A survey by Carbuyer has discovered that consumers are largely unaware of the forthcoming road tax changes, which will affect new cars sold from April.
According to Carbuyer, drivers of the lowest-emission petrol and diesel cars could be hit with a price increase of £140 a year and those buying a car costing more than £40,000 will have to pay a £1,550 levy over the first five years of ownership.
More than 4,000 people took part in an online poll, which asked readers how up to speed they were about the new road tax changes. Just six per cent were fully aware of it.
The survey also revealed that just eight per cent knew changes were coming – but 86 per cent had no idea.
Under the current scheme, many cars are exempt from road tax, or Vehicle Excise Duty (VED). That’s because they emit less than 100 grams per kilometre (g/km) of carbon dioxide (CO2).
For cars registered after April 2017, though, only those that produce no CO2 – fully electric and hydrogen cars – will be spared road tax. All other models registered from then will be liable for an annual road-tax bill of £140, regardless of CO2 emissions. While the first year of road tax will still be based on CO2 emissions and range from £10 to £2,000, this fee is almost always absorbed in a car’s on-the-road price – meaning it isn’t usually seen as a running cost by consumers.
However, cars with a list price of more than £40,000 will also incur an additional £310 levy for the first five years of ownership, bringing their total annual VED bill to £450 during that time.
Carbuyer editor Stuart Milne said: “While the changes should provide more reasons for cost-conscious buyers to choose a fully electric vehicle, they remove much of the incentive for buyers to choose low-emission models with a petrol or diesel engine. Remarkably, a 1.0-litre Vauxhall Corsa will attract the same tax bill as a 5.0-litre Ford Mustang once the first year of tax has been paid.
“Buyers should also be aware that the list price includes the cost of any options. Choose too many extras and you could unwittingly push your car’s price above £40,000 – that’ll cost you an additional £1,550 over five years.”
The new road tax scheme won’t apply retrospectively, so whichever road-tax system was active when you registered your current car will continue to apply for as long as it’s on the road.
Read Carbuyer’s guide to the new tax system for more information about the forthcoming road tax changes.