Recently, the reporter from the China Automobile Dealers Association, Shen Rong, Deputy Secretary-General was informed by the year 2008, total transactions in 31 provinces and cities used cars 2,737,300, compared with the historical increase of 79,700 over the same period, an increase of only 3.0 %.

Rong Shen told reporters, in a qualitative change has not yet arrived, the accumulation of second-hand cars in China is still at this stage the main features of market operation. He expects the second half of second-hand car market will bottom out, to achieve rapid growth, in 2010 entered the second high-speed development cycles. In the fast growth, by the car manufacturers to rely on rigorous certification standards and norms launched “certified used cars” will become a useful complement to second-hand car market.

Small increase in second-hand car trading capital.

Recently, in and stepping in Beijing to open at the old motor vehicle market, Beijing, second-hand car trading volume showed a slight increase. Beijing used motor vehicle market marketing director Wang Meng told reporters that post-holiday this year than in previous years, is one of the biggest changes to the owners of multi-market dealers, which in previous years, the phenomenon has never happened before.

It is understood that, since Jan. 20 to buy a new car purchase tax of 1.6 liters halving the following policy implementation, and many owners of old cars began to consider transfer, in order to buy new cars, replacing their old hands, which to some extent stimulated the consumption of new vehicles, also to a certain extent, to speed up the used car market, vehicle updates.

Although capital transactions showed a slight increase of used cars, but Wang Meng do not think it is the best time to buy used cars. “The business of stock before the Spring Festival have been clearing, post-holiday inventory is very small, the price of selling cars but the price is higher than the pre-holiday, another used car valuation consumers have certain expectations, Therefore, the time to market the car dealer friend, certainly not the price of selling particularly high.”

Limited Impact on the Tax Cut Policy

Recently, the news, as expanding domestic demand and stimulating one of the measures to stimulate the automobile market, the China Automobile Dealers Association, including the drafting of the VAT second-hand car and then halved to 1% for second-hand car trading purposes or advice, have been relevant state ministries have adopted recently is expected to be introduced, then there may be on the car rental, car finance, and so some of the incentives.

It is understood that a long time, our transaction process in the used car tax levied more hindered the pace of development of second-hand car market. Introduced in 2002, “Ministry of Finance, State Administration of Taxation on VAT policy on junk and old vehicles (Caishui [2002] 29)”, the state capital gains tax on used motor vehicle to do the new regulations, taxpayers sell their used to Consumption Tax of motor vehicles, motorcycles, boats, price more than the original value, according to halve the rate of 4% value-added tax; price does not exceed the actual value of, exempt from VAT.

Old used motor vehicle business unit sales of motor vehicles, motorcycles, boats, according to halve the rate of 4% VAT. This means that the operating companies selling used cars used cars less than the purchase price if the sale price, also need to pay 2% of the value-added tax. Reporter was informed that, in order to avoid paying this part of the value-added tax, currently on the market intermediary business services company, mainly through brokers to trade, so that only 5% service charge to pay sales tax, and service fee per vehicle is very low, only about a few 100. Insiders expect more than 98% of the current used car used car transactions are through brokers or intermediaries completed.

“Value-added tax levied by half again of little significance, because most of the used car trade through brokerage firms, intermediaries to the transaction.” Asian Games Village Automobile Exchange Market Chuckie line used car strong president, said Zou. Wang Meng said, the used car transaction in the used car transfer process, in fact, only a small part of the used car through the operating company to complete the transaction, to pay VAT.

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