Vehicle Excise Duty (VED) rates will be increasing from 1st April 2020 for new cars. Find out why and what you can do to avoid paying more for your car.
Did you know that from the 1st April 2020 the Vehicle Exercise Duty (VED) or Road Fund Licence will be increasing following the budget? Currently the amount you pay is based on how much CO2 your vehicle emits, the more CO2 your car emits, the more you pay.
This is due to a new more accurate method of testing, called Worldwide Harmonised Light Vehicles Test Procedure (WLTP). The upcoming WLTP method is able to determine a more realistic evaluation of your vehicle's official fuel consumption (mpg), driving range and CO2 emissions (g/km). As a result, your vehicle's CO2 emission output will change, placing it in a higher tax band to its current rate, causing an increase in the cost of your road fund licence for the first year.
From 1st April 2020 the road tax bands stay the same however buying a new car from April will be more expensive that in March 2020. This will only affect the initial purchase price of the car. In the years following, that tax rates will be standardised for all cars (up to the value of £40,000) with petrol and diesel vehicles paying £145, hybrids £135 and fully electric cars paying £0.
Yes! By purchasing your new vehicle before the April 2020 road tax increases you could save money on your first years’ tax.
For example, a Mazda CX-5 2.2ltr 184 PS AWD GT Sport Auto Diesel, which will have one of the biggest VED increases in the Mazda range.
By purchasing this vehicle in March, you could save up to £750.
Mazda CX-5 2.2ltr 184 PS AWD GT Sport Auto Diesel
Current Taxing Band
H - £530
Tax Band from 1st April 2020
J - £1,280
Difference of Tax