By Graham Conway, Managing Director at Select Car Leasing

From the 1st of April, the new VED road tax rates will come into effect.

For most petrol and diesel cars registered from 1 April 2017, the annual VED rate will rise to a standard cost of £200.

Graham Conway, Managing Director of Select Car Leasing, warns drivers to be aware of the changes – while reassuring motorists who lease their vehicle that VED costs are automatically included in their monthly payments for the entire duration of their contract.

He adds: “The leasing model takes the hassle out of VED payments, as you never need to worry about paying it annually, as it’s already factored into your agreement.”

The new standard tax rate of £200 per year applies to cars first registered on or after the 1st of April 2017.

However, there are a range of exceptions, including:

· Vehicle models producing less than 100g/km CO2, will see an increase between £5 and £15 for the year.
· Vehicle models producing between 150g/km to 254g/km will see an increase between £50 and £170 for the year.
· Vehicles producing over 255g/km will see an eye-watering increase of £200, from £5,490 to £5,690.

The Expensive Car Supplement is an additional charge on top of the standard VED for a range of high-value vehicles, including petrol and diesel cars priced at £40,000 and above.

From the 1st of April, this will rise from £425 to £440. This supplement is in addition to the standard rate and is applied for five years, starting from the second year of registration.

The supplement has also been applied to electric vehicles; however, it will only apply to EVs with a retail price of £50,000 and over from April 2026.

Select Car Leasing’s Mr Conway adds: “While VED costs are increasing for many, the threshold increase for EVs impacted by the Expensive Car Supplement is a welcome change.

“With fuel prices surging right now, an increasing number of motorists will be looking to make the move to an electric vehicle in order to swerve the fluctuating cost of petrol and diesel.

“The benefits of running an EV can be enormous – and our fuel cost calculator illustrates the potential savings.

“If you drive 10,000 miles a year, you can save around £1,000 when recharging an EV compared with fuelling a petrol or diesel car.

“That figure is based on you charging your EV at home on the standard 27.69p variable tariff. If you’re able to switch to a cheaper off-peak home electricity rate, the savings can be even larger – up to around £1,400 annually.

“With petrol and diesel prices likely to rise further in the coming days and weeks, electric vehicles might start to look even more appealing.”