The new tax laws are very complicated and as such you need a degree to work out every aspect of how it affects individual cars.
However, our aim is to try and make it as clear as possible depending on what car you drive.
First of all, what’s changed. Well the Government in their infinite wisdom has decided to change the VED not once but twice concurrently first in 2017 where road tax was changed from rates based on just emissions yearly to a rate based on emissions for the first year which is included in the on the road price of the vehicle so is more of a hidden cost. The cost YOU will be paying annually is a flat rate for subsequent years.
So, for example a Ford Focus 1.0 EcoBoost petrol engine would have qualified for the low emissions tax not so long ago but any registered after April 2017 would now be hit with a £140 per year charge.
This rate varies depending on whether your vehicle is electric, powered by a combustion engine (petrol or diesel) or uses an alternative fuel source (plug-in hybrid, LPG, etc). In addition, a supplement is added for the first five years of road tax if cars cost more than £40,000 new, irrespective of whether it's electric, petrol, diesel or hybrid.
So, the government already increasing revenue through new 40k fat rates system and cars over 40k. But it doesn’t end there, they have also decided this year to change the taxes to penalize new diesel vehicles meaning that the older dirty diesels that have been brandished as being extremely harmful to the environment will now be potentially cheaper to tax than the newer, more refined and cleaner 2018 diesel engines.
So, this means that if you are in a 4-year-old car on a PCP for example and it is BMW 1 series 116d SE and you went and swapped it at your local BMW dealer for a new model on an 18 plate today the price to tax it in the first year will increase and this can be seen across the board with the some of the bigger engines seeing a rise up to £400 in year 1 for a Porsche Cayenne in the 171 – 190 co2 g/km bracket for example. This along with the charges to drive a diesel in cities like London are just more examples of the efforts being made to get these cars off the British roads as soon as possible.
Below is a graph that breaks down how these price changes will look for each tax band
These changes are also going to have an effect on people who lease their cars as the first-year tax fee will be rolled into monthly payments across the board, so it may be worth doing some math’s and seeing if the overall running costs are still “cheaper” for you if you were to go for that diesel over a petrol or electric vehicle when you are due to switch your next lease agreement.
Still not quite making sense of it all? Well feel free to drop us an email on firstname.lastname@example.org and we will try to shed some light on how the car tax merry go round will affect you