Car sales killed by tax
SIR – A decline in the volume of new car sales in the UK is, according to analysts, due to Brexit uncertainty (report, October 26).
While manufacturers may be nervous about the future, it is not clear why leaving the EU in 18 months’ time would put people off buying a car now. I suppose it couldn’t have anything to do with the punitive Vehicle Excise Duty (VED) that came into force in April, could it?
Until then a new, small car emitting 99g/km of carbon dioxide would have been zero-rated for VED. The same car now costs £120 a year. For a new car in the top VED band, the cost has risen from £535 to £2,000 in the first year, with a continuation rate of £140 a year.
Any car with a list price over £40,000 incurs an additional £310 “wealth tax”. While electric cars pay no VED, those valued at more than £40,000 still incur this cost.
Is it any wonder that car buyers, at all levels, would choose to run their existing ones for a bit longer? Richard J Smith
Reading, Berkshire