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Auto Express Car Reviews
New tax bands hit used values
Revised Vehicle Excise Duty rates set to hit second hand values.
By Ross Pinnock
11th April 2008
It's worse than it looks! That’s the verdict on the latest shake-up in road tax rates from one of the UK’s leading used car price guides.
The dust has settled on the Government’s re-banding, but experts from Glass’s Guide expect it to hit residual values once buyers understand what the overhaul means for them. They’re warning motorists to get clued up.
“Awareness is important, because people making used purchases today will retain ownership for at least the next three years,” said the guide’s managing editor, Adrian Rushmore. “This means they will suffer the additional expense of future increases in duty.”
Worst affected are cars that emit more than 225g/km of CO2 which were registered after 1 March 2001, but before 23 March 2006. These cars, such as the petrol-auto Ford Galaxy pictured, will move from the current band F to new L or M bands next year, depending upon their emission levels. Their annual road tax bill jump from £210 to at least £415.
“As prices for older cars fall over time, the tax burden comes into greater focus, reducing demand and values,” said Rushmore.
Anyone with a Band E rated car (producing 166-185g/km) currently paying £170 could migrate to band J next year, when they will have to foot a bill of £260 for road tax. Vehicles that currently reside at the top of group F (above 201g/km but less than 225g/km) will see their bill increase from £210 per annum to £300.
The dust has settled on the Government’s re-banding, but experts from Glass’s Guide expect it to hit residual values once buyers understand what the overhaul means for them. They’re warning motorists to get clued up.
“Awareness is important, because people making used purchases today will retain ownership for at least the next three years,” said the guide’s managing editor, Adrian Rushmore. “This means they will suffer the additional expense of future increases in duty.”
Worst affected are cars that emit more than 225g/km of CO2 which were registered after 1 March 2001, but before 23 March 2006. These cars, such as the petrol-auto Ford Galaxy pictured, will move from the current band F to new L or M bands next year, depending upon their emission levels. Their annual road tax bill jump from £210 to at least £415.
“As prices for older cars fall over time, the tax burden comes into greater focus, reducing demand and values,” said Rushmore.
Anyone with a Band E rated car (producing 166-185g/km) currently paying £170 could migrate to band J next year, when they will have to foot a bill of £260 for road tax. Vehicles that currently reside at the top of group F (above 201g/km but less than 225g/km) will see their bill increase from £210 per annum to £300.
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How the tax changes affect certain models
2002 Ford Galaxy 2.3 petrol auto (264g/km) worth £5,250.
Rises from £210 to £440 UP £230
2003 Ford Focus 1.8 petrol (181g/km) worth £4,250.
Rises from £170 to £260 UP £90
2005 Alfa Romeo 156 2.0 JTS saloon (205g/km) worth £6,995.
Rises from £210 to £300 UP £90
2005 Renaultsport Clio 182 (194g/km) worth £6,690
Rises from £210 to £260 UP £50
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