Motorists driving some family cars are in for a shock – their wallets are about to get hit with higher bills. Come April 2025, new tax changes will mean drivers of certain vehicles will have to cough up an extra £600.
And it’s going to impact electric vehicles too, despite the Labour government dangling the carrot of lower bills for some eco-friendly rides. Owners of hybrid vehicles could be looking at shelling out an additional £135 to £327 in tax depending on their model.
Meanwhile those who’ve splashed out on battery electric vehicles (BEVs) will see a modest increase of just £10, according to the Vehicle Excise Duty (VED) bands. But from April onwards, electric car owners with motors valued over £40,000 will also need to start paying the ‘Expensive Car Supplement’ rate.
So what’s the deal? The RAC has flagged that the current exemption from the Expensive Car Supplement for electric vehicles is set to vanish in 2025.
This means any new zero-emission cars registered from 1 April 2025 will be on the hook for the Expensive Car Supplement (ECS), reports Lancs Live. Right now, the ECS hits cars with a list price over £40,000 for five years at a hefty £410 annually.
According to the RAC, this change could see EV drivers with a pricier set of wheels forking out up to £600 a year in road tax. That’s a sting that might just deter potential buyers.
(Image: Getty)
Auto Trader’s editorial director, Erin Baker, weighed in to say: “While the ECS hasn’t significantly affected petrol or diesel car sales, the landscape may change for electric vehicles. With two-thirds of EVs costing more than £40,000, the additional road tax could make them less appealing.
“However, leasing offers a practical solution. The ECS is automatically incorporated into the monthly payments, making it simpler for drivers to manage the added costs.”
The car models that could be hit by Vehicle Excise Duty
Family EV models that are set for the extra car tax charges include:
- The £62,775 Kia EV9
- the £59,035 Volkswagen ID Buzz
- the £43,325 Kia EV6
- the £60,178 BMW iX
- the £61,016 BMW i5
- the £46,990 Tesla Model Y
- the £49,295 Volkswagen ID3
- and the £42,445 Kia Nero EV
Tom Banks, a car insurance expert at Go.Compare, has offered guidance in light of the increased Vehicle Excise Duty (VED) rates set for 2025. He said: “The increased VED rates mean most new car buyers will be paying a lot more than they were expecting in 2025, but there are ways you can minimise the impact this will have on your finances. For instance, consider purchasing a low-emissions car that will place your vehicle in the cheaper tax bands.”
He added: “If you can’t purchase a suitable hybrid or EV, consider opting for a nearly new vehicle instead. This gives you that new car feeling for a fraction of the price, and will allow you to dodge the increased tax.”
And he suggested that drivers seek additional ways to slash their expenses, remarking: “Otherwise, see if there are any other ways you can reduce your motoring spending to makeup for the increased tax costs. For example, comparing car insurance policies might allow you to find a provider that offers the same level of cover for a lower price, and driving in a way that minimises your fuel usage could help to reduce costs further.”