Road tax - what's going to happen to resale values?
Discussion
As everyone on this forum is no doubt aware there are different road tax bands for cars built after 2001, with cars registered after 2006 which emit more than 225g/km of CO2 paying anything up to £460 of annual road tax.
http://www.direct.gov.uk/en/Motoring/OwningAVehicl...
I wonder if we'll end up with a situation where the resale values of cars which fall into the higher tax bracket get hammered.
I would cite my current ride (a 350Z) as a good example. I bought it a few years ago, and it was registered in June 2006. At the time I wasn't too bothered about the extra road tax, it wasn't a massive proportion of the overall purchase and running costs. Now with the price of these cars dropping sharply recently, I suspect the rate of road tax rate will be more of an issue to potential new buyers. Perhaps we could even see a situaion where cars registered in pre-March 2006 will sell for more than cars registered later.
I guess this is going to become more of an issue as time goes on, and prices fall further. I just can't see anyone happy to spend £2k on a car which will cost them almost £500 per year to tax.
Sorry for the slightly rambly post, but would interested to hear any views on this.
http://www.direct.gov.uk/en/Motoring/OwningAVehicl...
I wonder if we'll end up with a situation where the resale values of cars which fall into the higher tax bracket get hammered.
I would cite my current ride (a 350Z) as a good example. I bought it a few years ago, and it was registered in June 2006. At the time I wasn't too bothered about the extra road tax, it wasn't a massive proportion of the overall purchase and running costs. Now with the price of these cars dropping sharply recently, I suspect the rate of road tax rate will be more of an issue to potential new buyers. Perhaps we could even see a situaion where cars registered in pre-March 2006 will sell for more than cars registered later.
I guess this is going to become more of an issue as time goes on, and prices fall further. I just can't see anyone happy to spend £2k on a car which will cost them almost £500 per year to tax.
Sorry for the slightly rambly post, but would interested to hear any views on this.
It's a concern.
Next year I'm getting a new 4x4.
I was thinking about an older M Class or Land Cruiser.
Both are in the £450ish tax bracket.
Compared to the Q7, X5 and their £240ish.
Over 5 years of ownership this is a mere £1000 different.
It's easily absorbed into a sale price if the Merc or LC if I can do some haggling.
But, if the taxman decides to increase the £450 tax bracket on whale killing behemoths then the tax may go up to £500 or £600 or more.
The M class would have to be at least 2 grand cheaper than the alternatives to make up for the higher tax.
Snowboy said:
It's a concern.
Next year I'm getting a new 4x4.
I was thinking about an older M Class or Land Cruiser.
Both are in the £450ish tax bracket.
Compared to the Q7, X5 and their £240ish.
Over 5 years of ownership this is a mere £1000 different.
It's easily absorbed into a sale price if the Merc or LC if I can do some haggling.
But, if the taxman decides to increase the £450 tax bracket on whale killing behemoths then the tax may go up to £500 or £600 or more.
The M class would have to be at least 2 grand cheaper than the alternatives to make up for the higher tax.
Its worth being mindful that manufacturers tweak the cars to try and get them in the lower brackets. For example with the X5, the early E70 3.0d models (2007) were just over the 225 threashold and are £445/year. Then later in 2007 (I think) BMW made some changes and the same car is now £260 or so. Sometimes nothing else gets changed so there are no indicators to go by other than the manufacturing date. Next year I'm getting a new 4x4.
I was thinking about an older M Class or Land Cruiser.
Both are in the £450ish tax bracket.
Compared to the Q7, X5 and their £240ish.
Over 5 years of ownership this is a mere £1000 different.
It's easily absorbed into a sale price if the Merc or LC if I can do some haggling.
But, if the taxman decides to increase the £450 tax bracket on whale killing behemoths then the tax may go up to £500 or £600 or more.
The M class would have to be at least 2 grand cheaper than the alternatives to make up for the higher tax.
I fell into this trap with my wife's current X3 which was manufactured August 2007 and registered on a '57 plate. It's in the £445 bracket. I wasn't aware at the time, but if it had been manufactured 3 weeks later it would have been exactly the same car, with the same performance and registration plate, but with half the road tax.
As the OP predicts, I do think this will hammer resale value of certain cars, made between certain dates.
I just try each year to remember that, over a period of say 5 years' ownership, the extra £1k paid in tax is trivial compared to general depreciation and the potential cost of anything going wrong with the car.
We went out of our way to get an early 2006 car rather than a newer car due to the tax. Then the government proposed re-jigging all the tax bands and I wrote to my MP to complain (I'm slightly impressed that he actually mentioned my point in parliament).
Not sure what difference it'll make come when we sell it but its saved us about £600.
Not sure what difference it'll make come when we sell it but its saved us about £600.
theboss said:
Snowboy said:
It's a concern.
Next year I'm getting a new 4x4.
I was thinking about an older M Class or Land Cruiser.
Both are in the £450ish tax bracket.
Compared to the Q7, X5 and their £240ish.
Over 5 years of ownership this is a mere £1000 different.
It's easily absorbed into a sale price if the Merc or LC if I can do some haggling.
But, if the taxman decides to increase the £450 tax bracket on whale killing behemoths then the tax may go up to £500 or £600 or more.
The M class would have to be at least 2 grand cheaper than the alternatives to make up for the higher tax.
Its worth being mindful that manufacturers tweak the cars to try and get them in the lower brackets. For example with the X5, the early E70 3.0d models (2007) were just over the 225 threashold and are £445/year. Then later in 2007 (I think) BMW made some changes and the same car is now £260 or so. Sometimes nothing else gets changed so there are no indicators to go by other than the manufacturing date. Next year I'm getting a new 4x4.
I was thinking about an older M Class or Land Cruiser.
Both are in the £450ish tax bracket.
Compared to the Q7, X5 and their £240ish.
Over 5 years of ownership this is a mere £1000 different.
It's easily absorbed into a sale price if the Merc or LC if I can do some haggling.
But, if the taxman decides to increase the £450 tax bracket on whale killing behemoths then the tax may go up to £500 or £600 or more.
The M class would have to be at least 2 grand cheaper than the alternatives to make up for the higher tax.
I fell into this trap with my wife's current X3 which was manufactured August 2007 and registered on a '57 plate. It's in the £445 bracket. I wasn't aware at the time, but if it had been manufactured 3 weeks later it would have been exactly the same car, with the same performance and registration plate, but with half the road tax.
As the OP predicts, I do think this will hammer resale value of certain cars, made between certain dates.
I just try each year to remember that, over a period of say 5 years' ownership, the extra £1k paid in tax is trivial compared to general depreciation and the potential cost of anything going wrong with the car.
DaveH23 said:
Im looking at several different cars at the moment and 1 of my criteria is pre 2001 reg date.
This.For the performance figures in mind of my next car, a post 2001 car would be crippling on tax, a post 2006 car would not only be out of price range but astronomical to tax so I can see a lot of other opting for the pre 2001 cars to save a few £££ throughout the year.
Get a 60s Yank gas guzzler and you'll pay no tax. Maybe that's why they are so expensive 
I got shot of my then 3 year old D3 in 2008 due to stories of higher tax, increased parking costs and £25 a day congestion charge. I lost a packet and looking at today's classifieds I would have got a lot more for the car if sold now than I did back then.
Still riles me especially as the congestion never went up and the tax stayed in the £250+ range and the increased parking charges didn't happen, well not in this borough.
I got shot of my then 3 year old D3 in 2008 due to stories of higher tax, increased parking costs and £25 a day congestion charge. I lost a packet and looking at today's classifieds I would have got a lot more for the car if sold now than I did back then.
Still riles me especially as the congestion never went up and the tax stayed in the £250+ range and the increased parking charges didn't happen, well not in this borough.
The pre-occupation with 'road tax' baffles me to be honest. We're talking about an extra couple of hundred quid per year, which when taken as part of the ownership expenses of fairly powerful petrol cars, is a negligible amount. That's the cost of a decent-sized Michelin PS3 or a couple of tanks of fuel in a BMW M car. I don't understand the thought process of folk who buy a relatively expensive car (perhaps compounding their stupidity by trading-in) with the associated depreciation/servcing/maintenance costs and then worry about 'road tax'...
...which hasn't existed since the 1930s and is in fact actually called VED /pedant)
...which hasn't existed since the 1930s and is in fact actually called VED /pedant)
Rabbo said:
The pre-occupation with 'road tax' baffles me to be honest. We're talking about an extra couple of hundred quid per year, which when taken as part of the ownership expenses of fairly powerful petrol cars, is a negligible amount. That's the cost of a decent-sized Michelin PS3 or a couple of tanks of fuel in a BMW M car. I don't understand the thought process of folk who buy a relatively expensive car (perhaps compounding their stupidity by trading-in) with the associated depreciation/servcing/maintenance costs and then worry about 'road tax'...
...which hasn't existed since the 1930s and is in fact actually called VED /pedant)
Surely you're rather missing the OP's point? He's saying that with the cost of what were relatively expensive, powerful cars coming down to much lower levels now, tax is forming a progressively larger part of cost of ownership. Using his 350Z example, you could conceivably be paying less than 10k for a car that costs almost £450 a year to tax....which hasn't existed since the 1930s and is in fact actually called VED /pedant)
Rabbo said:
The pre-occupation with 'road tax' baffles me to be honest. We're talking about an extra couple of hundred quid per year, which when taken as part of the ownership expenses of fairly powerful petrol cars, is a negligible amount. That's the cost of a decent-sized Michelin PS3 or a couple of tanks of fuel in a BMW M car. I don't understand the thought process of folk who buy a relatively expensive car (perhaps compounding their stupidity by trading-in) with the associated depreciation/servcing/maintenance costs and then worry about 'road tax'...
thing is, for a 350z, rx8, or a v6 people carrier, or something similar, the car will soon only be worth 2k or so. At that point, £400\year starts to sting, especially if a car that is 3 months older costs half as much.I think it'll have the same impact as high insurance on some cars (ie s2000) does, it'll make those cars cheaper. Maybe at some point will lead to ringing (smash an old 350z? give its identity to a newer one)..
Rabbo said:
The pre-occupation with 'road tax' baffles me to be honest. We're talking about an extra couple of hundred quid per year, which when taken as part of the ownership expenses of fairly powerful petrol cars, is a negligible amount. That's the cost of a decent-sized Michelin PS3 or a couple of tanks of fuel in a BMW M car. I don't understand the thought process of folk who buy a relatively expensive car (perhaps compounding their stupidity by trading-in) with the associated depreciation/servcing/maintenance costs and then worry about 'road tax'...
...which hasn't existed since the 1930s and is in fact actually called VED /pedant)
Your attitude, and others like you, baffles me ...which hasn't existed since the 1930s and is in fact actually called VED /pedant)
It doesn't matter what you compare the cost to, the whole concept is just robbery, nothing less. At least Dick Turpin wore a f
king mask!It was a concern to me. When I sold my S60 it had about three weeks of tax left (I even got the renewal form in the post), and that was a hefty wad of cash for that car. I remember thinking that it would be a hard sell to a person who wasn't committed to wanting a lovely petrol S60. Anyone else looking for a comfortable, cheap saloon car would have probably decided to look for a cheap, smokey diesel instead. Luckily, it wasn't a problem to sell and it was a joy to drive too.
iphonedyou said:
Rabbo said:
The pre-occupation with 'road tax' baffles me to be honest. We're talking about an extra couple of hundred quid per year, which when taken as part of the ownership expenses of fairly powerful petrol cars, is a negligible amount. That's the cost of a decent-sized Michelin PS3 or a couple of tanks of fuel in a BMW M car. I don't understand the thought process of folk who buy a relatively expensive car (perhaps compounding their stupidity by trading-in) with the associated depreciation/servcing/maintenance costs and then worry about 'road tax'...
...which hasn't existed since the 1930s and is in fact actually called VED /pedant)
Surely you're rather missing the OP's point? He's saying that with the cost of what were relatively expensive, powerful cars coming down to much lower levels now, tax is forming a progressively larger part of cost of ownership. Using his 350Z example, you could conceivably be paying less than 10k for a car that costs almost £450 a year to tax....which hasn't existed since the 1930s and is in fact actually called VED /pedant)
As a motor trader who specialises in cars £1000 -> £4000 its one of the most common questions i get asked - how much is the road tax for that?
Cars with £30 a year road tax sit no time at all - in fact people seem willing to pay a premium to buy one - which defeats the purpose a bit.
Longer term, yes, it will impact resale values. In fact i'd go so far as to say its impacting resale values now of cars as people are very tuned in to running costs of cars that are maybe still only a year or two old.
Cars with £30 a year road tax sit no time at all - in fact people seem willing to pay a premium to buy one - which defeats the purpose a bit.
Longer term, yes, it will impact resale values. In fact i'd go so far as to say its impacting resale values now of cars as people are very tuned in to running costs of cars that are maybe still only a year or two old.
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