How to avoid paying car tax
There are lots of promotions from manufacturers to seduce the consumer into buying a particular vehicle. With the cost of motoring going down with petrol costs, sliding car tax brackets and new-age technology all providing lower cost implications for those buying a new car.
Two examples in particular:
Vauxhall has re-ignited the £2000 scrap your car promotion – An awesome offer for those with a vehicle of low value.
In the US, Ford are about to promote their excess stock and are all but giving away some vehicles before year-end – we hope to see this decision extended across the pond to us here in the UK.
However, for those who are not enticed by the deals on offer it is worth considering other ways to keep the cost of motoring down to a minimum – Vehicle excise duty (VED), the technical term for our road tax or car tax, is a taxation charge based on how environmentally friendly a vehicle is. The more environmentally friendly the vehicle, the less tax you’ll pay.
So how can you get to a stage whereby you are not paying any car tax what so ever? With 13 tax bands, ranging from £0 for a brand new car to £1,090 for your first year’s tax (The rates do drop in the second year) If you get a car in band A, you pay zero tax in the first year, and this continues for the life of the car. As you would probably expect the majority of the vehicles in this category tend to be the smaller city cars there are options for a bigger car tax-free if give consideration to a diesel engine.
You also don’t need to pay the tax in the first year on any cars in bands B, C and D. However unlike band A, the rate will increase annually – Bands B, C and D go up to £20, £30 and £110 per year respectively.