New road tax rates for UK motorists are less than a year away, creating a dilemma for new and used car buyers; whether to buy now or wait until after 1 April 2017 when the new VED bands come into effect?
Chancellor George Osborne's tax hike is expected to raise billions for the Treasury, with higher first year rates for all new cars and a flat rate of £140 thereafter, regardless of emissions. Only zero-emissions models will be exempt, while cars with a list price of more than £40,000 will be charged a £310 supplement.
To find where savings can be made, Auto Express analysed eight classses of cars, from superminis to SUVs, and found buyers of smaller, cleaner cars registered after April 2017 will pay up to nine times more than they do now. Owners of more pulluting models will pay more under the new laws, too, but proportionately less than those running lowere-powered cars.
For example, owners of a Peugeot 208 1.2 PureTech currently pay £20 a year; after April 2017 that would rise to £140. As our table (below) shows, potential buyers will see bills increase nine-fold over three years. Tax-wise, it will be cheaper to buy a new Peugeot 208 before the VED changes.
Yet while first year fees for a high polluting car like Honda's CR-V 2.0i VTEC SE will go up from £300 to £800 under the new regime, annual tax drops by £70 from the current £210 - making the CR-V a more ideal used buy after April 2017 than now. Across three years of CR-V ownership, that works out to a total rise of just 50 per cent.
What are the 2017 road tax changes in detail?
Cars registered after April 1st 2017 will pay a one-off tax charge for the first year, with rates decided by a heavily revised version of the current CO2-based tax band system.
The adjustments mean most buyers will see their first year tax charge virtually doubled, while only zero-emissions vehicles will get away with paying nothing at all.
From the second year onwards, the CO2 scale becomes irrelevant, as two flat rates will then be applied – a £0 (zero) VED rate for zero-emissions vehicles only, and a flat annual rate of £140 for all other cars.
Reference Auto Express