UK introduces new road tax bands...

[TStag]

The UK has introduced new tax bands for cars which will see road tax bills soar on some cars made after 2001. Essentially some small/ green cars will be tax exempt, but something like a 1.6 Ford Fiesta will get taxed about £200 a year ($400), a Mondeo 2.5 £415 ($830) per annum and a Range Rover £900 ($1800) in year one and then about £450 per annum the year after.

 

Winners:

 

- Diesel cars

- Small cars with smaller engines (e.g 1.2)

- Premium SUV makers (they've got off lightly for 3 years at least)

- Premium car makers generally (again could have been worse)

 

Loosers:

 

- Anyone who makes a non premium SUV or People carrier (these buyers will probably look to downsize) - Ssangyong for example just went bust in the UK because they make mainly cheap gas guzzlers

- Anyone who bought a Ford Mondeo sized car with a 2.0 litre engine or bigger

 

To sum up. Probably not bad or good for Ford. Ford S max, Galaxy, and larger engined models are going to get hammered. People who drive these cars will generally down size. Land Rover drivers won't care, most Freelanders are Diesels and will escape the worst of the tax. Mean while Range Rover drivers earn on average 180,000 dollars a year so probably don't care that much anyway. Jaguar won't loose but won't gain from SUV makers loosing sales to them. Volvo, net loosers most of their cars not premium enough and will get hit by the new tax bands. Mazda = winner.

 

The BBC has some more info if your interested but that about sums it all up.

[BORG]

Good thing Ford is dumping Land Rover and Jaguar, although Jaguar and Land Rover fall into the category of stable wealth rather than the volatile 'upper middle' wealth.

[TStag]

Good thing Ford is dumping Land Rover and Jaguar, although Jaguar and Land Rover fall into the category of stable wealth rather than the volatile 'upper middle' wealth.

 

It's the cars that the middle wealth people drive that will get hit the hardest. I think it pretty much kills the 2.5 Litre petrol in Britain, so "Mondeo Man" will either down size to a focus or get a measley 1.6. I think MPV's will take a big hit. In all honesty the likes of BMW, Mercedes, Audi, Porsche, JLR and co are probably popping the champagne corks. Whilst VW bosses will be looking for cliffs to jump off. I mean who's going to buy a Golf GTI now?

[Edstock]

Turbo-diesels. Subaru is coming to the UK with a WRX turbo-diesel. It's a flat-4.

[jpd80]

It's the cars that the middle wealth people drive that will get hit the hardest. I think it pretty much kills the 2.5 Litre petrol in Britain, so "Mondeo Man" will either down size to a focus or get a measley 1.6. I think MPV's will take a big hit. In all honesty the likes of BMW, Mercedes, Audi, Porsche, JLR and co are probably popping the champagne corks. Whilst VW bosses will be looking for cliffs to jump off. I mean who's going to buy a Golf GTI now?

It's pretty obvious the whole point is raising tax, not changing people's buying habits.

Like any other tax, people will just keep paying.

[TStag]

Turbo-diesels. Subaru is coming to the UK with a WRX turbo-diesel. It's a flat-4.

 

Yep, we are going Diesel crazy over here now. Mark my words the USA will begin adopting Diesels soon too. The Germans are already planning a massive Diesel offensive in the US.

[Ford Jellymoulds]

It's the cars that the middle wealth people drive that will get hit the hardest. I think it pretty much kills the 2.5 Litre petrol in Britain, so "Mondeo Man" will either down size to a focus or get a measley 1.6. I think MPV's will take a big hit. In all honesty the likes of BMW, Mercedes, Audi, Porsche, JLR and co are probably popping the champagne corks. Whilst VW bosses will be looking for cliffs to jump off. I mean who's going to buy a Golf GTI now?

 

I think you might be wrong T-Stag the new Mondeo's all come in below the 225 g/km C02 band. The 2.5 Litre are 222 g/km C02

http://www.whatcar.co.uk/car-comparison.as...5&ED3=52867

Edited March 14, 2008 by Ford Jellymoulds

[silvrsvt]

Yep, we are going Diesel crazy over here now. Mark my words the USA will begin adopting Diesels soon too. The Germans are already planning a massive Diesel offensive in the US.

 

The biggest problem is that Luxury cars buyers dont care about spending 10% on a diesel engine, where as that same engine would add 20-25% to a normal priced car.

 

Then lets not forget that Diesel is at least .50-dollar more a gallon then Regular unleaded in the States, where are you going to see any savings? Your typical car buyer who replaces his car every 5-7 years (less for those luxury buyers who are better off leasing anyways) isn't going to see any savings when driving the avg amount of miles...

[Ford Jellymoulds]

The UK has introduced new tax bands for cars which will see road tax bills soar on some cars made after 2001. Essentially some small/ green cars will be tax exempt, but something like a 1.6 Ford Fiesta will get taxed about £200 a year ($400), a Mondeo 2.5 £415 ($830) per annum and a Range Rover £900 ($1800) in year one and then about £450 per annum the year after.

 

Winners:

 

- Diesel cars

- Small cars with smaller engines (e.g 1.2)

- Premium SUV makers (they've got off lightly for 3 years at least)

- Premium car makers generally (again could have been worse)

 

Loosers:

 

- Anyone who makes a non premium SUV or People carrier (these buyers will probably look to downsize) - Ssangyong for example just went bust in the UK because they make mainly cheap gas guzzlers

- Anyone who bought a Ford Mondeo sized car with a 2.0 litre engine or bigger

 

To sum up. Probably not bad or good for Ford. Ford S max, Galaxy, and larger engined models are going to get hammered. People who drive these cars will generally down size. Land Rover drivers won't care, most Freelanders are Diesels and will escape the worst of the tax. Mean while Range Rover drivers earn on average 180,000 dollars a year so probably don't care that much anyway. Jaguar won't loose but won't gain from SUV makers loosing sales to them. Volvo, net loosers most of their cars not premium enough and will get hit by the new tax bands. Mazda = winner.

 

The BBC has some more info if your interested but that about sums it all up.

 

Mondeo's with the biggest 2.5 engine showroom tax will drop to £310 in the second year. Most of the Mondeo's that get sold are those with smaller engines that are £180.

 

Ford will be bring out it's Econetic Mondeo range which won't pay any Showroom Tax, the Econetic Mondeo buyer won't have to pay the current 17.5% VAT because of its low Co2, and would be in the lower band for congestion charging in London as well

http://media.ford.com/Article_Display.Cfm?Article_Id=26803

 

SHOWROOM TAX

http://news.bbc.co.uk/1/hi/business/7292110.stm

Edited March 14, 2008 by Ford Jellymoulds

[01FOCI]

Wow talk about class warfare, the wealthy get off, the poor get off and the hard working middle class get the proverbial shaft and will be forced to drive the shi*box their welfare leach cousin drives. suppose we they could always take the shaft err tube I mean or those sweet double decker busses. Do they give out umbrellas on the bus?

[Roadrunner]

Wow talk about class warfare, the wealthy get off, the poor get off and the hard working middle class get the proverbial shaft and will be forced to drive the shi*box their welfare leach cousin drives. ...

 

Regarding the UK: yes and no.

 

What does the average middleclass person drive? A larger saloon like a Mondeo, or a smaller car like a Polo? Anybody?

 

Also, do the wealthy really get off? How so?

[pms jones]

Well to day as i was driving around cambridge i saw a ford escape hybrid with dealer plates on. so could this be some testing for a future car for europe

[lfeg]

Yep, we are going Diesel crazy over here now. Mark my words the USA will begin adopting Diesels soon too. The Germans are already planning a massive Diesel offensive in the US.

 

More "one size fits all" thinking. Get over it, the US is not the same market as the UK or the EC. Diesel is not the be all /end all. It has its place. In some applications gasoline engines already give equivalent cost per mile travelled when you look at all costs involved. The Germans are not infallible - I work with them every day. They only have a small part of the market, and the German cars (as well as just about all european cars) are priced significantly above the median price. Even with the current rate of fuel price inflation my cost per mile (180K to 230K miles in 10 years - my typical replacement interval) would be less with a gas Hyundai than a diesel Mercedes.

[Ford Jellymoulds]

Regarding the UK: yes and no.

 

What does the average middleclass person drive? A larger saloon like a Mondeo, or a smaller car like a Polo? Anybody?

 

Also, do the wealthy really get off? How so?

 

Middle class folk normally buy the new Ford Focus, VW Golf all things German, with a small scattering of French eco boxes, the new showroom tax will hit the the Upper class the most in general Aston Martin, Jaguar & Land Rover buyers will be hit the hardest, companies may give big engined cars like the Mondeo 2.5, Mercs & Beemers the big elbow to save money and downsize in the economic downturn we are now in, it will also give the company a green image at the same time saving the expense to the company.

Edited March 14, 2008 by Ford Jellymoulds

[old_fairmont_wagon]

The average premium for Diesel over regular unleaded on the way into work this morning (among 7 stations that I passed that advertise diesel for sale was around 22% (roughly 70 cents more per gallon with unleaded running 3.11-3.19/gal). A diesel will have to get at least 22-25% better mpg to cover JUST THE COST PREMIUM for diesel fuel. To recoup the cost of the upgrade, it will have to cover at least $2000 or so (does not include financing expenses on the premium) over the life of the vehicle (for most new car buyers, this is 5 years, less for leasers). This is $400 per year. Assuming that an average vehicle sees 10,000 miles per year, that means it has to save about 4 cents per mile in fuel costs over and above the difference in cost per gallon in the form of better mpg. To give an example, assume a vehicle made 20mpg on a benchmark gasoline engine. It would need to make 25mpg on a roughly equivalent diesel engine (bit more torque, bit less hp) to cover the difference in prive per gallon. To recover the cost of that amortized $400 a year, the vehicle would need to achieve 33mpg (assuming 3.75 per gallon diesel). That's just breaking even. The percentage amount stays similar as you play with the mpg of the base vehicle. That means that, with diesel fuel costing around 22% more per gallon than regular fuel, and the premium for a diesel vehicle over an equivalent gasoline vehicle, excluding the increased maintenance costs of the diesel engine, a Diesel car has to achieve roughly 70-75% better mpg on the combined cycle than its equivalent gasoline counterpart JUST TO BREAK EVEN for a 5 year ownership scenario.

 

That one thing, right there, will keep a lot of people away from them.

 

Lets look at what some examples would have to look like... (numbers from www.fueleconomy.gov) ATs

Camry 4 cylinder, combined cycle is around 25 mpg, diesel would break even at 43.25 mpg (hybrid achieves 34)

Ford focus 4 cylinder, combined at 28, diesel needs 48.44 mpg

Ford Taurus AWD , 19, needs 32.87 mpg

Honda Civic 29, needs 50.17 (hybrid achieves 42)

 

It looks like the only advantage that diesels will have to speak of will be highway mpg. If you do a LOT of highway driving, then a diesel may make sense. Otherwise, a hybrid will be a much better buy.