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Road Tax set to double - What you need to know

As of 1 April 2017, car road tax (or Vehicle Excise Duty to give it it’s correct name) – is set to rise significantly. If you’re looking to buy or lease a new vehicle in 2017, the chances are it will be better to do it before the end of March.

Depending on emissions, currently relatively efficient cars pay very little or even no tax in the first year and thereafter. However, as of April, apart from 100% electric cars, all cars will pay a minimum of £140 from the second year. If the list price of the car is over £40k, they will be charged an extra £310! Per year!

Vehicles registered before the 1st of April face no changes whatsoever. The reason for these changes is that the government is making less money as vehicles have got much more efficient and therefore paying little or no tax!

The Changes

There are 13 bands based on CO2 emissions. The higher the band, the higher the first year charge, up to £2000 for a car with emissions over 255. Probably not a car your accountant would recommend!

As an example, A Mercedes-Benz C220D AMG-Line Saloon (which we have some great deals on!) currently pays zero road tax in the first year and only £30 thereafter. As of April, the owner will be charged £160 in the first year and £140 from the second year.


The higher the band, the higher the first year charge, up to £2000 for a car with emissions over 255. Probably not a car your accountant would recommend.

Even if you are leasing, the road tax cost will be passed onto you and affect the monthly costs.

Please have a look at the table below showing the changes courtesy of the DVLA.

How does this effect Leasing?

One of the benefits of leasing a vehicle is that usually, road tax is included in the monthly rental so it's one less thing you need to worry about.

With the 2017 changes outlined above, the additional cost of Road Tax will simply be reflected in your monthly rental. For example, an additional £300 in Road Tax translates to circa £8 per month on a standard 6+35 contract profile.

Of course this only applies to vehicles registered after April 1st 2017. With this in mind it would be wise to order a stock special registered before 1st April and beat the tax man. For more information give us a call

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Posted on 19th January 2017 at 10:21 AM

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