Urgent ‘rethink’ needed over UK car tax fees due to one concern

Experts are demanding an urgent “rethink” over 2025 car tax changes over fears motorists may be put off buying certain vehicles. Ian Plummer, Commercial Director of AutoTrader, stressed that the introduction of new Vehicle Excise Duty (VED) costs should be reconsidered.

Earlier this Spring, electric vehicles were subjected to VED car tax rates for the very first time after years of exemptions came to an end. As well as being forced to pay a £195 per year standard VED fee, more costly electric vehicles were also forced to splash out on expensive car supplement fees. This is an extra £425 per year charge slapped on vehicles over £40,000 in value for five years over a car’s early lifespan.

However, Ian has stressed that the fees could turn consumers away with sales figures already stuttering.

Ian said: “We urgently need to rethink the expensive car supplement and vehicle excise duty tax changes and to focus on public information campaigns to enable consumers to feel good about making the switch.

“With one in three new cars sold in the UK now having a plug, we know there’s consumer appetite for the new technologies now on offer.

“The issue has always been affordability and new electric models coming to market under £20,000 should help to close the gap between electric sales and transition targets.

“But this new analysis questions if that will be enough - there’s plenty for the industry and government to do now to set us up for success.”

According to the RAC, the new tax rules would have impacted hundreds of thousands of EV owners and their running costs.

Data from the new and used car marketplace at AutoTrader found that just 18% of new car enquiries are for EVs.

The survey found that affordability remains the biggest barrier to electric vehicle adoption.

According to the poll, a whopping 52% said they were concerned about the prices, with 78% intending to spend less than £20,000 on their next car.

AutoTrader stressed that there are now just 33 new EVs for sale for £30,000 and under, meaning there is a shortage of cheap electric models.

However, the survey found that just 7.6% expect to spend £30,000 or more on their next vehicles.