Man figuring out car tax amount with calculator

In an age that seems to be characterised by near-constant price rises, another one is probably nobody’s ideal news – but like it or not, as of this month, Vehicle Excise Duty (or car tax) will increase. In case you’re wondering, it was one of many announcements that might have slipped under a lot of radars in Jeremy Hunt’s Spring Budget statement. 

The effect of the latest Retail Price Index hike has basically caused VED to rise for almost every driver, apart from people buying fully electric cars, and plug-in hybrids that emit less than 50g of CO2 per kilometre. 

Now, while there’s no question that it’s likely quite irritating to have to contend with yet another price rise, it’s very unlikely to be crippling. So, here’s a bit more about what it entails. 

How much is vehicle tax rising by?

Road tax, car tax, Vehicle Excise Duty… whatever you want to call it, it’s rising for most new and used cars. Now, the increase for most people is expected to range between £5 to £10. It varies depending on a couple of factors though, and people who’ve bought new cars with relatively high emissions may well face a more significant tax rise of £140 in the first year.

So, let’s unpack that a little bit.  

When you buy a new car, you’ll then have to deal with a first-year tax rate, which is known as a “showroom tax rate”, based on the CO2 emissions of the vehicle. After that, you’d then have to pay a fixed-price standard tax rate, again based on the car’s CO2 emissions.

If you’re buying a relatively new petrol or diesel car with carbon emissions up to 150g per kilometre, you can largely expect to pay between £5 and £35 more than you may have done before the 1st of April.

If you’re buying a new car with CO2 emissions of above 150g per kilometre, that’ll put you on the hook for anything between an extra £35 to an extra £140, after you’ve paid that initial showroom tax for the first year.  

So what are the alternatives?

Now, some older cars can be cheaper to tax than newer ones. For petrol and diesel cars registered after 2017, there’s a flat rate of £190 per year to pay after the first year. 

For petrol and diesel cars registered before 2017 on the other hand, they’ll continue to be classified by lettered VED bands, based on CO2 emission outputs. That means if the car in question has CO2 emissions over 121g of CO2 per kilometre, then it’ll be impacted by price rises – probably by between £10 and £40. 

As is so often the case with these things then, ultimately it means that buying a new car comes down to a cost/benefit judgement call. Happily, we’ve got plenty of options to help save you money here at RAW2K. You can take your pick from used and salvage cars from an extensive range of brands in our online car auctions, including Volkswagen, Ford, Renault, and many more. Why not take a look around, and see what you can find?