When buying a car, there are numerous running costs that have to be taken into account – vehicle tax being one of them.
But if you thought you knew the ins and outs of how much you have to pay, it’s all about to change. From April 1, the system will be revamped as the government thinks it is missing out on large chunks of revenue because of the way it’s set up now. It also wants to encourage the uptake of zero-emission vehicles.
So if you’re thinking about buying a new car, here’s everything you need to know about costs.
How much is vehicle tax going to cost?
Under the new rules, only the cost of the first year of a car’s registration is affected by its CO2 emissions. There are a number of emissions brackets ranging from zero-emission vehicle owners – the only people who will now get away with paying no road tax – all the way up to £2,000 for motorists with cars emitting more than 255g/km of CO2.
After the first year, it costs £140 a year for petrol and diesel vehicles, and £130 for alternatively fuelled vehicles. Owners of zero-emissions cars will continue to pay nothing.
What about more expensive cars?
If a vehicle’s list price is more than £40,000 – that’s before any discounts are applied – owners will have to pay an extra £310 on top of the standard rates.
So if you buy a £40k-plus zero-emissions car, you’ll still have to pay £310 per year for road tax. Owners of expensive petrol- and diesel-powered vehicles will have to pay £450 (£310 plus the £140 flat rate) for years two to five, and will have to add £310 to the first-year rate as well.
Which cars are the worst affected?
According to analysis conducted by What Car?, some of the UK’s lowest-emission cars are going to be the worst hit by the changes. For example, the Lexus RC 300h hybrid currently costs just £40 to tax for three years, while under the new rules its driver will have to fork out £1,030 for the same period – a staggering 2,475 per cent increase.
Even top-selling cars like the Vauxhall Astra 1.0-litre are affected. Drivers of these cars currently pay nothing under current rules, but even this will rise to £400 for three years.
Is there opposition to the change?
There certainly is. Nick Lyes, spokesman for the RAC, said: “Aside from the complexity of the new Vehicle Excise Duty bands, the simple truth is this: from a vehicle tax perspective, drivers who opt for a car that has very low emissions, including hybrids, will be worse off under the new system than before.
“This surely runs counter to the government’s aim, which is to encourage more of us to switch to newer, lower emission vehicles.”
What can I do to avoid the changes?
Unfortunately, with the changes coming in soon, there’s not much you can do to avoid it. However, if you were able to find a pre-registered car through a dealer then you may be able to miss the additional charges.