Despite only being in its first year, road tax is getting a shakeup in April. Make sure you’re in the know about the 2018 VED change.
Back in April 2017, the VED (vehicle excise duty, aka road tax) system was overhauled. Excluding the first year payment, a flat annual rate of £140 was applied for all petrol and diesel cars costing under £40,000. Hybrids and other alternative fuel vehicles get a very slight discount for their greener vehicles, paying £130 from the second year onward. And if your car is zero emissions and worth less than £40k, you pay nothing.
For drivers of cars valued over £40,000, the new rules are even more costly. Regardless of emissions, they’ll be hit by an additional rate of £310 for the first five years. And yes, that does include zero-emissions vehicles.
It is only the first year that has any resemblance to the old system, creating a banded system based on CO2 emissions. However, there are more bands than before, meaning prices goes up much faster.
But all this happened a year ago, so why are we writing about it now? Well, despite not even being a year old, the Government has already started tweaking the system. So here’s a summary of the 2018 VED change and how they’ll affect drivers and car buyers.
First year of flat-rate payments
Cars registered from 1st April 2017 will be subject to the first year of flat-rate payments. That means if you’re in the market for a nearly new car, you could avoid the high first-year payments all-together by buying a 17-plate car (as long as it wasn’t registered in March).
To see what ex-demonstrator vehicles we have in stock, visit our website.
Price hike for diesel cars
The main 2018 VED change applies to diesel cars registered after 1st April 2018. Announced as part of the Autumn Budget, diesel cars will be subject to a one band increase if they do not meet the Euro 6 standards under real-world testing (RDE). This will increase the first year payment by anywhere between £15 and £500.
|CO2 emissions (g/km)||Current first year VED rates||First year VED rates for diesel cars bought from April 2018 not meeting real-world Euro 6 Standards (RDE)|
The change came in response to the continued demonisation of diesel vehicles. In his budget statement, Chancellor Philip Hammond clearly pushed the responsibility for improving diesel engines to meet the new real-world standards onto manufacturers, stating “Drivers buying a new car will be able to avoid this charge as soon as manufacturers bring forward the next generation cleaner diesels that we all want to see.” However, most manufacturers were planning for the switch to the new real-world standards to take place in 2020, as per previous Government announcements, alongside the switch to WLTP testing, and it is not as simple as just introducing the new technology earlier than planned.
The Society of Motor Manufacturers and Traders (SMMT) has also pointed out that the claimed environmental motivation for this sudden change to the timeline for diesel cars is less than convincing. “Diesel particulate filters capture 99% of all soot particulates, and are now fitted to every new diesel car” stated the SMMT. And as 2018 VED change will only impact new, cleaner diesel cars, it could actually encourage those looking for diesels to go back to an older, dirtier generation of engines which still fall under the old tax system, where diesels cars usually paid under £100.
All of our new and used car pages display the VED rate. To find out more about Mazda, Suzuki or our used car stock visit our website or contact our sales teams in Bookham, Weybridge and Orpington for Mazda, and Effingham for Suzuki.