Tax shock for new

car buyers

Volvo XC90 D5 Power Pulse, front, static
Tesla Model S P85D, front, action
Mitsubishi Shogun, front
Toyota Prius, front
Ford Fiesta, front
Ford Mustang, front

NEW tax rules are due to be introduced on April 1 which research from the HonestJohn website has revealed means the majority of new car buyers will pay much more in Vehicle Excise Duty.

And, at the same time, some high CO2 emission motors will actually pay less than before.

HonestJohn's figures show that new tax rules will add more than £500 to the long-term running costs of Britain's most-popular and eco-friendly vehicles, while providing significant benefits for some of the most-polluting cars.

This means the UK's best-selling car - the Ford Fiesta 1.0 EcoBoost 100bhp - will cost £540 more to tax over four years, while buyers of the new V8 Mustang stand to save £245 over the same period of time. This is despite the fact that the American muscle car emits three times more CO2than the efficient Fiesta.

Until now, the government has offered zero VED to entice car buyers into eco-friendly vehicles however, with 74 per cent of new cars emitting less than 130g/km of CO2, the government has made a U-turn on its policy and introduced rules to force buyers of new, efficient cars to pay more.

Under the current tax rules, vehicles that emit sub-99g/km qualify for zero VED for the first year and pay nothing for every year after, but from April the government will replace the current 13-band tax system with three new bands - zero, standard, premium - plus a surcharge for electric cars with a list price above £40,000.

This means all new cars bought after April 1 with sub-99g/km CO2emissions will pay for road tax, a move that will add up to £540 to the long-term running costs of some of Britain's cleanest and most efficient cars.

Even hybrids won't escape, with buyers of the Toyota Prius paying an extra £405 over four years, while Tesla Model S buyers will have to pay an additional £930.

However, while buyers of new cars over £40,000 will be forced to pay an extra £310 a year for five years, has found a gap in the tax law that allows some of the UK's most-polluting cars under the £40,000 price limit to benefit.

Buyers of the Mitsubishi Shogun 3.2 DI-DC automatic, for example, will save £265 over four years, regardless of the fact that the SUV produces a whopping 245g/km of CO2.

It's a similar story for the Subaru WRX and Nissan 370Z, with both emitting over 240g/km and saving hundreds under the new system.

HonestJohn's managing editor, Daniel Powell, said: "Many motorists are unaware of the changes that are coming for VED, but the fact of the matter is this - the system is changing, and low emissions cars won't be as tax efficient as they were before. It's a bit of a mixed message to increase tax on fuel efficient cars while reducing it on less eco-friendly models when the government is trying to increase the uptake of low and zero-emissions cars."

What's more, with buyers now rushing to secure a zero-VED car, HonestJohn has found that buyers are being given lead times of four to five months for the Mercedes-Benz C-Class and Volvo XC90.

Buyers of the popular Fiesta face a three month wait, while Focus orders with the EcoBoost engine stipulate a wait of 3.5 months, making it increasingly difficult to get a tax-free car before the new rules come into force.


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