It’s all very well the government saying that they might let owners of older cars have some kind of temporary respite from the new ‘yet another tax increase’ but Motor Trade Insider asks;
A) Who is going to buy these cars?
B) How much are they going to lose?
It seems to me judging by the hysteria in the business at present that these cars which could attract high taxes i.e., big c02 emitters will be totally worthless if the trend continues. As usual the glib attitude of this government toward taxation will hurt the lower end of the market most, because let’s face it people who buy new or nearly new big engine performance gas guzzlers aren’t going to be worried about £400 annual car tax when the car they have costs upwards of £25,000 in the first place, because presumably they have enough money to absorb these costs anyway.
Let’s take a recent example that I saw at auction; a Jaguar X-Type Spirit 2.5 manual with a fairly good trim level and sensible miles for the age (04 plate). Now this car was probably around £25,000 brand new. A year ago the car, whilst not being the most popular in the Jaguar range but still having the benefit of a good reputation and an apparitional car for a lot of people, would probably have been bought for circa £11,000. I saw it make £4,000 at auction meaning that someone got a cheap car or a dealer bought it for a gamble and will mark it up at £5,995, either way that is well over 50% depreciation on a car that you would have thought would do most of its ‘losing money’ over the first 3 years.
So let’s say that was your car and the new tax for next year was £430 you paid £11,000 for it and you just let it go for £4,000 (36% of its purchased value in a year) presumably for something with a smaller engine size and with better emissions (which you would probably have paid a premium to own). Now taking fuel, insurance and road fund costs into consideration how much better do you feel? Not much because selling the Jag just cost you £580 per month in depreciation alone, so are you going to make that up by paying less tax on a smaller car, I don’t think so.
The government has made a serious error in that instead of saving money for the older car driver they will be seriously disadvantaged, unless The Chancellor is going to subsidize it in order to protect you from the ravages of depreciation!