Car buyers are being warned that they only have six weeks left to beat huge car tax rises. The increases will affect drivers of some of the most affordable, efficient cars on Britain’s roads.
New car tax rules, which are explained in detail in this blog post, will see the cost of taxing a new, fuel efficient motor, such as a Ford Fiesta or Fiat 500, shoot up. It will rise from nothing to £400 in the first three years. Anyone keeping the car for 10 years will now spend £1380.
Under outgoing rules, cars emitting 100g/km or less of CO2, like the Fiesta and 500, would have been exempt from car tax. This incentive was put in place in 2013, as the government encouraged drivers to buy cars with lower harmful emissions.
The scheme has proved so successful that nearly 75 per cent of new cars sold now emit less than 100g/km of CO2.
However, the government has Vehicle Excise Duty (VED), levels start to decline. In an attempt to balance the books, new car tax regulations will begin from 1 April, 2017. It will be applied to every new car sold. It means drivers who are considering buying a new car and wish to avoid the high increases only have six weeks to beat the tax hike.
Car sales surge fuelled by April road tax rise
Many drivers have already made their move. According to the Society of Motor Manufacturers and Traders (SMMT), sales of new cars in January were at a 12-year high.
In what would typically be a quiet month, sales grew by 2.9 per cent, to 174,564 new cars. This was driven by private buyers, with a 5 per cent rise to 76,729 cars.
By contrast, the fleet sector saw an increase of just 1.4 per cent. Business sales fell by 1 per cent.
Andy Bruce, CEO of dealer group Lookers, says buyers aren’t taking any chances. They are buying pre-registered or nearly-new cars that are on the forecourt, rather than ordering a new model from the manufacturer’s factory.
“We believe there will be an element of pull forward in the March market,” said Bruce. “Customers appear to be going for cars that are available immediately as opposed to ordering in advance.”
His views are echoed by John Tordoff, CEO of JCT600, another dealer group. He said: “We’ve definitely seen evidence of buyers looking to secure a new car for delivery before the changes come into force.”
However, Tordoff warns that there is a feeling that the majority of drivers are still unaware of the pending changes to the road tax system.
Beat the road tax increase by buying a pre-registered car
So how can anyone wanting a new, efficient car beat the road tax increases in April go about it? After all, no car maker can build, ship and register a new car in time to meet the deadline.
The answer is to buy a pre-registered car. These are cars that dealers have effectively bought themselves from car makers.
Most pre-registered cars will be just like a brand new model. They’ll have the very latest mechanical and technical features, delivery mileage and that showroom-new feel and smell.
However, they will be wearing the ‘66’ registration prefix, which runs from September 2016 to the end of this month. And you’ll be counted as the second owner on the vehicle registration document.
But they will be eligible under the outgoing road tax regulations, so the savings could be significant. See here for details of just how significant those savings could be.
James is a motoring journalist and former magazine editor at BBC Top Gear and Auto Express. He has scooped, reported on and reviewed most new cars of the past 20 years, and currently contributes to the Driving section of The Sunday Times.