Important Information Regarding Vehicle Excise Duty

If you are considering purchasing a new vehicle in the near future, it’s important to know that first-year Vehicle Excise Duty (VED) rates will increase on 1st April 2025. Registering your vehicle by the 31st March 2025 will ensure that you pay first-year VED at the current rate.

Electric Vehicles (EVs)

For the first time, electric vehicles will no longer be exempt from road tax. The changes include:

·         First-Year Rate: Newly registered EVs will face a £10 VED charge in the first year.

·         Standard Rate: From the second year onwards, EVs will be taxed at the standard VED rate of £195 annually.

·         Expensive Car Supplement: EVs with a list price exceeding £40,000 will incur an additional £410 charge per year for five years, starting from the second                year of registration.

Hybrid Vehicles

Hybrid vehicles will also see changes in their taxation:

·         First-Year Rate: Hybrid vehicles will have a higher first-year VED, with specific rates determined by their emissions.

·         Standard Rate: From the second year, hybrid vehicles will be taxed at the standard rate of £195 per year.

Electric Vehicle Owners

The removal of VED exemptions means EV owners will need to budget for these additional costs. However, EVs still benefit from lower VED rates than many ICE vehicles, alongside savings in fuel costs and congestion charge exemptions.

Fleet Managers

Businesses managing vehicle fleets should anticipate higher operational expenses. Despite the increased tax, switching to EVs remains a cost-effective long-term strategy due to lower maintenance and fuel costs, as well as alignment with sustainability goals.

For Prospective Car Buyers

Buyers should now factor VED into their overall cost calculations. While EVs will face new taxes, they may still offer long-term financial and environmental advantages compared to petrol or diesel vehicles.

For more information speak to your local sales representative. Contact us to book an appointment at Market Rasen Land Rover on 01673 842101 or Boston Land Rover on 01205 722110.