Car tax changes: Some drivers to pay over £100 extra in VED rates from tomorrow

Martin Lewis gives money-saving advice on VED car tax

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The new changes will see brand new cars pay higher chargers in their first year while standard rates will also rise. Costs will also increase for older cars registered between 2001 and 2017 as the Government looks to encourage road users to more environmentally-friendly vehicles.

Cars registered after 1 April 2017

The headline cost rises are for brand new vehicles which were only registered within the past year.

Car dealer specialist at Sandicliffe has confirmed this warning the most notable changes will affect newer models.

They said: “Some low emissions vehicles will see no change in road tax this year.

“The greater amount of CO2 emitted by your vehicle will determine how much your Vehicle Excise Duty increases in 2021.”

Drivers who emit between 226 and 255g/km in emissions will see the highest increase with year one costs jumping by £110.

Motorists who emit over 255g/km will also be affected with costs rising from £2,175 in 2020 to £2,245 from tomorrow.

However, prices stay completely the same for models who emit less than 75 g/km meaning only higher polluting vehicles are affected.

Standard rates for those who have purchased their models since 2017 will also rise with fees increasing from £150 to £155.

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Cars registered between 2001 and 2017

Fees will not increase for models which emit fewer than 130g/km and are placed within tax bands A-C.

However, costs will rise in small increments for those with higher vehicle pollution levels.

The most polluting models emitting over 255g/km will see prices rise from £580 to £600 per year from tomorrow.

Costs will also rise from £565 to £585 for those emitting between 226 and 255 g/km in CO2 emissions.

How to avoid tax increases

To truly avoid the tax rates drivers should consider purchasing an electric car who are yet to be affected by VED rates.

However, electric models will see their first major tax rise in April when benefit in kind rates for company car owners rise from zero to one percent.

Experts at Evans Halshaw have urged prospective buyers to not be “put off” by the added car tax increase.

However, those who may be concerned about the new charges are urged to look at pre-owned models where tax rates will be lower.

Evans Halshaw 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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