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.
|Band||CO2 emission (g/km)||Petrol & Diesel cars|
|A||Up to 100||£0|
|CO2 emission (g/km)||Petrol & Diesel cars 1st Year rate||Petrol & Diesel cars Annual Renewal rate*|
The road tax will also not affect any vehicles that are registered before April 1st 2017. Some key highlights are the following changes.
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.
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 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|
|Total annual payment||£310||£440||£450|