Tuesday 17 January 2017

Road Tax Hike Set To Cost Drivers More Than Expected

Road Tax

The Vehicle Excise Duty — or road tax — is set to change in April and some motorists will be hit with a big jump in the amount they have to pay each year.

Back in 2015 George Osborne announced the proposals with the plans aiming to reflect improving emissions technology in newer cars.

Who will be affected?

The new tax model will affect anyone buying a car after April 1.

Duties on some emission heavy models will soar, while electric and hydrogen cars will be exempt from the hike.

Those buying low emission cars will particularly suffer because under the old system cars emitting 99g/km are free of road tax for life.

But after April 1, new low emission car drivers will be forced to pay £120 in the first year and £140 every year after.

From the lowest emitting cars to the highest, all vehicles will suffer a price hike with the highest possible charge on those emitting over 255g/km.

How can I save?

But despite the changes there are ways you can save cash.

If you’re planning to buy a new car this year it may be worth keeping April 1 in mind to either cash in on the new system or reap the benefits from the old one.

Those looking to buy a low emission car such as a hybrid or small petrol-powered model may want to buy before April 1 when the tax will be cheaper.

But if you’re looking to purchase after April, then a nearly-new car will be the cheaper option as they will continue to be taxed under the old system.

For drivers buying heavy polluting cars the initial cost will increase sharply, but should break even after around four years.

That’s because the first year of tax will be more expensive but the subsequent years will be cheaper than the old system.

Why the change?

The proposals reflect the improvements in technology at cutting CO2 emissions.

Under the current system cars emitting under 120g/km don’t pay any tax — but that now applies to around 75% of all new vehicles.

To avoid the costs, now only electric or hydrogen cars will benefit from no road tax.



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