Press Release: Budget could price car buyers out

March 18, 2010

Budget could price car buyers out

New Year price increases, the return of the 17.5 per cent VAT… since the start of the year new cars have become increasingly expensive to the consumer. Add this to the close of the Scrappage Scheme just a month after the new ‘10’ plate is introduced plus the arrival of new Showroom taxes and April could prove a ‘perfect storm’ for new car sales.

As the new registration plate came out on March 1, buyers have less than a month to buy a new model before the new showroom taxes are introduced and the Scrappage incentive is whipped away.

The new car tax rules to be introduced on April 1 2010, mean that new cars emitting over 166g/km will pay a higher first year rate of tax than cars that are already registered. Depending on its exact CO2 emissions of the new car, the cost of the extra VED could be more than double the normal rate, up to £950.00 for a Band M (emissions over 255g/km C02) car, compared to the regular rate of £435.

This means that for anyone likely to buy a more ‘polluting’ vehicle, the costs are set to rocket. While it might seem reasonable to tax polluting vehicles more, the point at which the showroom taxes exceeds the regular rate is set so low, that many family cars will be affected.

For example, the popular Vauxhall Zafira 1.8i with emissions of 177g/km will pay £300 VED for the first year compared to £200 regular rate.

Or the Ford S-Max Edge 2.0i with emissions of 194g/km will pay £425.00 compared to £235 regular rate.

And as if that isn’t enough, petrol prices are approaching record highs even before the proposed April 3p increase in fuel duty is added. As the Budget is due out next week, new and nearly car deals website, SaveMoneyOnCars.co.uk is calling on the Chancellor to bear in mind the catastrophic effect a sudden collapse in the new car market will have on the fragile UK economy.

With rumours that a further VAT increase could be announced as part of Wednesday’s Budget, the website hopes that Mr Darling will not expect the UK car industry to unfairly shoulder more than its share of taxation increases.

“Many factories are only just returning to full production after reducing capacity last year,” explains the website’s spokesperson Richard Lawton.

“British consumers are pushed to their limits- they simply cannot afford to deal with five major factors all pushing up the cost of motoring- VAT, the end of scrappage, new showroom taxes and road tax reforms, a fuel duty increase and a weak British pound. Quite simply something has to give, or else the market will.

“We are calling on Mr Darling to defer the fuel duty increases and scrap the showroom taxes, road tax already reflects CO2 emissions, these additional first year VED rates will only serve to turn car buyers away from the showrooms,” he warns.
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Notes to Editors:

About SaveMoneyOnCars.co.uk: Independently verified by Experian HITWISE as one of the top five busiest sites for new and nearly new car offers in the UK. Re-launched in February 2010, the website features thousands of car deals updated daily from a huge range advertisers, including many well-known car supermarkets, main dealers, independent dealerships and brokers across the UK. With 400,000 users a month and 1.5 million page views a month, it is widely recognised as one of the biggest drivers of visitors to websites in the automotive retail sector.

SaveMoneyOnCars.co.uk is owned and maintained by Really Good Domains Ltd, who runs more motoring websites than any other company in the UK. As the UK’s largest internet advertising and marketing company for the motor industry, Really Good Domains also run the popular websites ContractHireAndLeasing.com, TheVanWebsite.co.uk, RoadTestReports.co.uk, CarSupermarkets.co.uk and FleetDirectory.co.uk to name a few. For more information please visit www.ReallyGoodDomains.com or call 0161 482 7650.

Contact: Faye Sunderland, fayes@reallygooddomains.com. Really Good Domains, Domain House, 4 Watchgate, Newby Road, Hazel Grove, Stockport, SK7 5DB.

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