Pre-registered models only option for car buyers to beat new road tax rates

New car buyers looking to beat the new VED rules will now have to opt for a pre-registered vehicle to get a car before the new road tax rates commence on 1 April.

The news comes as waiting times for some new cars have increased from two to five months as buyers look to get a zero or low VED car before the 1 April deadline.

This will see previously tax-exempt cars become liable for road tax payments – a move that will add more than £500 to the long-term running costs of many of Britain’s most-popular and eco-friendly cars. 

The April 2017 road tax rates will only apply to brand new cars, and won’t be applied retrospectively, meaning a pre-reg car could bring significant savings during its life.

Previously, the Government had offered low and zero VED rates to entice car buyers into eco-friendly vehicles. However, with 74 per cent of new cars emitting less than 130g/km of CO2, the Government has changed its policy, introducing rules to force drivers of efficient and affordable cars to pay more. 

This means the UK’s best-selling car – the Ford Fiesta 1.0 EcoBoost 100PS - will cost £540 more to tax over four years than it did under the previous VED system.  

However, while the new rules only affect new cars bought from the 1 April and waiting times are increasing, our research shows that buyers can still get a free to tax vehicle by choosing a pre-registered car instead.

Pre-reg cars are effectively surplus stock, sold cheaply to dealers who then register them before selling them on, often as ‘ex-demo’ or ‘delivery mileage’. Buyers can save as much as 30 per cent off the list price of a nearly new Volkswagen Golf or Ford Focus, as well as qualifying for free road tax.

Under the new road tax rules, seven out of 10 new car buyers will pay more after the 1 April, as the Government looks to take an additional £1.4 billion in VED over the next four years. 

This means all sub-99g/km cars will pay for road tax. Even hybrids won’t escape the tax, with buyers of the Toyota Prius paying £405 more over four years, while Tesla S drivers will have to pay an additional £930.

The April 2017 road tax rates will only apply to brand new cars, and won’t be applied retrospectively, meaning a pre-reg car could bring significant savings during its life.

Top 10 tips for getting a great pre-reg deal

While buyers of new cars over £40,000 will be forced to pay an extra £310 a year for five years, we have found a gap in the tax law that allows some of the UK’s most-polluting cars under the £40,000 price limit to benefit.

Buyers of the Mitsubishi Shogun 3.2 DI-DC automatic, for example, will save £265 over four years, regardless of the fact that the SUV produces a whopping 245g/km of CO2. It’s a similar story for the Ford Mustang and Nissan 370Z, with both emitting more than 240g/km and saving hundreds of pounds under the new system.  

New 2017 road tax rules explained