A car tax trap created by the latest budget will hit the existing drivers of typical family cars from next year, but will fail to address the real issue of older and bigger polluters on todays roads, according to CAP, the supplier of used car value and technical data.
Hardest hit, says CAP, will be drivers of the automatic variants of larger-engine cars up to seven years old who will be hit by increases in Vehicle Excise Duty and more rapid depreciation which could severely affect values.
CAP believes that next years proposed increases in Vehicle Excise Duty will have a disproportionate impact on ordinary used car drivers, while doing nothing to encourage the drivers of older dirtier vehicles to switch into newer more efficient cars.
To illustrate this CAP points to the example of a Volkswagen Passat 2.0 automatic registered since March 1 2001 (Y registration). From next year the owner of this car will face a VED cost of £415 - almost double the current £210. In contrast, the same model registered before that date will only attract an increase in VED based on the standard rate of inflation.
Mark Norman of CAP argues that the new rules unfairly penalise many thousands of drivers by trapping them into paying big tax rises without offering the opportunity to make informed choices about which car to choose. He contrasts it with last years introduction of a Band G VED charge for higher emission vehicles, which applied only to new cars purchased after the announcement - giving drivers the opportunity to research which vehicles would attract the highest VED charge, thereby giving them the opportunity to choose a vehicle attracting lower car tax.
Norman adds, Many of these cars will be worth around £2,000 to £2,500 in the trade and the cost of a tax disc will be around 15-20% of the cars entire value. That will inevitably reduce their value substantially.
We understand and support the principle of pegging fiscal measures to environmental impact, but this measure is inconsistent because it leaves truly inefficient vehicles to escape all but an inflationary rise in VED. Nor do the new measures take any account of the actual pollution caused by the vehicle, because low mileage users will be penalised at exactly the same rate as the high mileage driver.
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