How to reduce road car tax
On passing your driving test, your next task might be looking for your first car. If on a budget, a little research can save you a small fortune in road tax. Vehicle Excise Duty or road tax is divided into 13 groups ranging from A – G. These groups determine what the driver pays for their road tax. What group your car falls in depends on its CO2 emissions.
For example, sports cars or high performance cars produce large quantities of CO2 emissions. As a result, these cars will fall into the high group. Vehicles with large engines such as 4 X 4’s and some people carriers will also fall into the higher bracket.
Older cars tend to be less fuel efficient producing more CO2 and also fall into higher tax ranges. However, if your car is registered before 2001 then it isn’t affected by the new changes. Road tax charges will be:
- £120 per year or £66 for 6 months – if engine size is lower than 1549cc
- £185.00 per year or £101.75 for 6 months – if engine size is higher than 1549cc
Cars registered after 2001 will be categorised by CO2 emissions charges.
So what car should I look for if I want to reduce car tax?
You can pay from as little as £15 to over £400 per year for road tax. Before purchasing your vehicle find out what the CO2 emissions are.
Diesel engines produce less CO2 than the petrol equivalent. Diesel cars are generally more expensive to purchase and the price per litre is more expensive than petrol. However, diesel engines tend to have a longer lifespan than petrol, they are more economical and will cost less to fill the tank up in the long run. Less CO2 emissions will lower the cost of road tax. So long term, a diesel engine may be ideal.
An automatic gearbox uses more fuel and produces more CO2 than it’s manual counterpart. When you have found your ideal car, if your driving licence permits, choose the manual version. The manual version will not only cost less to tax and require less fuel, servicing will be cheaper and transmission repairs to an automatic can be significantly more.
So what exactly is a green car?
A green car is any vehicle that produces less than 111g/km of C02 emissions. An example of cars that fall into the £35 yearly tax band are:
- Toyota Aygo (both petrol and diesel versions).
- Citroen C1 and Peugeot 107, it emits just 109g/km.
- Small-engined diesels such as the Renault Clio 1.5 dCi, Peugeot 207 1.4 HDI and Ford Fiesta 1.4 TDCI also make the grade.
What if I don’t want a green car?
There are still tax discounts for certain cars that don’t fall into the ‘green’ bracket. Again, this depends on the CO2 emissions:
For vehicles with CO2 emissions between 111 g/km and 160 g/km the allowance is 20% road tax discount.. A Vauxhall Astra 1.6 petrol is an example of a car in this tax bracket. For vehicles with CO2 emissions over 160 g/km the allowance is 10% road tax discount. A Audi A3 1.6 petrol is an example of a vehicle in this road tax bracket.
The Government is however reducing these discounts. Green cars that allow 100% tax discount is due to end March 2013 and vehicles that fall into the 20% discount bracket will be reduced to 18% from April 2012. Vehicles that fall into the 10% tax bracket reduction will fall to 8% also in April 2012
Your road tax can be purchased for a period of 6 or 12 months. Purchasing your tax for a 6 month period costs around 10% more than 12 months. Road tax can be purchased at a post office or online.