Avoid a taxing time - buy a used car

21/03/2017

Avoid a taxing time - buy a used car

You’ve probably seen some reports mentioning changes to car tax - or, to give it its official name, Vehicle Excise Duty - which are coming into effect from 1 April.

It’s a big deal among the new car sector, quite simply because it affects the bottom-line price - and ongoing running costs - of new every car sold in the UK which doesn’t have zero emissions of carbon dioxide.

And here’s the key - the only vehicles it affects are those registered as new for the first time after 1 April.

The change sees the introduction of a series of new Vehicle Excise Duty (VED) bands, which are based on CO2 emissions. Yes, this is similar to the system which applied before 1 April - but there are some big changes in the tax bands, and the rates of tax which are paid by owners of vehicles powered by alternative fuels (for example, bio-ethanol or liquefied petroleum gas - LPG).

The Flashier The Car - The HIgher The Tax

The biggest hit will be taken by those people lucky enough to be able to afford a new car which costs more than £40,000, and whose CO2 emissions are anything over 111g/km. The sliding scale of the one-off new vehicle charge levied according to CO2 levels tops out at £2,000, for any car which pumps out more than 255 grammes of CO2 per kilometre.

The new first-year VED rates - which are being widely referred to in the trade as a ‘showroom tax’ - also use the same bands as the recurring VED scale. But under these you’d pay nothing extra if your new car had emissions of 130g/km and below, the rest of the bands being as follows:

  • Band E (131-140g/km) - £130
  • Band F (141-150g/km) - £145
  • Band G (151-165g/km) - £185
  • Band H (166-175g/km) - £300
  • Band I (176-185g/km) - £355
  • Band J (186-200g/km) - £500
  • Band K (201-225g/km) - £650
  • Band L (226-255g/km) - £885
  • Band M (Over 255g/km) - £1120

So as you can see, once you get beyond Band G, the amount of tax payable when you first register your car really starts to climb. The government’s intention is to make people really think about the amount of tax they can afford to pay, and to make this a more important part of their calculations whenever they’re buying a new car.

Avoid A Tax Hit - Buy Used

But there’s one obvious way you can avoid this big financial hit, of course - and that’s to look into buying a used model of the car you really want.

Yes, you’ll still have to pay road tax, but there’s no extra first-year VED to pay on top of all the other big sums you have to splash out when you choose a new car. Instead, the amount you pay is, as before, a single annual sum based on the old bands, which are as follows, provided the vehicle you choose was first registered after 1 March 2001:

Band

CO2 emission (g/km)

Single 12 month payment

Single 12 month payment by Direct Debit

Total of 12 monthly instalments by Direct Debit

Single 6 month payment

Single 6 month payment by Direct Debit

A

Up to 100

£0

Not available

Not available

Not available

Not available

B

101-110

£20

£20

£21

Not available

Not available

C

111-120

£30

£30

£31.50

Not available

Not available

D

121-130

£110

£110

£115.50

£60.50

£57.75

E

131-140

£130

£130

£136.50

£71.50

£68.25

F

141-150

£145

£145

£152.25

£79.75

£76.13

G

151-165

£185

£185

£194.25

£101.75

£97.13

H

166-175

£210

£210

£220.50

£115.50

£110.25

I

176-185

£230

£230

£241.50

£126.50

£120.75

J

186-200

£270

£270

£283.50

£148.50

£141.75

K*

201-225

£295

£295

£309.75

£162.25

£154.88

L

226-255

£500

£500

£525.00

£275.00

£262.50

M

Over 255

£515

£515

£540.75

£283.25

£270.38

These days, you’ve got almost as wide a choice of used cars as you have completely new models. It means that, if there’s a car you’ve really set your heart on, you can probably find it somewhere.

Or why not let us do the searching and all the legwork for you? At Philip Paul, you can benefit from our wide trade experience to help you find the model you really want - and all without that nasty initial shock of a showroom tax to contend with!

One thing’s for sure - what with the likelihood of your car losing its value more slowly than if you’d bought it new, and the knowledge that it’s already been thoroughly run-in, so any initial teething problems will have been ironed out, there are plenty of good reasons to look for a quality used car first.

Yet you’ll still have a choice of flexible and competitive finance packages making it possible for you to afford the car you really want - with no nasty surprises standing between you and driving away in it!

In the long term, the changes make it more worthwhile for manufacturers to design and build cars which at least fall into the sub-100g/km bracket for CO2 emissions, as, over the long term, it’s only the owners of these vehicles who’ll pay less than the standard rate. And it’s this incentive which, the government must be hoping, will drive further progress towards meaningful reductions in CO2 levels.

Who’ll Benefit From The Changes In The Tax Regime?

The government claims we all will. That’s because it’s planning to put the extra money raised into a pot to be used to pay for maintaining the main roads and motorways of the UK.

But the motor industry remains worried that the moves won’t go far enough towards speeding up the wider adoption of low-emissions car, and may even deter some people from buying the new, less polluting cars which will make a bigger contribution towards making meaningful cuts in our output of damaging greenhouse gases.



There’s a great selection of quality used cars to choose from at Philip Paul in Oswestry, none of which are subject to the new tax system. Start by browsing our website to narrow down your choice, then come down and see our cars close-up, and take a test drive to help you find the one which ticks off all the items on your list of requirements.