Forget new ones, even buying an old car will become so expensive from January 1, 2025, it is better to buy before December 31.

Auto News Desk – Buying a car in the country will become expensive from January 1, 2025. Almost all companies are going to increase the prices of their cars by up to 4%. That means there is a great opportunity to buy a car till 31st December. However, in the meantime, buying old cars has also become expensive. Yes, the demand for old cars is very high in the market, but now customers will have to spend more money to buy them. Actually, in its 55th meeting, the GST Council has decided to increase the tax on old cars from 12% to 18%. The new rates decided by the Council will be applicable only to vehicles purchased by companies or dealers operating in the used vehicle sector.

If you are selling your old car through a registered dealer then this GST will be applicable. If you are selling the car directly then you will not have to pay this GST. In such a situation, you will have to keep this in mind while deciding the right price. The new GST rate on used cars will not be applicable to individual buyers. This means that if you buy a used car directly from someone, you will have to pay only 12% tax instead of 18% GST.

At the same time, even after selling an old electric vehicle, you will have to pay 18% GST. However, you will have to pay 5% GST on purchasing a new EV. With the increase in GST rate, the difference in prices of new and old cars is going to reduce. Apart from this, the sale of old cars will also be affected. Suppose you bought a car for Rs 18 lakh. If you sell it to a friend or relative or acquaintance for Rs 13 lakh, no GST will be charged.

At the same time, if a dealer buys a car for Rs 13 lakh and sells it for Rs 17 lakh, then he will have to pay 18% GST on the profit margin of only Rs 4 lakh. This means that now when buying an old car, whether it is petrol, diesel or EV, you will have to pay 18% tax on the profit margin. Overall, this will increase the prices of second hand cars.