More than half of car buyers in Leeds are unaware they may face a much larger excise duty bill from next month.
From April 1 the first vehicle licence will be calculated on a vehicle’s CO2 emissions, potentially shaking up budgets for millions of car buyers.
Leeds is one of five UK cities which have to introduce clean air zones by 2020 under plans to reduce pollution. This will initially affect commercial vehicles, but could be rolled out further.
Under the current rules, cars that emit less than 100g CO2/km do not pay tax, but under the new legislation only vehicles with no tailpipe emissions, such as electric and hydrogen cars, will be exempt from the standard rate of vehicle tax.
This means an estimated 400,000 cars that were previously classed as being low emission will now be liable for a £100 charge in their first year.
The survey of 1,000 car buyers, carried out by NFDA Trusted Dealers, found that 56 per cent of people in Leeds were unaware of the changes. And a quarter of those who did know about them did not understand what they meant in practical terms.
Just one in ten people understood they may have to pay more tax on an equivalent new car bought from April onwards. The biggest impact will be on drivers of hybrids and many other low emission vehicles formerly exempt from road tax.
NFDA Trusted Dealers managing director Neil Addley said: “The survey results clearly highlight that there is not enough information available to consumers about the changes and how it will affect them in practical terms.
“The increase in vehicle exercise duty will be significant for many drivers, especially those with low emissions vehicles who were previously exempt from the tax. Research suggests that buyers of smaller, more economical cars will face the biggest tax hike, in some cases paying up to nine times more than they currently do.”
The cost of the road tax changes
It is estimated the changes to vehicle excise duty could cost car buyers more than £400 million in 2017.
A survey by NFDA Trusted dealers asked whether the tax changes will make consumers less likely to buy a new vehicle, one in ten people in Leeds said it would delay them changing their car in the immediate future. The Government offers incentives up to £4,500 for car buyers choosing new ultra-low emission vehicles, but more than two thirds of those surveyed were unaware of the grants on offer.
Around one in ten drivers believe there needs to be more support about this.