Martin Lewis gives money-saving advice on VED car tax
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The new tax bands for 2021 have seen traditional Vehicle Excise Duty (VED) rates rise for owners of polluting models. They said the new fees “only spare electric cars from any increase” with owners of petrol, diesel and hybrid models set to pay more.
Price differences between the polluting and cleaner engines were already massive with drivers paying thousands of pounds more to own a vehicle with a combustion engine.
Sepi Arani, Commercial Lead at Carwow said owners of an internal combustion Range Rover could pay more than £2,150 more than a similar model with a hybrid engine.
He said: “The purchase tax changes coming into force… only spare fully electric cars from any increase, with Hybrids facing a rise in tax alongside petrol and diesel vehicles.
“Those used to buying a car on the pricier side or perhaps a car that is less efficient will be the ones to bear the brunt of this purchase tax.
“For example, a Range Rover SVR, with its supercharged 5.0 engine will be paying a whopping £2,175 with a premium of £475 just in its first year.
“Yet the hybrid equivalent, the P400e, only paying as little as just £15.
“Sparingly, fuel duty remains frozen for this year, giving those still driving petrol or diesel cars a break from the ever-tightening restrictions facing motorists in the UK, a sigh of relief for many!”
Under the new changes, motorists who emit over 255g/km will see costs rise from £2,175 to £2,245.
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Drivers emitting pollution of between 226 and 255 g/km will see the highest increase with year one costs rising by £110.
Car dealer experts at Sandicliffe confirmed costs would be calculated based on the amount of CO2 emitted from your vehicle.
They said: “The greater amount of CO2 emitted by your vehicle will determine how much your Vehicle Excise Duty increases in 2021.”
Standard rates for those who have purchased their models since 2017 will also rise from £150 to £155.
Prices will stay the same for models which emit less than 75g/km with only the highest polluting vehicles affected.,
However, experts at Evans Halshaw has warned drivers to not be put off by the new rules changes.
They said: “If you’re looking to buy a brand-new car, then you shouldn’t be too put off by the initial first-year rate.
“It’s reasonably inexpensive on all but the bigger and most powerful cars currently available.
“However, if that doesn’t appeal, then you may want to consider looking for a pre-owned vehicle, where you won’t have to worry about the first-year rate.
“Plus, you can enjoy savings over a new car.”
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