Navigating Changes in Electric Vehicle Road Tax and Expenses: What You Need to Know.
In the ever-evolving landscape of electric vehicles (EVs), the UK Government has recently introduced significant changes to road taxation and expensive car supplement exclusion arrangements. In this post, we'll break down these modifications and explore how they might impact your electric vehicle quotes and leases.
Changes in Electric Vehicle Road Tax and Expensive Car Supplement.
In the Autumn 2022 budget, the government confirmed adjustments to the Vehicle Excise Duty (VED) for electric vehicles. Effective for all electric cars and vans registered on or after April 1, 2017, the first-year rate will be a minimal £10. Subsequently, the standard road tax rates of £180 per year for cars and £320 for light commercial vehicles will apply from the second year onward.
Additionally, starting April 1, 2025, the expensive car supplement will be applicable to EVs with a list price exceeding £40,000 at first registration. This translates to an additional annual fee of £390 for five years from the second license year to the sixth year of leasing.
Impact on new electric vehicle rental quotes: From March 2024, new electric vehicle quotes will incorporate the standard road tax rate, potentially increasing costs by approximately £10 a month for a 3-year contract and £11.30 a month for a 4-year contract. For EVs with a list price exceeding £40,000, the expensive car supplement will also be factored into quotes from early 2025, adding an estimated £21.90 per month for a 3-year contract and £24.80 per month for a 4-year contract on top of the standard EV road tax.
Leased electric vehicles: What to Expect.
For current leased electric vehicles, effective April 1, 2025, if road tax is not included in the lease rate, your funder will invoice you separately on the anniversary of the vehicle's registration at the applicable rate. In cases where road tax is part of the lease, additional invoices will only cover government-mandated increases. Importantly, the expensive car supplement won't affect EVs registered before April 1, 2025. For those with vehicles on order that may be impacted, Every Vehicle Lease will be in touch closer to the implementation date in 2025.
Conclusion.
As the landscape of EV regulations shifts, staying informed about road tax and expensive car supplement changes is crucial. These adjustments may impact your budgeting and leasing decisions, making it essential to factor them into your considerations as you explore the world of electric vehicles in the coming years.
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