BUYERS LOOK TO PRE-REG CARS TO BEAT TAX RULES

Many new car buyers looking to beat new VED rules will have to opt for a pre-registered vehicle to get a car before new legislation kicks in on 1 April, according to research by Honestjohn.co.uk.

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, which will see previously tax-exempt cars become liable for road tax payments. The move will add more than £500 to the long-term running costs of many of Britain’s most-popular and ecofriendly cars.

The decline in the value of the pound has also stretched waiting times as car manufacturers look to prioritise stock to more profitable countries.

The research found that buyers are being given lead times of four to five months for the Mercedesbenz C-class and Volvo XC90, while buyers of the Ford Focus face a wait of 3.5 months.

However, while waiting times are increasing, the research shows that buyers can still get a zero VED vehicle by choosing a preregistered car instead.

Pre-registered cars are effectively surplus stock, sold cheaply to dealers who then register them before selling them on as ‘exdemo’ 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 – which won’t apply to cars registered after April 1, 2017.

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.

For example, the UK’S bestselling car – the Ford Fiesta 1.0 Ecoboost 100PS – will cost £540 more to tax over four years, while buyers of the V8 Mustang stand to save £245 over the same period of time. This is in spite of the fact that the American muscle car emits three times more CO2 than the efficient Fiesta.

Honestjohn.co.uk’s managing editor, Daniel Powell, said: “The new VED rules are a mixed message from the Government, as they’re reducing the incentive for customers to choose low-emission cars. ”

Until now, the Government has offered low VED – zero in many instances – 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 and introduced rules to force buyers of new efficient and affordable cars to pay more.

Under the current tax rules, cars that emit less than 99g/ km of CO2 qualify for zero VED; however, from 1 April 2017 the current 13-band tax system will be replaced with three new bands – zero, standard, premium – plus a surcharge for cars with a list price above £40,000.

This means all new cars that emit less than 100g/km will pay for road tax after 1 April, only true zero-emission cars will continue to be tax-free. The move will add £540 to the long-term running costs of some of Britain’s cleanest cars. Even hybrids won’t escape, with buyers of the Toyota Prius 1.8 VVT-I paying £415 more over four years, while Tesla S drivers will have to pay an additional £930.