Buyers looking to slash road tax costs by downsizing should do their research before completing a deal - or face paying over the odds for their tax discs in future.
Our latest research has uncovered that some buyers could be looking at a £100 INCREASE in road tax due to re-banding next year.
New road tax bands – due to come into force in March 2009 – will make the road tax system more confusing and penalise a number of small cars – including family favourites such as the Volkswagen Polo, Ford Ka, Skoda Fabia, SEAT Ibiza, Ford Focus and Vauxhall Astra.
Cars that fall between 180 g/km CO2 and 185 g/km are currently at the top of Band E – but under next year’s banding, these cars will jump to Band J. That means a leap from £170.00 to £260.00, with a further rise in 2010 - a shock to current owners and anyone who buying one in the next year.
Buyers need to be especially careful of the 1.4-litre petrol engine fitted to Fabia, Ibiza and Polo models. Many buyers will think they’re doing the ‘green thing’ by opting for a Polo and hoping to reap the financial reward. It’s a small car sold on how green it is – the 1.4-litre HDI Bluemotion emits under 100 g/km of CO2 and is exempt from road tax. However, choose a 1.4-litre petrol automatic and next year you could face a whopping £260.00 road tax charge; while manual versions will be charged from £120.00-£150.00, causing chaos for the car buyer.
To make matters even more confusing, Parker’s has found a widespread practice in which car makers tweak the CO2 outputs of cars that are on the edges of the band boundaries. This is so they drop a band and become cheaper to run.
One example is the Citroen C4 fitted with the 1.6-litre HDI diesel - but there are countless others. When it was launched in 2004, the C4 1.6 HDI diesel was a 125 g/km car; from January 2008 it’s 120 g/km – just squeezing into Band B and going from £120 a year to just £35. That’s great news for new buyers – who will pay far less tax – but a maze for the used buyer to navigate at a time when the road tax system is more confusing than ever
Car tax is set to go through the roof for many car owners new legislation means that there will be more tax bands and over £100 per year increase for many drivers. The number of tax bands goes from Seven to Thirteen and the many midrange cars will fall into the higher category. These tax increases could make many family cars worthless. People buying second hand cars will be paying much more attention to emissions and those that fall in the higher tax bands may well become un sellable. Cars that fall in the lowest tax band (less than 100/Kg will be tax exempt. Unfortunately this is not the case for motorcycles. Motorcycles produce less than 100/km Co2 but will still be liable to road tax of about £33.00, This is almost criminal why should one section of the community be penalised for producing Co2 and another be penalised for not doing so. The good news is the economic small bikes will still cost far less to buy and run than their four wheeled counterparts
