Car Insurance News Insurance
New car tax aims to encourage greener motoring
1st April 2010
Car insurance customers buying a new vehicle from today (April 1st) will be subject to a new first year rate of vehicle excise duty (VED), also known as a showroom tax, to encourage the purchase of lower carbon-emitting cars.
The rate will apply to all new cars in the first year of registration, with the exact cost based on the vehicle's CO2 emissions.
All vehicles emitting less that 130g of CO2/km will be exempt from the tax for the first year, while cars emitting more will be charged between £110 and £950, depending on the emissions level.
Paul Everitt, chief executive of the Society of Motor Manufacturers and Traders, said: "We are disappointed that government didn't take the opportunity in last week's Budget to defer the introduction of the first year rate or the increase in standard VED rates."
In February, the government announced that car insurance customers will be given up to £5,000 to buy an ultra-low carbon car from January 2011.
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