VED Rate Changes, 1 April 2017

What it means for new car buyers

As of the 1st April 2017, the Vehicle Exercise Duty CO2 bands are changing for all new cars. In short, low emission cars that would previously have been VED exempt will now have a fee for the first 5 years of ownership. The first year fees are either less or more than the subsequent years depending on the band (see table).

The first year fees can be hefty if you buy a less economical car - anything up to a staggering £2,000 (for cars over 255 g/CO2/km). So, this is serious stuff for new car buyers. The only new cars exempt from VED under the new scheme are 0 emissions cars (totally electric).

The first year rate (£10-£2000), is followed by a yearly fee for the subsequent four years. This is a £140 flat fee, except for cars costing over £40,000, where an additional £310 is added for subsequent years, bringing the total to £450. It's also worth noting that the additional £310 fee (after year 1) applies to all cars over £40,000, irrespective of economy. Cheaper cars with optional extras that tip the price over the £40,000 threshold will be placed on the premium rate.

When the wait time on factory ordering a new vehicle is considered, there are only a couple of months left to order before you can no longer get the current rate. The good news is the VED tax only applies when buying brand new cars, so used car purchases won't carry it.

The numbers table

Here is the official table released by the government:

New VED system - for cars registered from April 2017			Current VED system - for cars registered until April 2017
New Emissions bands (g/CO2/km)	First year rate	Standard rate*	Current Emissions bands (g/CO2/km)	Current 1st year		Current ongoingVED
0	£0	£0	Up to 100	£0		£0
1-50	£10	£140		£0		£0
51-75	£25	£140		£0		£0
76-90	£100	£140		£0		£0
91-100	£120	£140		£0		£0
101-110	£140	£140	101-110	£0		£20
111-130	£160	£140	111-120	£0		£30
			121-130	£0		£110
131-150	£200	£140	131-140	£130		£130
			141-150	£145		£145
151-170	£500	£140	151-165	£185		£185
			166-175	£300		£210
171-190	£800	£140	176-185	£355		£230
191-225	£1,200	£140	186-200	£500		£270
			201-225	£650		£295
226-255	£1,700	£140	226-255	£885		£500
over 255	£2,000	£140	Over 255	£1120		£515
*cars over £40,000 pay £310 supplement for 5 years					alternate fuels get £10 discount on above

All in all . . .

Purchasing most new vehicles after 1 April 2017 will be a more expensive endeavor than it is now because of the new VED. So, if you're thinking of buying a new car soon, it's worth checking out prices now to benefit from the current VED rate.