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Save on your car costs

Save on your car costs


For the majority of people, car costs are an unavoidable part of everyday life.

From motor insurance to road tax and MOT costs, not to mention garage fees, keeping four wheels on the road is a considerable financial burden.

Just to add to the misery, the Government has, from the 1st of April 2017, changed the way Vehicle Excise Duty, (VED), known commonly as road tax, is charged. And it seems most drivers will be worse off.

What are the Vehicle Excise Changes?

The changes are fairly complicated, but a relatively straightforward summary is that anyone buying a brand new petrol or diesel car will pay a flat rate of £140 a year, while hybrid-owners will pay slightly less at £130.

Cars owned prior to April 1st will continue to be taxed under the old rates, which are dependent on emissions bandings, but which are tax-free for many more vehicles than the new system.

Pricier cars

From now on, those buying new cars costing over £40,000 will pay a surcharge of £310 on top of the £140; unless the car emits zero-emissions, then they just pay the £310.

New first-year rates

To complicate matters, additional tax payments are being introduced on new cars but only in their first year of ownership, depending on CO2 emissions. These range from £10 to £2,000, and are payable on top of the flat-rate.

After the first year, the tax drops to the flat-rate of either £140 or £130.

Are any cars tax-free under the new system?

Only those vehicles which are absolutely pollution free, basically electric or hydrogen vehicles, and which cost below £40,000 will be exempt from tax.

Will you be worse off?

Well-known consumer motoring site,, quotes research which shows the new rates will add more than £500 to the long-term running costs of some of Britain’s best-selling and eco-friendly models.

And the Daily Mirror newspaper claims the changes mean 7 out of 10 car owners will have to pay more.

So it looks like for the majority of drivers the answer is yes, you’ll pay more.

How to offset costs

Shopping around for your car cover, or using an insurance broker to do the leg work for you, is one way of offsetting any increase you many face from the new tax rules.

Recent research from Moneysupermarket showed that drivers could, on average, save over £200 a year by being savvier at renewal time.

At Policy Expert we say it’s well worth the little bit of effort as £200 should more than offset the cost of the new VED rules for most, so no excuses!


Policy Expert

If your home is your haven, you’ll want it to have the best protection. Compare quotes from our range of handpicked insurers and tailor a policy to suit you. For more information, you can call our experts on 0330 0600 600 or visit for more ways to reach us.


Published 4 May 2017