Time is running out to beat the new car tax increase!

06 March 2017

by: Rachel Clarke

A new road tax structure is about to be put into place, commencing 1 April 2017, that will affect how much you’ll be paying for your road tax on new vehicles.

Most new cars registered on or after 1 April 2017 will be affected, whereas any cars registered before this date will continue to adhere to the old road tax system. This means, as the new system will make it more expensive to tax your car, now really is the best time to buy a brand new vehicle.


So what are the new changes?

Most new cars that fall under the new tax rule will be charged a variable amount dependent on CO2 emissions for the first year, after which a standard annual cost of £140 will be charged. Zero-emissions vehicles will continue to remain exempt from road tax charges, although if you choose to purchase a more luxurious vehicle (more than £40,000), you will have to pay an extra £310 per year for the first five years of ownership.

A brief example: the tax on a vehicle that costs less than £40,000 and emits 120g/km CO2 will cost £860 over five years of ownership, as opposed to £150 on the current structure.


Who is affected by the changes?

The changes will only affect new vehicles purchased after 1st April 2017 – all vehicles registered before this date will continue to benefit from the current scheme.


What is the benefit of buying ahead of the rise?

It’s simple, if you’re thinking of buying a new vehicle, in most instances it will be much more cost-effective to do so before the changes come into place.

The table below shows the cost comparisons of the existing and new road tax structure:

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