Latest News

New car running costs to rocket as new tax rules take hold

Friday 13 January 2017, By Autovolo

New car running costs to rocket as new tax rules take hold

New car running costs to rocket as new tax rules take hold

Seven out of 10 drivers will be facing higher running costs when new road tax laws come into force in April, according to recent research.

Road tax, or Vehicle Excise Duty (VED), is moving away from the emissions-based system on April 1, with a flat rate of £140 a year applying to any car with an internal combustion engine, plus a £310 premium for vehicles costing more than £40,000.

With 74 per cent of Britain’s new cars currently qualifying for free or very cheap VED, the government stands to bring in a substantial amount of revenue as a result of the changes.

A Ford Fiesta 1.0-litre EcoBoost registered in April 2017, for example, will be £540 more expensive to tax over a four-year period than one registered in March 2017.

However, the changes are good news for those interested in buying a less efficient car. The 5.0-litre V8-engined Ford Mustang, for instance, will be cheaper to tax come April, with new buyers saving themselves £245 over four years compared with those buying a vehicle in March.

Daniel Powell, Honest John’s managing editor, said: “Many motorists are unaware of the changes that are coming for VED, but the fact of the matter is this – the system is changing, and low- emissions cars won’t be as tax-efficient as they were before. It’s a bit of a mixed message to increase tax on fuel-efficient cars while reducing it on less eco-friendly models when the government is trying to increase the uptake of low- and zero-emissions.”