If the Chancellor does raise taxes for larger vehicles, do you think this will have a major effect on the second hand market?
The 4x4 market has certainly been hit hard by the anti Chelsea tractor brigade. Will this now start on larger engined cars? When cars become older I fear that bigger cars will become worthless due to the high annual road licence fee (?£400).
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Roger
A fine is a tax for doing wrong. A tax is a fine for doing well.
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In the overall scheme of things £400 seems neither here or there. OK, its a consideration but not a big one.
The price of fuel must surely be a bigger consideration when some of the large vehicles struggle to do 20 mpg.
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IanS
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If it happens at all it's a long way off. I can't see anyone buying a £30,000 car now being concerned that it might be hard for someone else to sell in 15 years' time. And in any case, even if it does go up to £400 for a Band G car, the difference is only £210 above the current Band F rate - much less than a car that size will cost to insure or service for a year.
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Changes in fashion have a much bigger impact on 'lifestyle' vehicle values than relatively small changes in road tax (relative to purchase price).
4x4's have fallen out of favour big time in the US, and we are following. A £200 tax increase is insignifiant to the buyer of a vehicle for which a single tyre can cost £150+
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Whats concerning is what is going to be classed as a 'larger engine'
This budget perhaps 3 litres and above, next year 2 litres etc etc..
The average 'mondeo man' engine size of 1.8 is already quite a high tax band!
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It's already done by CO2 value, not engine size, and I'd be surprised to see that change. Bands and rates are here: www.vcacarfueldata.org.uk/search/vedSearch.asp
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Having read this thread, I've decided to tax my car early - it runs out at the end of March. So, even if Gordon puts up road tax, at least I won't be paying the increased fee this year!
Number_Cruncher
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If the Chancellor does raise taxes for larger vehicles, do you think this will have a major effect on the second hand market?
According to www.direct.gov.uk/en/Motoring/OwningAVehicle/HowTo...4 , when the new top Band G was introduced last year, it only applied to cars registered on or after on or after 23 March 2006. Presumably any new higher bands will only apply to cars registered after this budget.
A VED increase of say £200 a year will make little or no difference to someone buying one of the relevant vehicles new (many of them depreciate by more than £200 a week), but in the ling term it does seem likely to hit used car values. The extra £200 will be a lot more significant to someone who buys a ten-year-old big car for £1,000.
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The banded system of car tax does not apply to older vehicles. So if its level really does have an effect on secondhand values, surely it ought to increase demand for old vehicles at the expense of new?
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The banded system of car tax does not apply to older vehicles. So if its level really does have an effect on secondhand values, surely it ought to increase demand for old vehicles at the expense of new?
Only at the margins, surely.
A February 2007 gas guzzler may look a little more attractive than an April 2007 instance of the same model. But unless the tax is a whole lot higher than advertised, then I can't see it making much difference between a 2009 car and a 2006.
Unless, of course, people are worried that once gas guzzlers are in a higher band, the penalty for those bands may be increased massively. If we have a new band J for cars over 300g/km, that may only be taxed at £400 a year for now ... but I wouldn't be surprised if that figure starts to creep up.
In Ireland, the annual road tax on a car over 3.0 litres is Euro#1,343 (see tinyurl.com/2v47dv ) ... and once the higher bands are in place, it wouldn't be surprising to see the tax here increasing to that sort of level, and maybe beyond.
So, I guess that any gas guzzler which qualifies for one of the expected new higher bands probably ought to be regarded as a probable target for much higher tax in future ... and if that impression gathers hold, then I guess there will be a big effect on secondhand values.
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Surely an Almera auto is a gas guzzler under the rules, or soon will be NW?
Must say I think it is a loathsome moralistic expression though. :o)
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Surely an Almera auto is a gas guzzler under the rules, or soon will be NW?
When I bought it, it was in the highest tax bracket, but mercifully a few weeks later a higher bracket appeared, and with any luck there'll be a few more higher ones to come. So I'd say that the tax rules appear to be defining it as less of a gas-guzzler than it used to be ... but one friend who watched my mpg display asked if I was going to be marrying an oil sheikh. ;-)
The spread of DSG and DGS gearboxes will hopefully mean that in future, an automatic gearbox won't automatically mean gas guzzling, but for now my overweight and inefficient Almera is indeed excessively thirsty.
At 187/km, it looks pretty sick compared to the 120 g/km Citroen C4 1.6HDI EGS which HJ just tested, but it's still about the same as a manual Mondeo 1.8, and both are in a different league to something like the Mercedes R500L at CO2 317-324/km. It's quite right that a car like mine with a drink problem should pay a tax penalty over the Citroen, but by the same logic, the alcoholic 5-litre monster should be paying a hell of a lot more.
I suspect, though, that what GB will do in the budget is to create the new bands without wildly higher road tax, and then over the next few years incrementally turn the screws.
Must say I think it is a loathsome moralistic expression though. :o)
Lud, I refuse to believe that you are quite as amoral as you like to make yourself out to be :)
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>> The banded system of car tax does not apply to older >> vehicles. So if its level really does have an effect on >> secondhand values, surely it ought to increase demand for old vehicles >> at the expense of new? Only at the margins, surely.
That's what I am saying, really. At the present relatively low levels of tax the effect on sales, whether new or secondhand, is minimal.
But imagine that tax on new vehicles went up to a significant proportion of the cost of the car (as in Cuba, where new vehicles are effectively banned because of massive import taxes) then the result might be a disproportionate rise in the value of old cars not affected by the banding system. It might become more cost effective to restore an older model instead of paying an exhorbitant tax on a new one. Look at the distorting effect even a £165 road tax has on classic car prices around the 1972 mark. Then magnify the effect by applying a £2000 pa tax on so-called gas guzzlers.
At present this does not happen, because cars are valued for their status, fashion and cosmetic appeal, rather than their utility, and car tax is low.
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