Changes To Road Tax Rules for 2017

Confused about changes to road tax and how they might affect you? Chat with us now to find out (simply hit the ‘chat now’ button on the right hand side) or have a read through our guide below. If you’ve any questions get in touch and we’ll be happy to help.

The rules regarding Vehicle Excise Duty (VED) - otherwise known as road tax, to you and me - are changing on 1st April, 2017. The changes are designed to increase road tax revenues. Under current rules, many new cars are paying little or no tax - a situation which the Treasury says is unsustainable.

The changes apply only to brand new cars registered on the 1st April, 2017 or after. Your existing car, and any second-hand car you buy that was registered before this date, will continue to use today’s rules.

Cars registered after 1st April, 2017 will pay a one-off charge for road tax in the first year, of anything from £10 to £2,000 depending on the CO ₂ tailpipe emissions. In every subsequent year, every car will be subject to a flat rate of £140/year. The only cars that will be exempt are those with zero CO ₂ emissions: essentially, electric and hydrogen cell-powered cars.

There’s more: any cars with a list price of £40,000 or more - even zero-emissions vehicles - will be subject to an additional, annual £310 ‘Premium’ supplement for year two to year five, which applies to all cars. If you buy a cheaper model and load it up with factory-fitted options that push it over £40,000, you’ll also be charged the supplement. And any discounts your dealer gives you to bring you under that magic £40k figure won’t be taken into account, either.

As with any tax change, there will be some winners and losers after the changes come into effect. Buyers of efficient, less-polluting cars including the Ford KA+, Fiesta and EcoSport will pay more tax over the course of their ownership. Similarly, people who drive expensive (£40k+) cars and change them for a new one every three years will also be paying more.

On the other hand, buyers of more-polluting cars like reasonably-prices sports cars and SUVs will be better off - but only if they keep the car for years and years. These sports cars and SUVs will also be cheaper to tax as a second-hand car than they are at the moment. We’re going to use the new Ford Edge Sport to illustrate our point.

It emits 152g/km of CO2, so under current rules costs £185 a year to tax, including the first year. Under the new rules, it will cost £500 to tax in the first year, and £140 a year after that. Over ten years, cars registered after 1st April, 2017 will actually cost £90 less overall to tax (£1,850 vs. £1,760). But if you’re buying one brand new and not keeping it that long, you’ll also have paid more than you would have.

If you want to enjoy the lower road tax rates that apply to today’s cars, buy and register your brand-new car before 1st April, 2017. If that deadline is too soon for you, we’ve compiled a selection of nearly-new models that have already been registered and benefit from the lower rates too. Browse online now and contact us to arrange a test drive for a convenient time.​

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