Buy a car that avoids the new 2017 road tax rules

2017 road tax rules: how to avoid paying more tax

BuyaCar team
Apr 3, 2017

If you're buying a car registered after April 1 this year, then the rules for calculating road tax (also known as car tax) have changed. Anyone affected by the new charges, will probably have to pay hundreds of pounds more to keep their car on the road.

Some of the most popular and eco-friendly vehicles are among the most severely affected. Certain Ford Fiestas, Vauxhall Astras and Nissan Qashqais are among dozens of models that were exempt from tax under the old system because of their low emissions but now attract £400 in tax over three years. You'll pay £275 for a Toyota Prius over three years, compared with nothing previously. 

In some extreme cases, some vehicles that didn't attract any tax under the previous rules will be liable for almost £1,000 in car tax over three years.

If your car was on the road before April 1, it will be taxed under the current car tax rates for the rest of its life, so you don't need to worry - until you replace it. Company car tax rates are also unaffected, so choosing a low-emissions car may still be a good move.

Search for pre-registered cars that beat the tax increases

Buyers of Britain’s cheapest cars will pay a heavy price. You’ll pay £30 a year in car tax if you buy a Dacia Sandero - with a £5,995 list price - which was registered by the end of March.

But cars registered after April are subject to a first-year charge of £160, then £140 in subsequent years. Over three years, you’ll pay an extra £380 in tax - a 633% increase.

Jump to the new road tax rule losers and winners

The large discrepancies occur because the pre-April car tax system is based on carbon dioxide (CO2) emissions. Any car emitting an average of up to 100g per kilometre is exempt from tax and the annual rate is a maximum of £505.

But under the latest set of rules, only electric cars with no emissions from their exhaust are exempt from tax. Owners of all other cars emitting 1g/km CO2 or more will pay between £10 and £2,000 in the first year that their car is registered, depending on the precise CO2 emissions.

From the second year, all owners - apart from those with zero emission cars - must pay a £140 flat fee. There's also an additional wealth tax of £310 on cars that cost more than £40,000 when new, which applies from the second year that a car is registered to the sixth.

If you buy an alternative fuel car, which includes a hybrid, then you'll get a £10-a-year discount on your tax.

So should you save on tax with a used car or opt for a brand new one that's taxed under the latest rules? Our guide will tell you all you need to know.

Read about the new 2017 car tax rules in full


2017 road tax rules: the losers

If you're one of the handful of people considering a Porsche Panamera 4-E Hybrid (above), then buying one registered before April will mean that you don't have to pay tax. Buying a brand new model, however, will cost you £925 over three years.

That’s one of the more extreme examples - and if you can afford the car, then the extra money is unlikely to cause you too many problems. But this tax change doesn’t just affect the wealthy: virtually every buyer will be worse-off under the new rules.

Economical cars
Unless your car runs only on electric power, then low emission cars with CO2 emissions of 100g/km or less will see some of the most punitive rises. Hundreds of thousands of these are bought each year: one in five new cars sold in 2015 was tax exempt.

Under the old rules, cars as diverse as the tiny Kia Picanto, family-size Vauxhall Astra and giant Volvo XC90 are available in versions that are exempt from tax. If they are registered after April 1, owners will pay at least £290 in tax over three years - for most cars with CO2 emissions between 91 and 100g/km, the bill will be £400.


Average cars
The average new car has CO2 emissions of 121g/km. The previous system charged the owner of an average vehicle £220 in car tax over three years. The new scheme will raise that to £440 - that’s an extra £220.


Cars costing more than £40,000
A wealth tax on cars with an official price of more than £40,000 will cost owners an extra £310 a year from the second year that a vehicle is registered to its sixth, even if you get a new car discount that brings the price you pay below the threshold.

Cheaper versions of the Land Rover Discovery Sport will escape the extra tax. Owners will pay £480 over three years under the new scheme. But more expensive versions - such as the HSE Black - will be liable for £1,100 of charges.


2017 road tax rules: the winners 

Electric cars
Electric cars like the Nissan Leaf (above) appear better value because theyare the only vehicles exempt from tax. Almost all other owners pay more under the new rules.

Search for deals on electric and hybrid cars


Cars emitting between 166-170g/km CO2 or 186-190g/km CO2 and costing under £40,000
As long as you’re planning to keep your car for five years or more, and you want a car that falls between these narrow CO2 bandsm then it’s worth looking for a mode registered after April 1 .

You’ll pay £1,140 over five years for an older VW Tiguan R Line 2.0 TDI 240PS with emissions of 167g/km CO2 and an official price of £39,270.

If it’s registered after April 1, the five-year cost is £1,060 - showing a minor £80 saving.


High emitting cars from 201g/km CO2 and costing under £40,000
Because the new tax regime charges a flat rate after the first year, drivers of high-emitting cars that are hammered under the older rules can save - again if they hold on to their cars for five years or more. The savings are biggest - £625 - over five years for vehicles emitting 226-255g/km CO2 - but only if the list price of the car is less than £40,000.


2017 road tax rules for each type of car

Whether you're looking to buy a cut price city car or a thundering sportscar, we've rounded up examples of typical cars in different categories to help you decide whether it's worth picking your car to beat the tax changes.

2017 road tax rules: city cars

CO2 g/km3yr tax cost pre-April3yr tax cost from AprilIncrease
Skoda Citigo 1.0 74bhp SE L GreenTech 5dr98£0£400n/a
VW 1.0 75 High up!101£40£420950%
Renault Twingo Play SCe 70 5dr112£60£440633%
Abarth 695 1.4 16v T-Jet145£435£48010%


2017 road tax rules: superminis

CO2 g/km3yr tax cost pre-April3yr tax cost from AprilIncrease
Peugeot 208 Allure 1.6 BlueHDI 7579£0£380n/a
Ford Fiesta 1.0T EcoBoost 100PS Zetec 5dr99£0£400n/a
Dacia Sandero Access 1.2 75 5dr130£220£440100%
Vauxhall Corsa VXR 1.6 Turbo174£720£108050%


2017 road tax rules: family cars

CO2 g/km3yr tax cost pre-April3yr tax cost from AprilIncrease
Ford Focus Style ECOnetic 1.5 TDCi88£0£380n/a
Peugeot 308 1.2L PureTech 82 Access114£60£440633%
Vauxhall Astra Tech Line 1.4i 100PS 5dr124£220£440100%
Nissan Pulsar DIG-T 190 N-Connecta134£390£48023%



2017 road tax rules: hot hatchbacks

CO2 g/km3yr tax cost pre-April3yr tax cost from AprilIncrease
Peugeot 208 1.6 THP 200 GTI125£220£440100%
VW Golf GTI 2.0 220PS139£390£48023%
Skoda Octavia vRS 2.0 TSI 220PS146£435£48010%
Ford Focus RS 2.3 EcoBoost 320PS175£720£108050%


2017 road tax rules: crossovers and SUVs

CO2 g/km3yr tax cost pre-April3yr tax cost from AprilIncrease
Renault Kadjar Expression+ DCi 11099£0£400n/a
Nissan Qashqai Acenta 1.2 DIG-T 115PS129£220£440100%
Land Rover Discovery Sport SE Tech TD4 180PS 4WD139£390£48023%
Ford Edge Sport TDCi 180 AWD152£555£78041%


2017 road tax rules: family saloon cars

CO2 g/km3yr tax cost pre-April3yr tax cost from AprilIncrease
Audi A4 SE 2.0 TDI 150PS Ultra99£0£400n/a
Lexus IS 300h Luxury auto101£40£420950%
BMW 320d Sport111£60£440633%
Mercedes C200 AMG Line132£390£48023%


2017 road tax rules: hybrid cars

CO2 g/km3yr tax cost pre-April3yr tax cost from AprilIncrease
BMW i3 with Range Extender 94AH12£0£260n/a
BMW 740e49£0£880n/a
Porsche Panamera 4E-Hybrid56£0£895n/a
Toyota Prius 1.8 VVTi Active70£0£275n/a


2017 road tax rules: luxury cars

CO2 g/km3yr tax cost pre-April3yr tax cost from AprilIncrease
Tesla 60kWh Model S0£0£620n/a
BMW 730 Ld Exclusive127£220£1060382%
Aston Martin V8 Vantage299£2150£290035%

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