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Bruce Banner

Road Tax up on new cars from next month.

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Funny thing is that (for most) the impact of road tax is negligible considering the other costs of owning a new car -- mainly depreciation, but also most new car owners put quite a few miles on, so also fuel (taxes).  But for an older car (often on lower annual mileage) road tax can be a fair whack of the running costs.  I predict precious little impact now, but in 10 years time 2nd hand car buyers will be valuing the pre 2017 car much more highly.

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This increase is part reason why we're going from replacing our new cars every two years to writing down our two 66 plates over seven years then we'll consider our options for either an EV or less likely ICE. 

The HMRC chasing the pennies has lost them the VAT on at least four sales of circa £100,000 combined value (2×40 & 2x10).

Edited by longtomsilver

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3 hours ago, dgul said:

Funny thing is that (for most) the impact of road tax is negligible considering the other costs of owning a new car -- mainly depreciation, but also most new car owners put quite a few miles on, so also fuel (taxes).  But for an older car (often on lower annual mileage) road tax can be a fair whack of the running costs.  I predict precious little impact now, but in 10 years time 2nd hand car buyers will be valuing the pre 2017 car much more highly.

You what? An old PT Cruiser might be worth £1k but attracts VED of £500.


A new one (if they still made them) with the same engine would only be taxed at £140. So the newer one is much more desirable.


£140 (new) vs £0 (old) is not so big a deal as £500 (old) vs £140 (new).

 

Edited by bambam

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25 minutes ago, bambam said:

You what? An old PT Cruiser might be worth £1k but attracts VED of £500.


A new one (if they still made them) with the same engine would only be taxed at £140. So the newer one is much more desirable.


£140 (new) vs £0 (old) is not so big a deal as £500 (old) vs £140 (new).

 

Sorry -- I was considering the raft of low emissions cars that have sprung up.  So a £40 pa car is £100 better than an otherwise identical £140 pa car.

Anyway, an average newish car costs £15k (just made that up -- I've no idea what people pay these days), and is worth £5k after 4 years -- so £2.5k per year.  The old one costs £1k, is shagged after 4 years (say), so £250 per year, plus a few evenings under the bonnet bodging repairs.  That £2250 (plus financing costs) is the cost of a 10 year old car vs a new one, not the £40 vs £140.  But at 10 years (say), that £100 starts to be a significant proportion of the total cost of ownership.

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