Road Tax Rules For 2017 – Why You Should Buy a Car Before the 1st April 2017?

December 11th, 2019

You might be surprised to know that from the 1st of April 2017 there would be some major changes in the Vehicle Excise Duty (VED) or road tax as we call it in general terms. This may affect you in a big way if you are planning to buy a car after the 1st April 2017. However, there is nothing to worry in case you purchase the vehicle before this date or anytime until the end of March this year.

What is the need for changes in the VED?

Well, as per the budget of summer 2015, every car needs to pay road tax including those with lowest rate of carbon emission. As per the government, it runs out of pocket when people buy all kinds of fuel efficient and low carbon emitting cars. Therefore, they made changes in the VED system and according to the new system only the cars with 0g/km CO2 emissions would be exempted from paying road tax.

According to the rules, since March 2001, the cars that throw less than 130g/km CO2 paid no road tax in the first year and had to pay very little VED in the following years. So, if you buy a car in band B 101-110g/km, you don’t pay anything in the first year but, pay a nominal amount of £20 for the following year. This nominal cost of the road tax has now changed and from April 2017, drivers would pay £140 in the first year and the year following it.

For drivers who are buying cars before April 2017, this rule does not apply and so, they would pay very little road tax compared to £140 a year. There is a sliding scale for the VED and it is free for electric cars that emits zero CO2 and would cost a monstrous £2,000 for cars that exceed 255g/km in CO2 emissions.

This is good news for people who plan to buy less efficient cars as they have to pay higher road tax only in the first year as from the second year the amount payable as road tax would be limited to £140. However, there is another side to the story, as the VED system now considers the price of the vehicle as well. According to the new rules, any vehicle with a price above £40,000 purchased after April would be liable for an additional payment of £310, which would be payable for five years.

Why should I buy a car before the 1st April 2017?

Well…to save yourself from paying a hefty road tax because if you buy a vehicle before April 2017 then you do not fall under the new rule. For any vehicle bought on or after the 1st April, higher VED is applicable which would drain hundreds of pounds from your pocket. Moreover, higher priced cars will have extra VED applied against it. So, the best way to escape high VED is to buy the vehicle before the 1st April 2017.

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