A new report published by SMMT shows that a car generates more
than five times its showroom price during its life. Called Who’s Milking
the Motor Car?, the report tracks the financial beneficiaries of a car from
new in 1992 to its end of life in 2000, logging different income streams year
on year.
The findings reveal that the biggest single winner is the
Treasury. The Chancellor takes more than 23 per cent of total income generated.
This comes from VAT on new and used sales, Vehicle Excise Duty (road tax), petrol
tax and insurance premium tax. Exceeding the showroom price by more than £3000,
the report shows the government receives over £11,000 during the car’s nine-year
life.
Other sectors can expect income from the car too. Finance houses
and insurers pool a massive £8,000, 16 per cent of the total. Used car dealers
and private sellers benefit from its re-sale value. Assuming just five changes
of owner, the total income from used sales hits £13,900. There are also less
obvious beneficiaries, including car parks, cross channel ferry operators and
even rail companies.
Commenting on the report, SMMT chief executive Christopher
Macgowan said, ‘We all know the enormous social benefits that the car has brought
to millions of people. What this report shows is that each car has a very real
economic value too, not just for those involved in its manufacture and first
sale, but for all those who depend on its significant life span as a major source
of income.’
ends.
Notes to editors
- The model used for this report is a standard mid-range
saloon. The price new is assumed to be £9,400 inc VAT. During its life the
car travels an average 12,000 miles per year. Fuel consumption is assumed
to be 33 miles per gallon. The car has six owners from new in 1992 to its
end of its life in 2000.
- In addition to the taxes listed above, since April 1998
all new car sales have been subject to a £25 first registration fee. In 2000,
over 2.2 million new cars were sold in the UK generating an additional £55.5m
for the Treasury.
- Ferrystat, the annual ferry review published by IRN research,
reported that nearly 8.8 million cars were transported on UK ferry routes
to and from Britain and the Continent, the Republic of Ireland and on British
domestic routes in 2000. www.irn-research.com
- In 2000, an annual season ticket for Winchester station
car park cost £403. This car park has 582 spaces which fill to capacity by
10 am each working day. There are more than 15 commuter towns on the South
West Trains’ Southampton to Waterloo line. Each has its own car park.
- A copy of the full report including model assumptions and
sources is available (on this web site )
