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Tax Changes Set To Cost Car Buyers An Extra £400m In 2017Back

Research Reveals Half of Buyers Unaware of New Tax Affecting Low Emission Vehicles

Half of UK car buyers are unaware they may face a much larger vehicle tax bill on their next car following changes to vehicle excise duty (VED) set to be introduced in April, according to new research.

The survey of 1,000 car buyers carried out by NFDA Trusted Dealers this month found that less than half (45%) of people were aware of the changes, and of those who knew about them, one third (29%) did not understand what they meant in practical terms. Just 12 per cent understood they may have to pay more tax on an equivalent new car bought from April onwards, with the biggest impact on drivers of hybrids and many other low emission vehicles formerly exempt from road tax.

The changes, announced by former Chancellor George Osborne in the 2015 budget, mean that from 1 April 2017 the first vehicle licence will be calculated on a vehicle’s CO2 emissions, potentially shaking up budgets for millions of car buyers.

Under the current rules, cars that emit less than 100g CO2/km do not pay tax, but under the new legislation only vehicles with no tailpipe emissions, such as electric and hydrogen cars, will be exempt from the standard rate of vehicle tax.

This means an estimated 400,000* cars that were previously classed as being low emission will now be liable for a £100 charge in their first year, costing car buyers more than £400 million in 2017 alone. Luxury car owners will also be hit by the changes with even zero emissions vehicles exceeding £40,000 (including electric), liable for an additional rate of £310 a year for five years.

When asked whether the tax changes will make consumers less likely to buy a new vehicle, more than one in ten drivers (12%) said it would delay them changing their car in the immediate future.

The Government currently offers incentives up to £4,500 for car buyers choosing new ultra-low emission vehicles, but more than two thirds (64%) of those surveyed were unaware of the grants on offer.

Ten per cent of drivers believe more support needs to be available to encourage motorists to buy new and used ultra-low emission vehicles.

With the new VED rules due to be implemented in less than two months, Trusted Dealers has created a dedicated page on its website to help consumers understand what the tax changes will mean for them and answer any frequently asked questions.

Neil Addley, Managing Director of NFDA Trusted Dealers, said:

“The survey results clearly highlight that there is not enough information available to consumers about the changes and how it will affect them in practical terms. The increase in vehicle exercise duty will be significant for many drivers, especially those with low emissions vehicles who were previously exempt from the tax.

“Research suggests that buyers of smaller, more economical cars will face the biggest tax hike, in some cases paying up to nine times more than they currently do.

“The Government is again asking motorists to dig deep and spend yet more money to get their vehicles on the road, while equally not raising enough awareness about the impending changes, what they will cost motorists, or offering an effective alternative. To help, we’ve launched a new online portal to guide people clear advice on the changes.”

The SMMT reported a record January for alternatively fuelled vehicles, which grew nearly 20 per cent to take a 4.2 per cent market share –  the first time it has passed four per cent.

Trusted Dealers is part of the National Franchised Dealer Association (NFDA), one of the UK’s leading motor industry bodies. The site, which lists cars from the country’s top dealerships, offers complete peace of mind for those buying a used car online.

For more information, please visit

Posted by Paul Carpenter on 28/02/2017