At the last Budget, huge changes to road tax charges were announced which will apply to any new vehicle registered on or after 1st April 2017.
These changes were made as more modern cars produce minimal CO2 emissions, meaning that most new cars are either exempt from road tax or pay very little under the current regulations. With the new system, motorists will have to pay a higher price for road tax in the first year of registration, followed by a flat rate every year thereafter. These changes may not be welcomed by all, but the Chancellor has formally announced that all money raised from these payments will actually be put into a road fund to repair the nation's roads.
Under the new road tax system, all cars are divided into one of 13 bands for the first year of registration based on the vehicle's CO2 emissions. From the second year of registration onwards, a three band system takes over. These three bands are: zero emissions, standard and premium. Zero-emission vehicles under the value of £40,000 will pay no tax whatsoever, whereas standard cars will cost £140 every year from year two moving forward. Any vehicle that emits CO2 and costs over £40,000 will cost £450 per year from the second year, until the sixth year after registration when it will cost £140 per year.
These bands mean that, from 2017, only all-electric cars that cost under £40,000 will be free to tax. This will come as a huge shock to owners of low-emission hybrids whose vehicles are currently free to tax!
It all sounds very complicated to us, so we've put together a simple table which will hopefully make these road tax changes a bit clearer. Take a look below...
|CO2 Emissions (g/km)||First year rate||Standard rate (year two onwards)||Standard rate (year two onwards) for cars costing >£40000*|
|More than 255||£2000||£140||£450|
So, if you're planning on buying a brand new car, now really is the time to buy! Contact your local Vantage centre today to avoid disappointment (and the road tax increases)!
*Payable for 5 years