This coming April, the government is overhauling the Vehicle Excise Duty tax (VED),the system used to tax cars. Dependent upon how much CO2, your car is emitting, you may pay little to no tax as a standard rate. However, after April 1st, owners of cars that produce CO2 emissions will have to pay £140 road tax as a standard rate.
Under the current system, the amount of road tax you pay for the first year your car is registered varies between £0 for cars that produce up to 100g/km and £1,120 for cars that produce over 255g/km. With the incoming system, the amount paid is going to be increased for first-year road tax registration. Cars that do not produce any emissions still do not pay road tax for any year that they taxed as standard. Owners of cars that produce 1-50g/km will pay £10 for the first-year and that increases up to £2000 for cars that produce over 255g/km.
For cars that are worth more than £40,000, whether are electric or fuel-powered, there is an additional rate of tax equalling £310. This additional rate is only paid for the five years following the first-year registration. If the car’s worth drops below £40,000 in those five years, then the additional rate of tax stops being payable.
There are a variety of cheap lease cars available for you to consider that have zero road tax or the lowest rate to pay under the current system. We have five suggestions for you to consider getting before the road tax increase is introduced. You could find yourself saving a lot of money.
Nissan Leaf – 0g/km
The Nissan Leaf is a full-electric car that produces zero emissions across all its models. When purchased brand new, this car is worth between £21,000-£34,000 and therefore it also misses out on the additional rates. That means that with the Nissan Leaf, you will find yourself paying no road tax whatsoever now or then.
However, that arrangement does not extend to more expensive electric cars such as the Tesla Model S. The Tesla Model S is a premium, executive all-electric saloon taking on the likes of the BMW 5 Series, Jaguar XF and the Mercedes CLS. The one bonus with this car compared to its fuel-powered rivals is that it currently pays no first year or standard road tax.
However, the government have introduced the additional rates on cars worth £40,000+ from April. Cars worth that much must pay additional rates of £310 a year for a five-year period following the first vehicle licence. In the first year, you won’t have to pay any tax, and the next five years following that will require you to pay £310 a year for if the car is worth more than £40,000+. This means you will pay £1550 in road tax over those five years.
Volkswagen Golf 2.0 TDI Match Edition – 109g/km
The overhaul will affect all cars that produce CO2 emission, no matter how small the amount. Currently, after the first vehicle licence, cars producing up to 130g/km pay no tax. The Volkswagen Golf 2.0 TDI Match Edition, for example, produces 109g/km, therefore in its first year, you would currently pay £20 and after that, you pay no road tax.
However, with the new system, this will all change. From the 1st April, if you tax this Golf model, you must pay £140 in road tax for the first year. After that you should continue to pay £140 per year on road tax. This is one of the best example of the sharp increase in road tax that will occur when the changed come into effect. If you get this Golf model now and is registered before the 1st April, you will only have to pay £20 on road tax for the first year, so don’t wait because it’ll cost you.
The BMW 2 Series Active Tourer 225xe Sport is a petrol-electric hybrid engine and it produces 46g/km, which is great and costs around £33,000 to drive away with. You would expect this model to have no road tax on it and under the current system, you do not have to pay any such tax either in the first year or as standard. It is a great incentive to get a hybrid car like the 2 Series Active Tourer before the new system comes into effect.
Following April 1st, you must pay £10 road tax for the first year this car is registered and then £140 every year after that as standard. Because this model is worth less than £40,000+ you don’t have to worry about the additional rates in the new tax regime. It is worth getting this car now before April because then you avoid having to pay any road tax at all for the first year.
Some cars are designed entirely to be affordable to purchase or lease and run. The Renault Clio 1.5 dCi 90 Dynamique is one such car. Brand new, it is worth around £17,000 and cheaper if you go for a used model. This model produces 92g/km meaning currently you pay zero road tax. The affordability of this car to lease and run is an excellent reason to get this car before April to avoid the additional costs.
Under the new system, you must pay £120 for the first year this model is registered, followed by £140 a year as a standard rate. In order to avoid paying that much money on road tax, enquire and lease it before April 1st.
The changes in road tax could cost you more money that you necessarily wish to. If you do wish to save money by avoiding such an increase for at least a year, it is worth considering low cost car leasing on such suggested vehicles before April 1st 2017. You can choose any of the cars suggested above and many more with Hippo Leasing.