Anyone purchasing a car which costs more than £40,000 are issued an extra £335 Vehicle Excise Duty charge for five years. However, experts at Motorfinity have warned this ‘expensive car tax’ is calculated based on the car’s list price which could cause confusion.
“COVID-19 restrictions have led to longer lead times in factories, and consumers don’t have a crystal ball to confidently predict if their vehicle value price will change.
“I believe there needs to be much more transparency and guidance from the Government to ensure customers aren’t getting stung and have all the facts to make a well-informed decision about the car that’s right for them.
“Of course, cases of inflation are unavoidable but if customers have a clear understanding of how this tax is actually calculated by the Government, and how the additional extras which don’t, at first, seem like the ‘car price’ are all factored into the overall tax, it could make all the difference.”
GOV.UK confirmed drivers would have to pay an extra £335 per year if their car is valued at more than £40,000.
This exemption from the charge also applies to existing owners meaning those who purchased electric models a couple of years ago will not face charges now.
The rule has been introduced as another way to incentivise the purchase of expensive electric cars as part of the transition to eco-friendly vehicles.
However, plug-in hybrids are not exempt from the rule meaning these buyers will still need to pay the costs.