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Vehicle tax (VED) is changing...

VED Road Tax Changes For 2017

You may have heard about the new road tax rules but what do they mean for the car that you currently drive? Is it better and more cost effective to purchase a car before or after the new system comes into force in April? We have made all of the confusing bits and jargon digestible so you understand the new VED road tax before the change from April 2017.

The price increase in road tax is set to help reduce CO2 emissions from new cars, that currently pay little or no tax. This means that new cars that are registered after April 2017 will pay higher tax prices in the first year of their registration and a flat rate of £140 per year for majority of cars after.

This means that in some cases it is cheaper to buy a new model now than what it would be after the new tax changes from April 2017. We have outlined examples below of what road tax you pay now and what you will be paying after the VED increase.

Cars registered 1st March 2001 until 31st March 2017

Band CO2 emission (g/km) Petrol & Diesel cars
A Up to 100 £0
B 101-110 £20
C 111-120 £30
D 121-130 £110
E 131-140 £130
F 141-150 £145
G 151-165 £185
H 166-175 £210
I 176-185 £230
J 186-200 £270
K 201-225 £295
L 226-255 £500
M Over 255 £515

Vehicles registered on or after 1st April 2017

CO2 emission (g/km) Petrol & Diesel cars 1st Year rate Petrol & Diesel cars Annual Renewal rate*
0 £0 £140
1-50 £10 £140
51-75 £25 £140
76-90 £100 £140
91-100 £120 £140
101-110 £140 £140
111-130 £160 £140
131-150 £200 £140
151-170 £500 £140
171-190 £800 £140
191-225 £1,200 £140
226-255 £1,700 £140
Over 255 £2,000 £140

The road tax will also not affect any vehicles that are registered before April 1st 2017. Some key highlights are the following changes.

  • If a customer buys a brand new vehicle registered on or after 1st April 2017, after the first licence the majority of vehicles move to the standard rate of vehicle tax which is £140 a year.
  • If the vehicle list price was over £40,000 at first registration, the customer will pay £450 a year, after the first vehicle licence. This is made up of the £140 standard rate and £310 additional rate. After five years the vehicle tax will revert to the standard rate of £140 per year.
  • Vehicles with a list price exceeding £40,000 with zero emissions (including electric) will pay the additional rate of £310 a year for a 5 year period, after the first licence. After the 5 year period these vehicles will pay zero vehicle tax.
  • Alternative fuel vehicles will continue to to receive a £10 reduction on vehicle tax rates.
Example Alt Tag to Be Added Example Alt Tag to Be Added

Cars that are Exempt from VED Road Tax

Currently the system exempts all low-emission petrol and diesel cars from VED road tax, the new system will change this. This means that all petrol and diesel cars that have low CO2 emissions will still have to pay the new VED road tax. The only vehicles that will be exempt are electric and hydrogen cars such as the Nissan Leaf & Kia Soul EV.

What car should I choose?

Choosing the right car for you would all depend on the emissions and whether the vehicle is cost-effective for how often you use it. Although purchasing and registering a car before the 1st April would mean you wouldn’t have to pay the new road tax, the tax band of the vehicle could see you paying more in the future. To find out more you can view and download the document from the DVLA below.

If you are thinking of saving yourself from having to pay the £140 to the tax man, then check out our great offers across our range of Ford, Nissan, Mazda, Kia and ŠKODA models.

Are you taxing a new vehicle with a list price of £40,000 or more?

If so, here’s everything you need to know when you tax your vehicle on or after the 1st April 2017. The list price of £40,000 is the price published before any discounts are taken off. The rate of pay will then depend on the CO2 emissions. As the vehicle is brand-new, your first 12 months of tax will be charged at a standard annual rate. After that, an additional rate will be added for the next 5 years. Of course, these rates differ depending on the vehicles fuel type. Here’s a quick breakdown of the prices.

Fuel Type Electric Alternative Petrol or Diesel
Standard annual rate £0 £130 £140
Additional rate £310 £310 £310
Total annual payment £310 £440 £450

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