Used Stock Margin Calculator

The margin on the windscreen card is not your profit. Put in a used caravan or motorhome and see what it really makes after VAT, prep, warranty, commission and every day it sits on the forecourt. Then see when it stops making money.

Built for UK caravan and motorhome dealers. Figures are illustrative and based on your inputs. Check VAT treatment with your accountant.

Your Unit

Buying and selling

For standard-rated stock, enter both prices including VAT.

Costs to sell it (ex VAT)

Extra income from the sale

Holding it in stock

Illustrative only. Margin scheme VAT is calculated as 1/6 of the difference between selling price and purchase price, with no VAT on a loss. Standard-rated VAT assumes VAT was reclaimed on the purchase. Costs are entered ex VAT. Holding cost is stocking interest on the purchase price plus your daily overheads. This is not tax advice.

Two Numbers Most Dealers Get Wrong

Take a used caravan bought in at £18,000 and priced at £22,995. On the card, that is a £4,995 margin. On the example figures above, it makes £2,986 if it sells in 60 days.

Now let it sit for five months and take a £1,000 cut to move it. It makes £1,617. Nearly half the profit has gone, and no single decision felt like the one that lost it.

Two numbers explain it:

  • The cost of a day. Stocking interest and overheads on that unit run at about £6 a day. That is £178 every month it stays on the forecourt.
  • The real cost of a price cut. Under the margin scheme, VAT is 1/6 of the margin. So a £500 cut only costs you about £417. Price cuts are cheaper than they look. Waiting is dearer than it feels.

How the VAT Margin Scheme Changes the Maths

Most used caravans and motorhomes bought from private sellers or in part exchange are sold under a VAT margin scheme. The rules that matter for margin:

  • VAT is on the margin, not the price. Multiply the gross margin by 1/6.
  • Prep costs do not reduce the VAT. Repairs, parts and the cost of bringing a unit to sale cannot be added to the purchase price.
  • Part-exchange over-allowances count. Your purchase price is the figure you agreed with the customer, so a generous part exchange shrinks the margin on the unit you later sell.
  • No VAT on a loss. Sell below what you paid and no VAT is due. You cannot offset that loss against VAT on other sales.

Bought a unit with VAT you reclaimed, such as ex-fleet or ex-hire stock? Switch the calculator to standard-rated.

Five Ways to Protect Used Stock Margin

  1. Set an ageing trigger. Review every unit at 45 and 90 days. Decide to cut, promote or move it to auction, rather than letting it drift.
  2. Price the part exchange against the retail you can get. Work back from a realistic retail price, minus prep, minus target margin. Not from what wins the deal on the day.
  3. Cost prep before you buy. A damp or habitation issue found after purchase comes straight out of profit.
  4. Make the first price the right price. A unit priced to sell in 30 days beats one priced high, then cut twice.
  5. Track profit per day, not profit per unit. A smaller margin turned in 30 days often beats a big one that takes five months.

More Tools

Used Stock Margin FAQs

How is VAT calculated under the margin scheme?

You pay VAT on the margin, not the full selling price. Take the selling price, subtract what you paid for the unit, and multiply the result by 1/6. If you sell at or below what you paid, no VAT is due on that sale.

Can I add prep and repair costs to the purchase price?

No. Under the margin scheme the purchase price does not include the cost of bringing a unit to sale, such as repairs, parts or valeting. Those costs reduce your profit but not your VAT on the margin. VAT on them is normally reclaimed through your VAT return as a business cost.

What purchase price do I use for a part exchange?

Use the part-exchange figure you agreed with the customer. If you over-allowed on the part exchange to make the deal, that higher figure becomes your purchase price, and the margin on the unit you later sell is smaller.

How much does it cost to hold a used caravan in stock?

It depends on what you paid, your stocking finance rate and your overheads. On an £18,000 unit at 8% stocking interest, plus £2 a day for space and insurance, holding costs about £6 a day, or £178 a month. Put in your own figures above.

When should I cut the price on aged stock?

When the cost of waiting is more than the cost of the cut. Under the margin scheme a £500 cut costs you about £417 after VAT. If a unit has had no serious interest in 60 days, a well-judged cut now usually beats another 90 days of holding costs and a bigger cut later.

Should finance commission count towards the margin?

Yes, if the unit is likely to sell on finance. It is real income from the sale. Treat it as a bonus rather than the reason to stock a unit, as not every buyer takes finance.