“Showroom Tax” could hit van drivers hard

A new tax came into effect on 1 April 2010 which could leave those looking to purchase a new van out of pocket. The so-called “showroom tax” is a one off payment, made in the first year of ownership, which the government hopes will encourage people to purchase vehicles with lower carbon dioxide emissions. The tax will take the form of an increase in Vehicle Excise Duty, which is more commonly known as road tax.

Those who buy a new vehicle with emissions of over 166g/km will be required by law to pay a tax on these emissions. The tax starts at £70, but vehicle owners could be expected to pay as much as £515, for vehicles with the highest carbon dioxide emissions (over 255g/km). When the “showroom tax“ of £515 is added to road tax, which was £435, a van owner could now be paying as much as £950 in Vehicle Excise Duty. When this is compared to the £405 that the buyer would have paid in Vehicle Excise Duty before 31 March, the dramatic rise in the cost of owning a car or van in 2010 is made clear.

With the cost of owning a van increasing so considerably, van owners are advised to ensure that they are paying the lowest possible price for other items, such as their van insurance. Van Compare can help save money. As a team of dedicated van insurance experts, they can work on your behalf, comparing van insurance quotes from leading UK van insurers, to find you the cheapest cover and help you lower the costs of running a van.