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  • 20 February 2017

    2017 VED Road Tax Changes. How Will It Affect Me?

    On the 1st of April 2017 the new VED road tax will come into play. We know, it's all very confusing. What does this mean? Let’s start from the basics.

    • What is VED? It stands for Vehicle Excise Duty it is also known as Car Tax, Road Tax and Vehicle Tax and applies to any vehicle being used on the road. The amount is based on engine size and theoretical CO2 emissions and is focused on the environmental implications of your purchase.
    • Who will it affect? The short answer is anyone buying a car after the 1st of April 2017. All new cars registered on or after this date will be subject to the new rates, and cars registered before this date will be and will remain unaffected.
    • Are any vehicles exempt? There’s a variety of classes and vehicles that are exempt.
      • Fully Electric Vehicle
      • Vehicles older than 40 years
      • Trams
      • Vehicles that cannot carry people
      • Police Vehicles
      • Fire Engines
      • Ambulances
      • Health service vehicles
      • Mine rescue vehicles
      • Lifeboat Vehicles
      • Certain road construction and maintenance vehicles
      • Vehicles for disabled people
      • Certain agricultural and land maintenance vehicles  
      • Road gritters and snowploughs
      • Vehicles undergoing statutory tests
      • Vehicles imported by members of foreign armed forces
      • Crown vehicles
    • Is it better to buy now or after the change? This depends entirely on the type of vehicle you are wanting to buy. Depending on what you want from a vehicle and for how long… So, if you are wanting to buy a eco-friendly, low emission vehicle and own it for a substantial amount of time then you’d be better off buying it before the change. But, if you are thinking of getting a high-emission vehicle and want to keep it for a long time, then you’re better off waiting till after the 1st of April as charges will actually work out less over ten years then ‘pre-change’ costs. And, if you are intending on buying a car that costs £40,000 or over then we suggest you purchase it before the 1st of April UNLESS it’s not an eco-friendly vehicle you intend to keep it for over 5 year. Take this for an example:
      • A car that is rated at 100g/km or lower and so free of road tax under the current VED will now cost the owner £1,380 over ten years. If you can purchase the same car before April 1st then you’d be silly not to
      • If you’re looking at a vehicle with emissions of 226g/km you could be looking to save nearly £2,500 over ten years
      • If you waited till after the changes to come to buy an expensive 100g/km vehicle, it would cost an extra £2,930 over the 10 years!   
    New car tax rates to 31 March 2017
    Source: telegraph.co.uk/cars/advice/how-will-the-new-car-tax-prices-affect-me
     
    • What are the biggest changes?  The biggest and most notable change is that hybrid vehicles will no longer be rated as £0 and cars with a retail price of £40,000 or over will pay a supplement fee for the first five years.
    • What happens to your road tax if you sell the car? Under the new VED, road tax is not transferable. The seller would get a refund of the remainder and the buyer would have to re-tax the vehicle. The tax refund will be sent automatically once the DVLA are informed, sellers must inform the DVLA of any change or face £1000.
    • Why the change? Targeting the ever decreasing tax charges, as cars become increasingly cleaner. At the moment all cars with emissions of 100g/km and below are not subject to any tax, and given that green technology is coming on in leaps and bounds and purchasing plans for new cars are super accessible the amount of taxable emissions are on the decrease. It is estimated that a quarter of all vehicles do not currently pay tax as they fall into Band A of the VED, and this is causing a massive shortfall in  

    Car Tax Chart For 20132016 Car Tax ChartFrom en.wikipedia.org/wiki/Vehicle_Excise_Duty

    • What are the worst cars hit? Here’s a list of some of the vehicles that are worst hit by the changes, unsurprisingly they all cost over £40,000 and the VED rates are that of a six year range. If you want a more detailed discussion regarding this then have a look at Honest John’s Blog.
    Land Rover Discovery £41,600
    • VED six year total 2015: £2090
    • VED six year total 2017: £3450
    • Difference: £1360
    Tesla Model S £59,935. FULLY electric
    • VED six year total 2015 : £0
    • VED six year total 2017: £1550
    • Difference: £1550
    BMW 3 Series ActiveHybrid 3 SE £41,385
    • VED six year total 2015: £720
    • VED six year total 2017: £2450
    • Difference: £1730
    Volkswagen XL1 £98,515. Emissions are only 21g/km!
    • VED six year rate total 2015: £0
    • VED six year rate total 2017: £2260
    • Difference: £2260
    So, this should give you a better insight into what and who is affected and how. The good news is that we don’t stock any of the above! We have a wide range available including our fully electric vehicles and we will be happy to advise on the best course of action.

Howards Garages (Weston) Ltd is an Appointed Representative of Automotive Compliance Ltd, which is authorised and regulated by the Financial Conduct Authority (FCA No 497010). Automotive Compliance Ltd's permissions as a Principal Firm allows Howards Garages (Weston) Ltd to act as a credit broker, not as lender, for the introduction to a limited number of finance providers and to act as an agent on behalf of the insurer for insurance mediation activities only.