Emissions testing changes push up running costs by £1,000 a year

Friday, 24th April 2020, 12:00 pm
Updated Friday, 24th April 2020, 12:00 pm

Changes to vehicle emissions testing and vehicle tax rates could add as much as £1,000 to the annual running costs of a car, according to new analysis.

Since the start of April, all new cars must be emissions tested under the WLTP cycle - a more realistic and stringent test than the previous NEDC method. As a result, their official CO2 emissions figures have increased by an average of almost 20 per cent.

This has a knock-on effect on how they are taxed in the UK, moving most cars into a higher VED (car tax) bracket and increasing how much benefit in kind (BIK) tax company car drivers pay.

According to analysis by vehicle data specialists cap hpi, the average CO2 emissions figure has risen by 19.7 per cent - from 135g/km under NEDC testing to 161g/km under WLTP, with petrol, diesel and hybrid cars affected.

The MPV sector saw the biggest change, with an average emissions increase of 33 per cent, followed by large executive - 30 per cent - and SUV - 29 per cent. The smallest percentage increase was seen in the supercar sector at just eight per cent.

Tax increases

With both VED and BIK based on a car’s CO2 emissions, the new figures mean most cars have moved up at least one tax bracket. Cap hpi has calculated that the changes mean an average VED increase of £300 and a BIK increase of £714 a year.

The most significant increases in BIK were seen in the MPV sector at 3.5 per cent, upper-medium models - 3.3 per cent - and supermini - 3.2 per cent. Luxury executive and supercars saw no increases.

Read More

Read More
The best tax-free used cars

Large executive vehicles were hardest hit on VED, with an average jump of £546, followed by executive - £459 - and MPV - £455. City cars and supercars saw the smallest increases with £52 and £40, respectively.

Diesels continued to be more heavily taxed than petrol, with an average increase across all diesels of £423 compared with a £232 rise for petrols.

Driving a change in buying habits

Commenting on the findings, Jonathan Clay, head of vehicle identification at cap hpi said: “The combination of the introduction of WLTP and a new tax regime aimed at encouraging private drivers and fleets to make greener motoring choices has driven up costs across the board. But it’s also clear that some sectors are more affected than others, which will undoubtedly drive a change in the shape of the UK car parc.”

In contrast to most petrol, diesel and hybrid models, electric cars ownership has actually become cheaper thanks to recent changes that make them eligible for a zero per cent BIK rate. According to cap hpi’s data BIK savings on the Porsche Taycan amount to more than £16,000, with an £8,000 reduction on the Tesla Model 3. The Kia e-Niro, Hyundai Kona Electric and Nissan Leaf all saw savings of around £6,000.