New VED and £515 rate cars
Discussion
Just wondering how much people think this will impact some cars.
I remember it was the almost instant death knell for some high'ish capacity petrol powered white goods cars when it first came in, and now as cars get older will start impacting 2006 on petrol V70, Mazda CX7, XC90 auto D5 etc but people simply took on the chin the higher price on more sporty/executive stuff as it was the new norm.
With the future of 5 year old cars being £140 per annum will even these sporty cars now suffer and we'll see a real lack of interest in keeping 5-15 year old cars on the road. I know it's a small part of the cost of keeping a car but it will be almost x4 the cost and as cars get older the demographic for these cars ownership 'tends' to be the more thrifty types.
It won't effect much the decisions of those who buy brand new, but it'll be interesting to see if certain makes and models are generally disowned! If they, a long way down the line, become desirable because of their rarity or even if (sit down for this one) the government reduce the rates a bit sometime in the future.
I remember it was the almost instant death knell for some high'ish capacity petrol powered white goods cars when it first came in, and now as cars get older will start impacting 2006 on petrol V70, Mazda CX7, XC90 auto D5 etc but people simply took on the chin the higher price on more sporty/executive stuff as it was the new norm.
With the future of 5 year old cars being £140 per annum will even these sporty cars now suffer and we'll see a real lack of interest in keeping 5-15 year old cars on the road. I know it's a small part of the cost of keeping a car but it will be almost x4 the cost and as cars get older the demographic for these cars ownership 'tends' to be the more thrifty types.
It won't effect much the decisions of those who buy brand new, but it'll be interesting to see if certain makes and models are generally disowned! If they, a long way down the line, become desirable because of their rarity or even if (sit down for this one) the government reduce the rates a bit sometime in the future.
Correct me if I am wrong but the new changes will only affecr cars registered after 1st April 17.
This means any cars currently in the £515 band will remain in this band. This means less people want them so prices come down - Result.
Any car registered after 1st April will pay a higher rate in year 1 then will be £140 a year after which means used cars after year 1 have a more reasonable VED rating for the used market - Result.
Happy to be corrected.
A quick google would suggest I am right.
This means any cars currently in the £515 band will remain in this band. This means less people want them so prices come down - Result.
Any car registered after 1st April will pay a higher rate in year 1 then will be £140 a year after which means used cars after year 1 have a more reasonable VED rating for the used market - Result.
Happy to be corrected.
A quick google would suggest I am right.
Edited by DaveH23 on Wednesday 18th January 19:46
Not quite as I understand it. VED will be based on the value of the car and the emissions.
After 3 yr old, <40k new price (and the price includes options), will be £140. (So a cheap high pollution car will be cheaper
)
> 40k £450 a year.
> 40K with no emisions £310 a year.
< 40k with no emission £0
Tax rates will change on cars that are less than 3 yrs old, and generally be in line with emissions (as above)
https://www.carwow.co.uk/news/ved-road-tax-from-20...
After 3 yr old, <40k new price (and the price includes options), will be £140. (So a cheap high pollution car will be cheaper
)> 40k £450 a year.
> 40K with no emisions £310 a year.
< 40k with no emission £0
Tax rates will change on cars that are less than 3 yrs old, and generally be in line with emissions (as above)
https://www.carwow.co.uk/news/ved-road-tax-from-20...
A lot of people here in need of reading comprehension.
The OP is specifically asking whether high CO2 cars from 2006 onward will find less favour against their newer (lower tax) counterparts, than they would have done had this change not been made.
Because of this change, cars of that era will not just have (the usual) age and wear counting against them, they will also be uniquely expensive to tax which may (likely in my view) hit their values hard. That would have obvious knock-on effects for the numbers of said cars on the road in a few years, and the condition of those that remain.
The OP is specifically asking whether high CO2 cars from 2006 onward will find less favour against their newer (lower tax) counterparts, than they would have done had this change not been made.
Because of this change, cars of that era will not just have (the usual) age and wear counting against them, they will also be uniquely expensive to tax which may (likely in my view) hit their values hard. That would have obvious knock-on effects for the numbers of said cars on the road in a few years, and the condition of those that remain.
The tax will mean there will be a lot less high polluting cars on the road as there will be less sold. The tax is focusing at the source of these cars. Over the years there will be fewer used cars in certain classes and engines so prices will probably hold higher. This will reduce downward pressure on all used cars at the upper end of the VED bracket.
Mr Oblong said:
A lot of people here in need of reading comprehension.
The OP is specifically asking whether high CO2 cars from 2006 onward will find less favour against their newer (lower tax) counterparts, than they would have done had this change not been made.
Because of this change, cars of that era will not just have (the usual) age and wear counting against them, they will also be uniquely expensive to tax which may (likely in my view) hit their values hard. That would have obvious knock-on effects for the numbers of said cars on the road in a few years, and the condition of those that remain.
Co2 'aint gonna be the driving tax factor. Everything less than 40k new will be £140, (almost) irrelevant of the Co2 emissions. The OP is specifically asking whether high CO2 cars from 2006 onward will find less favour against their newer (lower tax) counterparts, than they would have done had this change not been made.
Because of this change, cars of that era will not just have (the usual) age and wear counting against them, they will also be uniquely expensive to tax which may (likely in my view) hit their values hard. That would have obvious knock-on effects for the numbers of said cars on the road in a few years, and the condition of those that remain.
bearman68 said:
Co2 'aint gonna be the driving tax factor. Everything less than 40k new will be £140, (almost) irrelevant of the Co2 emissions.
I am well aware, but you are still not comprehending what the OP was discussing.The original poster was talking about whether the 2017-onward tax regime will affect how 2006-16 cars are treated by the used market and therefore by owners.
Example- a 2016 370z would normally be worth slightly less than a 2017 due to age, but now it will also have accelerated depreciation (after a few years, when it's £515 vs £140) on the basis of being much more expensive to tax than the barely-newer model.
Reading comprehension is key.
Edited by Mr Oblong on Wednesday 18th January 21:52
Firstly, reading comprehension, this will start to kick in April 2023.
"After the first 12 months, you’ll pay a rate based on the fuel the vehicle uses and an additional rate of £310 a year for the next 5 years."
That means this affects cars that are SIX years old, not five. Five + 12 months = six.
New regime is effectively a one-off year surcharge of ~£1500 for fuel-guzzling engines, then a tax of £450/year for the next 5 years for anything costing £40k+, then £140/year, and £140/year flat for anything else.
At the moment you have for instance:
LS430 £295 (they are pretty much all pre-23 March 2006)
LS460 £515 (2007 on)
This is a £220 surcharge to drive the LS460. I don't think it's such a big deal, as it's not, as some people portrary, £500 vs 0, but rather £500 vs £300, which isn't such a big difference, but there will be some cars where a 2006 and a 2007 are otherwise identical, and yet the 2006 should be worth as much or a little more than the 2007, other things being equal, due to the lower car tax.
You will get two new disparities.
A Jeep Wrangler costs under £40k, but it is band L or M (£500/£515), so a car registered March 2017 will cost £500/£515/year in perpetuity, yet a year old April 2017 car will cost just £140.
Meanwhile this Hyundai Genesis:
http://www.autotrader.co.uk/classified/advert/2017...
will cost £515/year, and a post March 2017 car will cost £450/year till April 2023 (list price is £50k+), when it will fall to £140
So for 2018-2022, a 2016 and 2017 car will cost roughly the same to tax (£515 vs £450), but after that the cost will fall dramatically.
This 2006 LPGed Sonata, as an example, http://www.autotrader.co.uk/classified/advert/2017...
pays £500/year for ever, but in 2023, you might have a choice between a £2k 2016 Genesis costing £515/year, and a £3k 2017 Genesis costing only £140/year.
Come 2023, I would expect the (actually rather small - BMW and Mercedes don't sell that many Band L/M cars any more) £500 VED barges to fall dramatically in value.
Ironically, if you did want a new Genesis, and assuming you won't keep it till you die, you are better off buying one now, pre April, as the costs stack up thus:
Y1 £1120
Y2-6 £515
= £4210
whereas post-April:
Y1 £2000
Y2-Y6 £450
= £4250
It's Y6 buyers who get the benefit....
"After the first 12 months, you’ll pay a rate based on the fuel the vehicle uses and an additional rate of £310 a year for the next 5 years."
That means this affects cars that are SIX years old, not five. Five + 12 months = six.
New regime is effectively a one-off year surcharge of ~£1500 for fuel-guzzling engines, then a tax of £450/year for the next 5 years for anything costing £40k+, then £140/year, and £140/year flat for anything else.
At the moment you have for instance:
LS430 £295 (they are pretty much all pre-23 March 2006)
LS460 £515 (2007 on)
This is a £220 surcharge to drive the LS460. I don't think it's such a big deal, as it's not, as some people portrary, £500 vs 0, but rather £500 vs £300, which isn't such a big difference, but there will be some cars where a 2006 and a 2007 are otherwise identical, and yet the 2006 should be worth as much or a little more than the 2007, other things being equal, due to the lower car tax.
You will get two new disparities.
A Jeep Wrangler costs under £40k, but it is band L or M (£500/£515), so a car registered March 2017 will cost £500/£515/year in perpetuity, yet a year old April 2017 car will cost just £140.
Meanwhile this Hyundai Genesis:
http://www.autotrader.co.uk/classified/advert/2017...
will cost £515/year, and a post March 2017 car will cost £450/year till April 2023 (list price is £50k+), when it will fall to £140
So for 2018-2022, a 2016 and 2017 car will cost roughly the same to tax (£515 vs £450), but after that the cost will fall dramatically.
This 2006 LPGed Sonata, as an example, http://www.autotrader.co.uk/classified/advert/2017...
pays £500/year for ever, but in 2023, you might have a choice between a £2k 2016 Genesis costing £515/year, and a £3k 2017 Genesis costing only £140/year.
Come 2023, I would expect the (actually rather small - BMW and Mercedes don't sell that many Band L/M cars any more) £500 VED barges to fall dramatically in value.
Ironically, if you did want a new Genesis, and assuming you won't keep it till you die, you are better off buying one now, pre April, as the costs stack up thus:
Y1 £1120
Y2-6 £515
= £4210
whereas post-April:
Y1 £2000
Y2-Y6 £450
= £4250
It's Y6 buyers who get the benefit....
delta0 said:
The tax will mean there will be a lot less high polluting cars on the road as there will be less sold. The tax is focusing at the source of these cars. Over the years there will be fewer used cars in certain classes and engines so prices will probably hold higher. This will reduce downward pressure on all used cars at the upper end of the VED bracket.
There aren't that many on sale to start with any more. And it is not clear that the Y1 tax is that significant.76-90 £100
91-100 £120
101-110 £140
111-130 £160
131-150 £200
So anything up to 150g CO2 has negligible Y1 VED
Then there are:
151-165 now £185 will be £500 (+£315)
166-170 now £300 will be £500 (+£200)
171-175 now £300 will be £800 (+£500)
176-185 now £355 will be £800 (+£445)
186-190 now £500 will be £800 (+£300)
191-200 now £500 will be £1200 (+£700)
201-225 now £650 will be £1200 (+£550)
226-255 now £885 will be £1700 (+£815)
255+ now £1120 will be £2000 (+£880)
So the tax is up by £200-£880, depending on current CO2. The worst is the 226+ range, but honestly there aren't that many cars that would be affected. Ferraris, McLarens, the very top of the S-Class/A8/7series, and some random American cars that aren't really going to sell much anywya.
Max5476 said:
there is clearly only one answer to the new VED rules, from April next year, go and buy a brand new mustang, and make sure it is specced under £40,000.
Under the changes the first year tax on something like a Mustang is set to increase from what is currently around £1k up to £2k. This is built in to the new car list price so get ready for increases. Which in turn will take the car ever nearer to the £40k bracket. It will be easy to spec a V8 Mustang to over £40k once the extra first year tax increases are added. I've never considered VED cost and can't understand why people buying as enthusiasts do. If you're spending hundreds or thousands running a sports car each year what's a couple of hundred quid?
Even new cars which odd people proudly proclaim they paid cash for and then explain they made their choice based on saving £30 a year.
Just bizarre.
Even new cars which odd people proudly proclaim they paid cash for and then explain they made their choice based on saving £30 a year.
Just bizarre.
HotJambalaya said:
I think it will lead to a rise of lots of 'dealer fit' options.... buy the car for £39k with 6k of dealer fit options, which are already 95% installed
Not sure how you can dealer fit heated steering wheels, leather trim, metallic paint, and what not. And if they make it too simple, people would just go for the £39k car and then fit the options themselves aftermarket for a fraction of the price.Mr Oblong said:
I am well aware, but you are still not comprehending what the OP was discussing.
The original poster was talking about whether the 2017-onward tax regime will affect how 2006-16 cars are treated by the used market and therefore by owners.
Example- a 2016 370z would normally be worth slightly less than a 2017 due to age, but now it will also have accelerated depreciation (after a few years, when it's £515 vs £140) on the basis of being much more expensive to tax than the barely-newer model.
Reading comprehension is key.
ta I thought for a minute I'd not been so clear, a 370Z is a good example of what I am alluding to, the higher tax ones will be older AND more expensive to tax and whilst I get the point of another poster about second car running costs and what does a bit more tax matter in the big scheme of things, but if you are considering a 370Z as a classic car keeper one day then over the years (to a hypothetical 40 year tax exemption)you are talking thousands of pounds of extra tax when you could choose a newer car and put that money to the maintenance budget (every little helps when you are trying to run an older sporty second car). The original poster was talking about whether the 2017-onward tax regime will affect how 2006-16 cars are treated by the used market and therefore by owners.
Example- a 2016 370z would normally be worth slightly less than a 2017 due to age, but now it will also have accelerated depreciation (after a few years, when it's £515 vs £140) on the basis of being much more expensive to tax than the barely-newer model.
Reading comprehension is key.
Edited by Mr Oblong on Wednesday 18th January 21:52
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