Car tax comparison... How much will you have to pay?

It's all about to be shaken up in the world of towcar tax. The current Vehicle Excise Duty structure based on carbon dioxide emissions bands was first introduced in 2001. Then, the average CO2 emissions figure was 178g/km.

Since then, to comply with EU targets, average emissions values have fallen to 125g/km, meaning that an increasingly large number of new cars have dropped into the lower tax brackets.

This trend is set to continue with manufacturers looking to meet the new targets of 90g/km set for 2020. To create further sustainability in vehicle taxation, the government announced the new VED scheme in its 2015 Summer Budget.

No motorist will pay more for a vehicle they currently own. The government has stated that, across all motorists in the UK, average annual tax is £166, meaning savings long term when the annual standard rate is set at £140. However…
 

Price comparison

Green scheme dream

A Mitsubishi Outlander (2012-), in its most environmental hybrid PHEV guise, emits just 42g/km and will cost you absolutely nothing when it comes to road tax if bought before the change.

Come 2017, new owners will have to pay £10 tax for the first year and then the standard £140 for each year following.

Tax over first five years: £0 (now), £570 (if bought new after 1 April, 2017).
 

Middle-ground motor

SEAT’s Leon ST (2014-) sits in band E at its current highest emissions measurement. At 138g/km, current owners pay £130 in the first year, and then continue to pay £130 as a standard rate of tax each year following.

In 2017, new owners will pay £200 up front and the standard rate of £140 for each year following.

Tax over first five years: £650 (now), £760 (if bought new after 1 April, 2017).

-- Become a better driver by taking a B+E test --
 

Top-end towcar

A Volvo XC90 (2015-), in its highest emissions form, is in band J, pumping out 186g/km and costing you up to £490 in the first year and £265 standard rate per year in VED.

When the new VED regulations come into effect, purchasers of a post-2017 Volvo XC90 will pay £800 in the first year and £140 standard rate for each year following. Additional to this, due to the high purchase price rules explained below, new owners will also have to pay £310 in the first five years of ownership.

Tax over first five years: £1550 (now), £2910 (if bought new after 1 April, 2017).
 

Wait, there’s more…

Whether the new regulations prove more cost efficient to you or more of a financial burden depends greatly on number of variables, the obvious ones being the cost of the car itself and its fuel efficiency when tallied up with the taxes overall. The initial introduction of the new rates is likely to be a sting to new owners to start with, though.

Any car under £40,000 with zero emissions will pay no tax whatsoever. But any car that costs over £40,000 to purchase will face a £310 supplement for five years to ensure that those who can afford to the most expensive cars make a fair contribution. Bad news for many Land Rover fans.

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