Consumers buying new cars are being advised to check whether they can save cash by bringing forward or delaying their purchases.
Changes to vehicle excise duty (VED) come into force on 1 April 2017, with many people being forced to pay more once the new rules take effect.
From April, only cars which emit zero CO2 emissions – such as electric or hydrogen cars - will be exempt from the tax. At present many hybrid and low-polluting cars are also exempt but that will no longer be the case.
Any petrol or diesel car will pay a flat tax rate of £140 from the first anniversary of the purchase, regardless of how much CO2 it emits. In the first year the tax will be tapered based on exactly how much pollution comes from the car.
Figures calculated by the AA show that a motorist buying a Toyota Prius hybrid with emissions of 70 grams per kilometre will pay £725 in tax over the first six years. Today the same car would not be liable for any tax.
Yet people buying so-called “gas guzzlers”, such as the Long Wheel Base Mitsubishi Shogun 4X4 - which emits 245 grams per kilometre - will see their tax bill slashed. Over six years this car will be liable for £1,700 tax under the new rules - £985 less than today.
‘The imposed changes are counter-intuitive’
Edmund King, AA president, says: “It seems perverse that a buyer of a high emission vehicle could actually see an overall reduction in their tax bill when compared to a cleaner car.
“Both the government and our members say that improving air quality is of vital importance, but the imposed changes to car tax are counter-intuitive to the challenge.”
The AA says 51% of drivers are unaware these changes are even happening. It is calling on the government to withdraw the tax changes in March’s Budget and to better promote the take-up of cleaner cars.
In the meantime, motorists are being urged to check any car potential purchases against the tables published by the government to see if they can make a saving by bringing forward or delaying their purchase.
Mr King adds: “Moving the delivery date, either forwards or backwards, depending on the car, could save you hundreds of pounds.”