Road tax changes

[MetManMark]

All

We are considering a auris touring hybrid. With the road tax changes coming in next year even new hybrids will have to pay £140 / year road tax compared with £0 now. Do folks think this will impact prices of second hand hybrids (ie they might go up!)? We are currently looking at year old versions and typically keep hold of our cars 10 years :).

Mark

[FROSTYBALLS]

Doubt whether there will be much, if any effect, and certainly not a long term effect, on any cars currently with either nil or low VED rates (ie those currently rated at £20 and £30 per year or similar).

The revised VED rates coming in from April may be a bit of an incentive to lease or buy new in 2016, but finance offers, etc will probably have more of an influence.

Of course if there is a large increase in new car sales this year, that may have a negative effect on used car prices in 1-3 years time - more used cars coming onto the market, more choice for the used car buyer, depressing prices, etc.

[Anthony Poli]

I'm sure the selling point will be the mpg, as all cars will be the same ved. 

[myriagon]

Zero emission vehicles will still pay no road tax after April next year. That could help more people move to EVs, however I suspect given how many company cars there are in the UK, the BIK rates will have more influence.

According to http://www.nextgreencar.com/company-car-tax/bik-rates/ the BIK rate for EV cars is increasing from 5% up to 16% in 2019/20. That's still very competitive compared to the rates for petrol and diesel so I expect more company car drivers driving EVs.

[Beekeeper D]

22 hours ago, Anthony Poli said:

I'm sure the selling point will be the mpg, as all cars will be the same ved. 

 

It looks as though you may be missing the point that a 66-plate (and earlier) Auris Hybrid will continue be taxed as a "Band A" car (at whatever rates may then be in force) whereas a 17-plate example will be taxed on the new 'flat rate' scheme (at whatever rates may then be in force). 

Only cars first registered after April 2017 will be on the new scheme. 

Although a Band A car (like the Auris Hybrid) is currently £0.00 annually, only a certified optimist would expect that to continue for long. 

Where Band A may (in future) sit compared to the rates for future new vehicles, I have no idea, but I'd expect it to be lower than the rate for Bands B, C, D etc ... 

 

I can see this being an incentive to buy a new fuel-efficient vehicle before April 2017, but I'm not expecting the advantage to last forever. At roughly £100/year saving (for now) it shouldn't be a major price determinant. 

As regards residuals in 10 years time, what will a 9-year old Tesla fetch? What price will petrol be? (Before or after Trump nukes anyone?) 

I've no idea of those answers, but the one thing that does strike me is that there is no VED incentive to delay purchasing a fuel-efficient vehicle (whatever your annual mileage). 

[MetManMark]

Hi Beekeeper

I am somewhat sensitive to the Road Tax policy. This is because our saab 9-3 attracts £240 / year road tax (incidentally I keep a track of fuel that I have used and it averages something like 36mpg doing fairly mixed driving which I think is pretty good!).

Moving to a auris hybrid will save us a slug of money every year if we buy a year old model this year. If we delay then as I understand it a auris hybrid car registered after next year will attract the same road tax as say a petrol civic estate.

M

[FROSTYBALLS]

1 minute ago, MetManMark said:

Hi Beekeeper

I am somewhat sensitive to the Road Tax policy. This is because our saab 9-3 attracts £240 / year road tax (incidentally I keep a track of fuel that I have used and it averages something like 36mpg doing fairly mixed driving which I think is pretty good!).

Moving to a auris hybrid will save us a slug of money every year if we buy a year old model this year. If we delay then as I understand it a auris hybrid car registered after next year will attract the same road tax as say a petrol civic estate.

M

It is only vehicles first registered on or after 1st April 2017 that will be taxed at the new rates. Vehicles first registered before 1st April 2017 will retain the 2016/17 rates (ie the current rates).

For example if one buys a new Auris hybrid and it is registered on 31st March 2017 on a 17 plate, it will currently have the zero rate VED. If it is registered on 1st April the VED will be £140.

However, there is always the possibility that VED rates for vehicles registered before April 2017 may be changed in the future, as is the wont of current and future chancellors - so don't bank on the VED remaining the same during a period of one's tenure.