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Consumers in the dark about April’s car tax changes

Consumers appear to be largely unaware of the road tax changes that will affect all new cars sold from April and which could see hundreds of pounds being added to some motorists' annual tax bills.

Just 6% of those who took part in a survey conducted by the Carbuyer website claimed to be fully aware of the new road tax regime. A further 8% said they knew that changes were coming, but a massive 86% admitted they were totally in the dark.

Under the current scheme, scores of different cars are exempt from road tax, or Vehicle Excise Duty. That’s because they emit less than 100 grammes per kilometre of carbon dioxide. For cars registered after April, however, only those that produce no CO2 – fully electric and hydrogen cars – will be spared road tax.

All other models registered from then will be liable for an annual road tax bill of £140, regardless of their CO2 emissions. While the first year of road tax will still be based on CO2 emissions and will range from £10 to £2,000, this fee is almost always absorbed in a car’s on-the-road price and isn't usually seen as a running cost by consumers.

However, cars with a list price of more than £40,000 will also incur an additional £310 levy for the first five years of ownership, bringing their total annual VED bill to £450 during that time.

“While the changes should provide more reasons for cost-conscious buyers to choose a fully electric vehicle, they remove much of the incentive for buyers to choose low-emission models with a petrol or diesel engine,” Carbuyer Editor Stuart Milne said. “Buyers should also be aware that the list price includes the cost of any options. Choose too many extras and you could unwittingly push your car’s price above £40,000 – that’ll cost you an additional £1,550 over five years.”

It’s not all bad news, though. Drivers who want to drive a petrol car but may have been put off by high tax rates are likely to find their engine of choice becomes more affordable under the new system, as the playing field between diesel and petrol becomes more level.

April’s new scheme won't apply retrospectively, so whichever road-tax system was active when you registered your current car will continue to apply for as long as it's on the road.