Secrets of saving cash on cars
Drive down the cost of motoring
ROAD tax is being ramped up by hundreds of pounds for new car purchases from next month. The Mail on Sunday looks at the hike and explores ways to fight back by lowering other motoring costs.
UNDERSTAND COMPLEX NEW ROAD TAX
WHEN the tax disc was scrapped three years ago, the amount of money pocketed by the Driver and Vehicle Licensing Agency fell by £ 93 million as drivers began to dodge the tax.
To help make up the shortfall, the Government is raising vehicle excise duty – known as road tax – that motorists must pay on new cars from April 1. For all new vehicles there is a one-off, first-year vehicle excise duty based on the carbon dioxide the exhaust pumps out – calculated on the number of grams of carbon dioxide produced per kilometre of travel.
Those with a pure electric car emit no carbon dioxide so have no first-year emission tax to pay. But owners of Britain’s best-selling Ford Fiesta car, which emits 104 grams of carbon dioxide per kilometre, are liable to a £ 140 first- year bill. Those that cough out 255 or more grams of carbon dioxide per kilometre, such as an Aston Martin DB9, get a one-off first year bill of £2,000.
But on top of this, if you buy a brand new petrol or diesel car that costs less than £40,000 from this April, you then also pay a flat rate of £140 a year from the second year. Hybrid vehicles that also run on alternative fuel such as electricity, liquid petroleum gas or hydrogen, will be charged a flat rate of £130 a year from year two.
Motors that emit no carbon dioxide, like electrics, pay nothing.
Buy an expensive vehicle and you are hit with a further ‘premium’ tax bill. A car with a list price of £40,000 or more – regard- less of whether it billows out lots of smoke or not – will be liable to a further £310-a-year surcharge as a ‘premium’ for five years following the first 12 months of ownership.
It means that even owners of an expensive new all-electric car will be hit with a bill. Drive a top-priced gas-guzzler and you will get a double whammy of the standard £140 a year plus a further £310 from year two until year six – so be forced to pay a total of £450 a year.
Older cars are still liable for the same rate of road tax based on emissions as before – at rates that are usually cheaper than the new flat rates introduced. For example, owners of older ‘green’ vehicles releasing up to 100 grams of carbon dioxide per kilometre into the atmosphere will continue to pay nothing.
Among them is actress Holly Wedgwood, 21. She pays no road tax on her Kia Rio car as it kicks out less than 100 grams per kilogram of carbon dioxide – having been converted to also run on liquid petroleum gas.
The conversion cost her £1,500 two years ago, but it saves £100 a month on her fuel bill, so has already paid for itself. Holly says: ‘It cuts the cost of driving in half as gas is cheaper than petrol. I use petrol for turning on the engine and flick a switch for gas power to take over. The gas has a separate tank and I refuel when I see an “autogas” logo.’
The cost for a Ford Fiesta emitting 104 grams of carbon dioxide per kilometre bought before April is £20 a year – £120 less than the new rate.
Owners of old planet polluters that emit more than 255 grams of carbon dioxide per kilometre continue to pay £515 a year. Cars built before 1976 avoid road tax as ‘historic vehicles’.
HAGGLE BEFORE BUYING A NEW CAR
IT IS not only road tax that will hit buyers of new cars – the cost of Brexit has raised the price of vehicles by an average of 5 per cent in the last year.
This is because the value of the pound fell following the decision to quit Europe. This has led to a higher cost for importing cars and of raw materials used for manufacture – even when made in Britain. But by mastering the art of haggling, you might be able to knock 10 per cent or more off the list price.
You can check out the cheapest prices on offer using websites such as What Car? This service not only offers vehicle reviews but also a socalled ‘target price’ to pay. You should be able to beat the advertised ‘list price’ that is the full cost of a car.
Already discounted cars are worth targeting – and at this time of year there may be a glut of vehicles that sales staff are struggling to shift after an initial rush for March registration plates. But on top of this, look for extras to be thrown in to seal the deal, such as trim, upgraded stereos or sat-navs.
If you are intimidated by the prospect of being talked into a sale, take along a charming but tough negotiating friend or family member for the haggle. After initial sales talks, walk
away without shaking hands and visit a competitor. It forces the seller to do the chasing. Playing one dealership off against another can also strengthen your hand.
The face-to-face appeal of a local trader is not to be underestimated, but online brokers such as Carfile, DriveTheDeal and Broadspeed are also worth looking at as they might undercut prices.
If you are getting rid of your old car at the same time, you usually get more money by selling it privately – using websites such as Autotrader and PistonHeads – than in a part-exchange at the garage.
PAY FOR A SECOND-HAND INSPECTION
WHEN you consider that a brand new motor costing £20,000 depreciates the moment it is driven off the forecourt – and might be worth just £12,000 after only one year – buying second- hand can make sense.
As buying an older vehicle is fraught with danger for those who are not a car expert, it is worth paying a professional to check a prospective purchase.
Local garages will often offer their assistance for a private sale and charge between £100 and £250 for a full check of a motor.
You can also pay motoring organisations such as the RAC or AA for an inspection, which will charge a similar fee. Checks to be made include a thorough look at the bodywork, including signs of any crash damage repair, oil and engine leaks, electrics and that the mileage is genuine using tell-tale signs of wear.
Take it for a spin to make sure the gearbox, brakes, steering and handling all feel good. Listen out for knocking noises from the engine as this could mean a repair bill of hundreds of pounds.
It is also important to check the paperwork. This includes reading the V5C registration certificate. Ask for details of previous owners and any work done on the car. Ensure the person selling is the one named. You can contact the DVLA on 0300 790 6802 to check that the colour of the car, engine size and registration all match up if you are concerned.
Ideally, you will also have a service history with copies of receipts for maintenance work. Make sure to check the current MOT certificate and any advisory note, such as if the tyres are getting worn.
If you have a specific model of car in mind, then websites such as Parkers can provide a guide on prices. It even has a ‘free car valuation by number plate’ facility to give you a rough idea if you have a specific car in mind. Buying blind off an auction website such as eBay is a gamble. You expect to pay more with a dealership but if it includes a guarantee against faults for the first few months it is excellent value.
Purchasing through a dealership should also give you protection under The Consumer Rights Act 2015 that what you purchased was as described, of satisfactory quality and fit for purpose.
You have 30 days after purchase to make a claim for a refund and after this period you can ask for a repair if it can be proved the fault was there when it was bought – and you should make the claim of fault within six months.