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So firstly i'll say I can't afford a new car costing 40k. But I recently bought one second hand for under 30k, 1 year old, very low miles. List price of 40.3k. Presumably the original owner paid less than 40k for it
Transpired my purchase is still subject to the extra 400 quid a year charge, and will be for the next 4 years. I knew this at time of purchase and as I really wanted the car went ahead anyway, but still think it's a pile of nonsense. Surely the tax should be based on what you paid for the car, not what you bought it for. Hypothetically I could have bought a heavier, more polluting car brand new for 39k and not be subject to the same tax
I don't get what it's for? If it's based on being able to afford 40k for a car then fair enough, charge it on the cost you paid. If it's based on emissions, road damage etc also fair enough. But charging it based on current criteria seems like nonsense to me.
I assume it's based on the notional value fo the car over the first few years of its life, not just the initial purchase price. The latter would lead to all sorts of shenanigans with folk trying to avoid tax.
I got hit with this as well. I bought a second hand 2017 Skoda kodiak and ran it for 3 yrs and the tax was whatever the std car tax is these days. I got another one exactly the same, same spec, colour, engine, pretty much the same mileage second hand again (it was just chance that it was almost exactly the same as I needed a towbar and the car had one). I think the only difference was that it has a digital dashboard which I could take or leave if I'd have had an option. When I went to tax it it was rated as a luxury car as it was slightly over the £40K when it was brand new. It is a first world problem I guess but it seemed a little arbitrary considering how car values had gone up but the threshold hadn't and you're paying vat on the full price when its first bought and then again second hand.
Harrumph
Looking at a 4 year old van (classed as a car) and the list was mid 40's new. Just one of those things TBH for the first couple of years I'll have it.
It does what it says on the tin.
It does what it says on the tin
Well technically it doesn't. It's officially called an 'expensive car supplement'. You could quite conceivably by a 2nd hand care for 10k that would fall foul of this, but 10k for a car isn't what I would class as expensive by any stretch.
Is it a slightly disguised vaguely SUV tax? I can see the need for that (different thread) but no idea how it would be justified in its own right.
I suppose the thinking is, if you can afford a £40k car then you can afford to tax it? That's a quarter of what I paid for my house, for a rapidly depreciating asset vs something still appreciating 100+ years after it was built.
I dunno. If vehicle tax was based on second-hand purchase price then it's open to a tax dodge. I buy a new car for £40k then immediately sell it to my partner for £1.
I suppose the thinking is, if you can afford a £40k car then you can afford to tax it?
I totally get that rational. But I couldn't afford a 40k car, I couldn't even afford a 30k car, yet I'm still subject to it.
Fair point about the tax dodge comment. I'm sure some greedy tax dodgers would try to game the system,
Indeed I always thought it was an increase in tax for higher polluting cars, higher value/luxury and a deterrent to keep buying new cars.
Considering you can get a modest car under £30k, it seems reasonable.
IMO, like council tax, it should be a percentage of when new list price.
It’s a hard knock life…
The latter would lead to all sorts of shenanigans with folk trying to avoid tax.
Well sir, if you would like us to fit some new wiper blades for a mere £20,000 I might just be able to knock, oooo, £19,995 off the car which by sheer coincidence brings it under the £40k.
Cougar2
Free Member
I suppose the thinking is, if you can afford a £40k car then you can afford to tax it? That’s a quarter of what I paid for my house, for a rapidly depreciating asset vs something still appreciating 100+ years after it was built.I dunno. If vehicle tax was based on second-hand purchase price then it’s open to a tax dodge. I buy a new car for £40k then immediately sell it to my partner for £1.
Well I don't know when you bought that but look at the market now, the average house price in England is £310K.
The £40K tax point is now hitting a lot of pretty normal cars (e.g. VW Passat), if it had been adjusted with inflation, it should be closer to £50K.
It’s a spite tax. Damn you, or the original purchaser for being capable of buying it. You should know your place and get back on the poverty wagon.
in reality the move from emissions-based VED to this blanket flat rate system was an incredibly badly thought out way of recouping the drop in revenue as manufacturers moved to make less environmentally damaging vehicles. The way the public embraced small engine capacity should have been applauded, instead the treasury went “oh crap everyone’s buying Octavias with 1.4l turbos and only having to pay £30 VED. Let’s move back to the 1980s system!” This was combined with a massive increase in the use of expensive technology in vehicles which kicked many into the +£40k bracket.
deterrent to keep buying new cars.
Well if it was only on new cars then that would make sense.
It should be done on emissions and weight imo. Right now it doesn't know what it is..currently a luxury ev is not subject to the charge (although it would be in future), so if I'm lucky enough to afford a new top of the range Tesla I am exempt.
Likewise Id currently pay the same additional cost for a massive 150k + range rover brand new off the show room floor as i would a second hand skoda.
It's to kill tax scams, and people buying and spelling to/from their kids, cat etc.
First world problem, tax on value and emissions is ok by me
is..currently a luxury ev is not subject to the charge (although it would be in future)
EVs subject to the same rules starting next year isn't it?
EVs subject to the same rules starting next year isn’t it?
Yep
https://www.pendragonvehiclemanagement.co.uk/news-insights/ved-rates-due-to-change/
says the gov may increase threshold, but that's less money in the pot if they do
The £40k threshold for the "expensive car charge" was introduced in 2017. It hasn't changed since. Car prices have gone up a lot (way more than inflation) in the last 7 1/2 years.
A decent spec A4 or 3 series would have been comfortably under £40k in 2017, they are more like £45-50k now.
Its another example of "fiscal drag" - see also income tax bands being frozen from about 2021 through to 2027.
If its any consolation pre april 2017 cars are subject to CO2 based tax bands. I was looking at a car recently - the post april 17 was £180 to tax , same car registered in feb 2017 was £350.
Mrs S fell foul of this when she bought a 6 month old Mini Countryman PHEV. She’s really pissed when the tax on my 3 litre diesel comes in at half the price of her tax.
but 10k for a car isn’t what I would class as expensive by any stretch.
Whereas to people living in the real world it's a bloody fortune. Wake up and realise that you're one of the fortunate ones. Anybody getting pissed off by this tax needs a good talking to.
Pretty normal A4 estate here. Bought when it was just shy of 3 years old, need to keep paying this tax until it’s hits its 6th birthday. Really does seem like a sneaky grab that it’s not increased alongside the prices of the cars themselves.
Also, there seems to be confusion about what the £40k limit means. It’s the list-price, so getting a discount on a new car wouldn’t really help.
I knew this at time of purchase and as I really wanted the car went ahead anyway
It didn't stop you buying it, so are you just moaning?
My current car was bought secondhand, but I'd had a +£40k car before and knew of the tax cost - as I'm doing the deal with the dealer I looked at the original bill and saw it was £40,042, so knew it was also over.
During negotiation I asked for 12m tax, after a bit of haggling the Salesman agreed - only later after we'd shook on the deal did he realise 🙂
I knew this at time of purchase and as I really wanted the car went ahead anyway
I'm really struggling to see what you've got to complain about. It's a tax, it's pretty arbitrary (as a lot of taxes are) but you were fully aware you were going to have to pay it, it'll have been priced into the price you paid by the market and being fully aware of it you presumably made an informed decision that you were able to afford it. That's pretty much it, isn't it?
I'm paying £335 on my 23 year old car - 177g co2 petrol. So it will go to £200 + £400 with a 4 year old van (car class) for a year or two - you just have to factor it in.
Most new EV's are over £40k these days, then again most are leased, so won't quite matter the same as those that 'buy' a used car.
Whereas to people living in the real world it’s a bloody fortune. Wake up and realise that you’re one of the fortunate ones. Anybody getting pissed off by this tax needs a good talking to.
this so very much
but 10k for a car isn’t what I would class as expensive by any stretch.
Its 20x what my cars cost.
I nearly put that it's 20 Porsches!
It should be done on emissions and weight imo.
First year road tax is. Anything over 255g/km is £2745 road tax it's the first year. Problem is that it's hidden in the OTR price and included in any finance or lease deals. If it was a separate cash payment people had to make they would be a lot more thoughtful about it.
The expensive car tax isn't charged the first year but for five years afterwards. ie years 2 to 6.
Whereas to people living in the real world it’s a bloody fortune. Wake up and realise that you’re one of the fortunate ones. Anybody getting pissed off by this tax needs a good talking to.
Indeed.
I pay for the camper too - a big, polluting, luxury vehicle, so my £335 seems a bargain.
I thought i'd see if there is any information on STW demographics - turns out STW do a reader survey! Was pretty surprised to see that there are more STW readers who have a household income of £100k+ than there are that have a house income under £50k. Indeed 5% of the households have incomes of £200k+ with the most common bracket being £75-100k.
The thought was triggered by a comment above and since I found in the info I thought i'd share - based on this 10k doesn't seem an unlikely amount for the majority of STW readers to spend on a car.
Below £20k: 50 households
£20k - £30k: 60 households
£30k - £40k: 100 households
£40k - £50k: 150 households
£50k - £75k: 350 households
£75k - £100k: 375 households
£100k - £150k: 250 households
£150k - £200k: 100 households
£200k+: 75 households
https://singletrackmag.com/surveys/
Fiscal drag. £40k car isn't quite the luxury it used to be.
Plenty of people will be happy about it though as they don't like others having nice things. Either because they can't afford them, or because they don't want others having what they can afford.
and you do really believe that people fill those surveys in honestly.
Fiscal drag. £40k car isn’t quite the luxury it used to be.
Plenty of people will be happy about it though as they don’t like others having nice things. Either because they can’t afford them, or because they don’t want others having what they can afford.
another person who has no idea what the real world is like for millions of folk. It may not be quite the luxury it was but its still an expensive luxury vehicle. Its nothing to do with jealousy. Its about understanding reality
Most new crap cars these days are heading towards £30k, that’s for a Vauxhall , nothing particularly grand or posh. Most cars are £40k + new, hence why people are not buying, and big manufacturers are on the verge of going bust
I think garages purposely hide the extra tax to people ie offering 6 months free tax so the additional charge never gets mentioned
Be thankful you’re not in France.
https://www.eplaque.fr/en/car-registration-cost-france
Up to 60k euro emissions tax (>192g. ) and/or 10 per kg above 1800kg.
another person who has no idea what the real world is like for millions of folk.
I've been there, I remember, and I still see people who are still there.
its still an expensive luxury vehicle.
I didn't say it wasn't.
Its nothing to do with jealousy.
I didn't say it was.
another person who has no idea what the real world is like for millions of folk. It may not be quite the luxury it was but it’s still an expensive luxury vehicle. It’s nothing to do with jealousy. Its about understanding reality
So says the multi home owning landlord. ?
this so very much
I second this.
Most I have ever spent on a car is £10k
Plenty of people will be happy about it though as they don’t like others having nice things
There's a bit of a victim mentality emerging here. I think people are generally perfectly ok about other people having nice things but can be a bit puzzled by them complaining about paying a tax they've become knowingly liable to by making what's really a purely discretionary purchase.
Enjoy your car, but the tax was baked into the price when you bought it.
Poorly conceived idea. I've said it before but VED should be on three simple metrics:
1. Pollution
2. Weight
3. Volume
V8 Range Rover, takes up loads of road space and weighs a ton. £800 a year? Tesla? Same. Zoe £50? Pick-up truck no longer defined as a commercial vehicle, so £800 year
bikesandboots - apologies if thats not what you meant - thats how I read it
If the car industry is struggling because no-one can afford a £40k new car, then it ought to collectively get together and think of ways to reverse its wrong headed direction of car culture. Most folk just 'need' a simple utilitarian vehicle, but we get promoted unnecessary performance, superficial luxury tat and techno trinkets. By this point in time every car in production should be simple, durable, fixable, recyclable and as low impact as possible - and arguably relatively low performance. The fact we are so far away form that point is why the industry remains toxic. They should have started towards that more than a decade ago. If a tax nudges buyers away from excessive consumption and forces the manufacturers to steer away from needless luxury then I'm all for it.
£40 is definately a luxury car. List price of a Dacia Sandero is about a third of that. Looking at what you can get for £40k,
- Base spec tesla model 3
- Hyundai Ioniq 5
- A posh spec long wheelbase caddy life with the biggest engine, autobox and a couple of grand of extras.
Hell, you can get a focus for under £30k that comes with luxuries like adaptive cruise control!
I think it is a bit like bikes; manufacturers have made their products better and more complex and sold consumers the idea that they still need products with the same brand name. So yes, the base spec passat is almost £40k, but it is a far more luxurious and complex car than the passat I had 20 years ago. That certainly didn't have luxuries like autodimming headlights, a satnav with integrated ChatGPT or an electric tailgate! I'm not sure that even included air con as standard in base spec.
So the tax doesn't include everything, but it is a simple tax which makes it cheap to adminster and hard to game.
Great points from endoverend and minus. Cars are massively over complicated and the makers push these cars onto us. There's no need for constantly bringing out new models and making all the parts incompatible with previous models or even other brands or stuffing them full of unnecessary tech or luxury. If you want that then you can have it but expect to be taxed on that luxury.
This tax seems like one of the fairest. Only applies to those with high amounts of disposable income and is very easily avoided by personal choice.
Also many £20k used cars that were £40k new can have a year or two of this left to pay. Those aren't luxuries.
Worst case is something that with an inflated list price, sold new with heavy discount. And or with some expensive options that bumped up the list but arent worth much second hand.
So firstly i’ll say I can’t afford a new car costing 40k. But I recently bought one second hand for under 30k
just be thankful you’re too poor to be able to afford a 2nd home, then you’d really have something to humblebrag about 🙂
Whereas to people living in the real world it’s a bloody fortune
10k is alot of money. But it's not an expensive car. No more than 100k is an expensive house. Just because millions of folks can't afford it doesn't change that fact. And noone outside of argumentative knobers on stw would try to argue that a 10k car is expensive in the context of buying a car.
It didn’t stop you buying it, so are you just moaning?
No it dodnt stop me because I really wanted the car, it was a good deal, its exactly what I wanted. So I chose to pay this arbitrary tax. There are plenty of things I buy or pay for that I think are a rip off, but I buy them anyway as I want to enjoy life. Doesn't mean I think it's a fairly thought out tax however, or I can't complain on here about it!
Other than the usual 'boo sucks to be you' arguments, aside from the point about capturing tax dodgers, I'm yet to hear a decent argument for why I should pay the same addition tax penalty on a 2nd hand car costing less than 30k as someone that pays 10 times that much for one brand new. Or why it's fair that if I buy a car brand new for 39999 I don't pay the charge, but if I buy one second hand for half that I possibly might?
The tax is (should be) reflected in the price.
I know about 5 people who ve bought a new dacia duster, c20k, does everything needed. Its only the badge snobs who dont like them. Car mags rave about them. 1 even bought the pov spec one and bought the body kit online, you can t tell the difference.
The £40K tax point is now hitting a lot of pretty normal cars (e.g. VW Passat)
Passat is a luxury car, look what segment it is aimed at. The golf is the more normal one.
A decent spec A4 or 3 series
Pretty normal A4 estate
Also luxury cars
Mini Countryman PHEV
Guess what....... See a theme here
EVs subject to the same rules starting next year isn’t it?
About time, they should never have been exempt in the first place. Still luxury aren't they.
Don't get me started on whether SUVs should attract more tax!
well....the carbon cost embedded through its production exists throughout its lifecycle whether you buy it first or second. Like most taxes, its a clumsy way to do it- and as a society were still a long way from a better way of assigning cost relative to consumption.
Passats, Audi rep mobiles and Minis aren’t luxury cars
I have to agree. And up until this point in my life I'd never spent more than 10k on a car, and never once in the past have I thought that either
But tbf the tax isn't a 'Luxury car tax', it's an 'expensive car tax'. Is 40k expensive for a passat..I'd say very much so!
I'm not particularly against a tax on expensive cars. But I think it should be a tax percentage of the cars value at time of purchase, and should apply to ALL cars. More you can afford to spend the more you pay. Would be fairer imo
I think it should be a tax percentage of the cars value at time of purchase, and should apply to ALL cars. More you can afford to spend the more you pay. Would be fairer imo
There's already a flat rate tax on cars - VAT. Increasing the tax on ALL cars would adversely affect those with smaller budgets. Basically works the same way as income tax bands.
Got one thanks, they absolutely are luxury vehicles. Passat is aimed at executive purchasers and Audi don't make anything not aimed at the upper end in the relevant target segment, even the A1. Minis are sold at a premium over similar vehicles because they are different or cool.
Cost is a good way of defining a luxury. None of the above do anything better than lower cost options but they cost more because they are perceived as better, have more luxuries or are built more luxuriously.
When I was looking earlier in the year pretty sure you could get a base Passat under 40k.
I’m not particularly against a tax on expensive cars. But I think it should be a tax percentage of the cars value at time of purchase, and should apply to ALL cars. More you can afford to spend the more you pay. Would be fairer imo
Sounds better than the current scheme.
FWIW I think all cars are too cheap. We need less cars on the road and should be encouraging getting longer life out of each and every one. I also think a lot of vehicles have become bloated and over powerful and that these should be penalised to encourage more use of appropriately sized lighter more efficient vehicles. Sadly these are minority views.
I’m currently looking for a second hand EV in the 15-18k price bracket which could easily fall foul of this and I didn’t realise.
Evs are currently exempt from this, so whatever ev you buy now (second hand or new) will not have the luxury tax applied, but Evs (new or second hand) registered from a date I can't remember but some point in 2025 will be subject to it like any other car.
So go ahead and get whatever second hand ev you want (as long as it wasnt registered after the date in 2025) , you don't need to worry about the luxury tax.
As above it doesn't apply to ev's registered before 2025
It does apply to hybrids however
Just on the survey point.... Why would 800 people lie on an anonymous survey on an MTB site about their income. I would bet it's fairly representative. Mtbing is middle class sport - of all the people I'm acquainted with through MTB (maybe 40-50) pretty much all are higher rate tax payers.
40k is not a luxury car in my view these days. Sure it's not a budget car. I think this is another example of people having not realising things have changed since their 20s. See people's understanding of the number of people in extreme poverty, not realising how much richer china and India are since even the start of the century etc.
but I guess that’s why my neighbour sold his rolls, range rover & Audi S5 & replace them with a solitary Tesla, so the tax must be doing some good.
Someone who can afford a Rolls, Range and Audi S5 surely isn't that bothered about a couple of grand a year in rfl?
As above it doesn’t apply to ev’s registered before 2025
Didn't know that - probably should have given it some thought!
*thumbs up thingy*
In a Simpsons point and laugh manner, ha ha – my perfectly adequate diesel Volvo is zero tax
Yeah.. But you have a diesel volvo, so ultimately the jokes very much on you..;-)
Says the man who’s got a Seat… ?
Technically it's a 310 bhp cupra with a 0-60 time of sub 5 seconds. So my comment stands..
Although when I'm feeling playful ill take the Porsche..(that ironically is far cheaper to tax!!)
😉
Also luxury cars
When new, maybe/yes. As I mentioned though, mine was almost 3 when I picked it up. Alternatively I could’ve gone to Ford/Skoda, ordered a brand new Focus/Octavia with likely more trinkets than the A4 but not had to pay the extra tax. That doesn’t seem like a well implemented tax regime to me
My £4k z4 has 231 bhp and not had many bolted as it pulls so good in every gear lots of torque and no need for a radio with the induction sound
£40,000 car must take some salary, business owner employing maybe 5 or most likely loads of tick. Lives in spam valley, shops in Aldi.
By this point in time every car in production should be simple, durable, fixable, recyclable and as low impact as possible – and arguably relatively low performance. The fact we are so far away form that point is why the industry remains toxic.
A Trabant for everyone it is....
Evs are currently exempt from this,
I didn’t realise that, it’s good to know when such shit cars as the ID3 (Golf) are £40k +