Thursday, 10 July 2008

Car tax rises leading to confusion and anxiety

Car tax rises leading to confusion and anxiety by Swinton Group

In the wake of the latest Budget announced by the Chancellor of the Exchequer, there is growing confusion about which cars will be clobbered for more tax according to one of the UK�s leading car insurers.

Swinton Car Insurance is concerned that the latest wave of car tax rises outlined by Gordon Brown is leaving drivers unsure about which category their car fits into and whether their vehicle is one of the heaviest polluters.

The Manchester-based insurance company believes that the vast majority of drivers of family saloon type vehicles are unsure where their car fits on the pollution scale and how much it is costing them.

But, more alarmingly, an increasing number of drivers are getting worried that they may unwittingly be falling into Vehicle Excise Duty (VED) banding brackets which are becoming demonised for being so-called gas guzzlers.

Jon Kirk of Swinton Insurance said that it is all very well the Chancellor raising car tax for the heaviest polluting vehicles and lowering it for the most environmentally friendly cars, but the simple truth is very few people actually know which of the seven A-G bandings their cars fall into.

�It came as no surprise that the Chancellor put up car tax on the heaviest polluting vehicles in the latest Budget,� said Jon. �And most people know that 4x4s are the worst polluters on UK roads, but that�s not the whole story.�

As he points out, figures from the Society of Motor Manufacturers and Traders revealed that the worst polluting band only accounted for 7.5 per cent of all new cars sold in 2006.

At the other end of the scale the number of cars which fall into the first two bands only accounts for 4.7 per cent of cars.

�This means that nearly 90% of cars on UK roads fall into just four of the seven bands,� said Jon. �So you can see where the concern is arising as there seems to be a huge mid-ground where owners of typical family cars can�t be sure where on the scale they are in terms of carbon emissions.�

Swinton Insurance points to a list of examples of cars in the different bands to try to help clear up some of the confusion.

Band A (cars which emit less than 100g/km) includes the Honda Insight petrol electric hybrid and the Smart diesel.

Band B (cars which emit between 101-120g/km) includes the Toyota Prius 1.5 litre petrol-electric hybrid, Smart car 0.7 litre petrol, Citroen C2 1.4 litre diesel and the Ford Fiesta 1.4 diesel.

Band C (cars which emit between 121-150g/km) includes Fiat Panda 1.2 petrol, Ford Ka 1.3 petrol, VW Golf 1.9 TDI diesel, Ford Focus 1.8 TDCi diesel hatchback and the Jaguar X-type 2.0 diesel saloon.

Band D (cars which emit between 151-165g/km) includes the VW Passat estate 1.9 TDI diesel, MINI One hatchback 1.6 petrol, Ford Fiesta 1.6i petrol and the Peugeot 307 1.4 petrol.

Band E (cars which emit between 166-185g/km) includes the Ford Mondeo saloon 1.8i petrol, Vauxhall Vectra 1.8 petrol saloon, Rover 75 1.8 petrol and the Toyota Avensis 1.8 petrol saloon/hatchback.

Band F (cars which emit between 186-225g/km) includes the Land Rover Freelander 2.0 diesel, Toyota RAV4 2.0 litre petrol, Audi A4 1.6 petrol, BMW 5 series estate 3.0 diesel and the Mazda MX5 2.0 petrol.

Band G (cars which emit more than 225g/km) includes the Jaguar X-type 2.0 petrol saloon auto, Porsche 911 Carrera Coupe 3.6 litre petrol, Renault Espace 2 litre petrol Range Rover 4.4 V8 petrol auto and the BMW X5 4.8 litre petrol.

Simply by making these examples known, Swinton Insurance hopes to put drivers at ease because they have a better framework to work from when trying to establish how much more they are going to have to pay each year in car tax.

�The biggest problem is that most motorist have little idea how much the increases announced by Gordon Brown are actually going to cost them until they receive their car tax renewal notices,� said Jon.

�And given the Chancellor�s timescales, some people won�t feel the full effect of his announcement for another 12 to 18 months.�

While there are losers who will have to pay more car tax because of the Chancellor�s announcement, there are also winners. Drivers of cars in Band B will see their road tax bills cut by �15 to �35.

But this will only be short-lived because the Chancellor also said VED will rise by �5 for each of the next three years. Drivers of petrol cars also face an extra hike because Gordon Brown said he will be aligning the differing rates between petrol and diesel cars to the higher diesel rate.

Swinton Budget Story

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