Prices of second-hand
commercial vehicles have risen by as much as Php150,000, a result of the Tax
Reform for Acceleration and Inclusion Act (TRAIN).
This was revealed by top
buy-and-sell website OLX
based on second-hand commercial vehicles ad postings on the portal, from
January 2017 to April 2018. Speculations on the TRAIN Law fuelled the price
increase on the 3rd quarter of 2017 and continue long after it was implemented
early this year.
The TRAIN
Law has influenced the resale value of one to two-year old cars with an average
increase of P90,000. Among these are units with original retail price of
P1million and above such as Toyota Innova, Honda CR-V, Toyota Fortuner,
Mitsubishi Montero and Ford Everest.
The first tax reform package
of the present administration, the TRAIN Law provides for the increase in
take-home pay of Filipino workers by reducing income tax rates while increasing
and rationalizing tax rates in other goods and services. For automobiles, TRAIN
simplifies excise tax but lower-priced cars continue to be taxed at a lower
rate while more expensive cars are taxed at a higher rate.
“The data we released is our
way of guiding buyers in determining which second-hand vehicles have
significantly increased in price,” says OLX Head of Cars Xervin Maulanin. “This
will also help them evaluate the difference in buying pre-owned versus brand
new cars.”
Meanwhile, no significant
effect can be seen on prices of entry level passenger cars like Toyota Vios,
Honda City and Hyundai Accent.
Additionally, Maulanin also
notes, “Despite talks about the TRAIN Law in the third quarter of 2017, the
demand for second-hand cars continued to increase.”
Even with the price hike,
OLX’s data indicates a steady market for pre-owned vehicles, from high-value to
entry level, as the ad posting for second-hand vehicles continues to be on the
upswing.
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