Added: 21 February 2017

Everything You Need to Know About the 2017 Road Tax Changes

From 1st April 2017, the biggest changes to Vehicle Excise Duty (commonly known as ‘road tax’) for many years will come into effect. Instead of VED levies being calculated using a vehicle’s CO2 emissions, a flat-rate system will be imposed from year two onwards whereby almost all new car buyers will have to pay an annual sum of at least £140 – and often considerably more. The cost of ownership during year one is also set to soar, with the VED First Year Rate now as much as £2,000. This will raise the cost of VED drastically for nearly all models, from city car buyers who would previously be exempt to the owners of executive cars and SUVs, who will often see a three- or fourfold increase in the amount they pay every year.

Fewer exemptions for small cars

As of the 1st April only zero-emissions cars, i.e. cars with all-electric or hydrogen propulsion, will be completely exempt from VED. Even plug-in hybrids, whose emissions figures are typically assessed as under 50g/km, will be obliged to pay £10 in their first year and £140 thereafter. The numerous owners of superminis with emissions of 99g/km or under will also be obliged to pay £120 in their first year of ownership, before moving to the flat rate of £140 in subsequent years.

How VED changes could affect you

The vast majority of UK car buyers who purchase a new vehicle after 1st April are therefore set to pay substantially more in VED. Drivers who purchase and register new cars before 1st April 2017 will be able to do so under the current VED system – saving themselves hundreds or even thousands of pounds. At Windsors, we’re currently offering a great selection of savings across our entire range, to make it even more cost-effective to buy a new car before the approaching tax increases.

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