means no one can sell now but many would want to sell now to minimise the loss. So the simple demand supply theory should work on price. From last night, the demand for second hand vehicles went on a nose dive (because no one wants to buy right now. They want to wait and see) and the supply of second hand vehciles increase (to minimise loss of future price reductions). This should bring down the vehicle prices substantially within the next 3 months. By 6 months time, it the market will stabilize.

An eg8 would go for between 600,000- 700,000 biggrin.gif

NZE 121: Rs 1,600,000 - 2,000,000 biggrin.gif

N16: Rs 1,100,000 - 1,300,000 biggrin.gif

ES8 VTI: Rs 1,700,000 - 2,100,000 biggrin.gif

[harshansenadhir]

This importer and the broker must be having a close relationship with the policy makers to get all these internal details

You should have made them AL members man. Then with their "internal information" all the AL members would have got to know about this tax reduction also in advance so we could have sold our vehicles on time. I didn't know that importers and the jobless brokers had access to all the goverment internal information until now.

Think logically

same we were debating in the morning on the statement that spokesperson of A*W said to news that they didn't have a single ex-stock vehicle. Is it co-incidence ? or they had some inside information? this is nothing new to Sri Lanka and not only for auto mobiles even for other commodities this happen. Ever experienced fuel crisis just before a price hike? Same applies here.

[charitha19]

ok here is my 2 cents.... for used cars that have no comparable recon or brand new that is even remotly affordable will not change that much. however for cars that still have recons and brand new ones coming in.. welll.. thats it for them...

[L board]

damn, no point if this is the comparison mate. I would still go for something else than this crap box. Being driven a one about one week and I never ever think of touching a one again.

Well if everyone thinks like that, I dont think we would see so many Marutis on the road. Again please please be practical. It is not you in the whole Sri Lanka. There are 2+M different people! Otherwise we would only see Peugeots around right?

haven't seen such desperate sellers and this news was around the corner for sometime back, yet no seller went after buyers. In FACT it was other way around

Is that why so many resellers / small time importers crashed in the last few years? Because the buyers came running after the vehicles they were selling??? Are you living in Sri Lanka or any other country? Please help me to stop laughing!

Could you please compare the prices of any make model back in '96 and present it was always incremental. This transferable permit you mentioned did not contribute to crash the market. The second hand market never crashed, if you know the meaning of market crash. We never had people crushing or throwing vehicles off, dismantle because it's cheap than selling. Never happened yeah? So you're one of those thinks indian vehicles would contribute to crash second hand market? If so, by now it would've happened for the amount of maruti's,alto's and what not indian vehicles running about.

For most of us a market crash means a price crash and NOT "people crushing or throwing vehicles off, dismantle". I dont think in Sri Lanka anyone would do that despite any price reduction. I was refering to a drastic sales price reduction and I believe for most of the other readers too it meant a price reduction . For you if a "Market Crash" would mean "people crushing or throwing vehicles off, dismantle" well I am sorry for you

With a misunderstanding of the definition itself, there is no point in continuing this conversation (I better explain things to someone who understands what a market crash means in this country. Otherwise when I say property market crash, you would think I am talking about a situation where people distroy their houses because it is more economical to do that rather than maintaining it).

Lets reopen the thread after 3 months to see whether the "Second hand vehicle market prices have come down" ya?

[L board]

I thought you meant a market crash and my reasoning was based on that and a slight come down on prices, say 10 - 15% can be expected if this prevails if you meant that's a 'crash' and don't get me wrong, i'm in opinion that these prices were absurd and you said it right abut the pajero prices and all that. But this tax reduction alone wouldn't help in reducing the "value" of used vehicles. All what I mentioned to be implemented if at all.

30-40% guaranteed!