Beat the UK Road Tax Increase: Buy Your Car Before 1st April 2025

From 1st April 2025, changes to the UK's Vehicle Excise Duty (VED), commonly known as road tax, will come into effect. For the first time, new electric vehicles (EVs) will no longer be exempt and will have to pay road tax, alongside an increase in rates for petrol and diesel cars. If you're considering purchasing a new vehicle, now is the time to act to avoid paying higher road tax costs.

First Year Road Tax

If you’ve purchased a brand-new car in recent years, you may be aware of the higher rate of road tax that applies in the first year, the cost of which is typically included in the vehicle’s purchase price. For those unfamiliar with this policy, all newly registered cars are subject to an increased rate of tax (known as Vehicle Excise Duty or ‘VED’) during their first year of ownership. The amount payable is based on the car’s CO2 emissions and is periodically adjusted in line with inflation.

However, in the Autumn Budget 2024, the Labour government announced increases to first-year road tax for new car buyers. In addition to these higher charges, they also revealed that, for the first time, electric vehicle owners will be required to pay road tax.

What’s Changing?

Right now, EVs are completely exempt from road tax, making them a great money-saving option. But from April 2025, major changes will take effect:

• New zero-emission vehicles registered from 1 April 2025 will no longer be exempt from road tax. These cars will have a reduced first-year rate of £10 until the 2029-30 tax year. After that, owners will need to pay the standard annual rate of £195.
• Zero-emission cars registered between 1 April 2017 and 31 March 2025 will also begin paying road tax from April 2025, with an annual charge of £195.
• Zero and low-emission vehicles registered between 1 March 2001 and 30 March 2017 (previously in Band A) will now move to Band B, meaning an annual charge of £20.
• First-year VED increases across all emission bands:
  - Vehicles emitting 1–50g/km CO2 (including hybrids) will see an increase to £110.
  - Those emitting 51–75g/km CO2 (including hybrids) will rise to £130.
  - Vehicles emitting 76g/km CO2 and above will see their first-year rates double.
• Standard VED adjustments: From 1 April 2025, the government will adjust standard VED rates for cars, vans, and motorcycles (excluding first-year rates) in line with RPI inflation.
• Expensive Car Supplement: Zero-emission cars with a list price over £40,000 will now be subject to an additional charge of £410 per year for five years, starting from the second year. Previously, these vehicles were exempt.
• Zero-emission vans will also lose their exemption and will be taxed at the same rate as petrol and diesel light goods vehicles, which is currently £335 per year for most models.

Now Is The Best Time To Buy A New Car

To avoid the upcoming road tax increase, we’d encourage you to purchase and register your new vehicle before 31st March 2025 if you have been thinking about getting a new car in the near future. By doing so, you’ll secure:

• Exemption from road tax for EVs (as long as they are registered before the deadline).
• The current, lower road tax rates for petrol and diesel cars.
• Take advantage on current dealer and manufacturer offers before prices are adjusted in line with tax changes.
• Long-term savings on annual vehicle costs.

Don’t Wait – Act Now!

At Dicksons of Inverness, we offer a fantastic range of new and used vehicles, including petrol, diesel, and electric models. Our expert team can help you find the perfect vehicle before the tax changes come into effect. By purchasing with us before April 2025, you’ll be making a sound financial decision and securing a better deal for the future.

Visit us or contact our team today to find out more and secure your next car before the road tax changes hit. Avoid the extra costs – browse our range, book a test drive, and register your vehicle before 1st April 2025!