**Drivers 2007-2021: Martin Lewis's Urgent Advice**

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Post on Nov 13, 2024

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Drivers 2007-2021: Martin Lewis's Urgent Advice on Car Tax

For drivers across the UK, car tax can be a confusing and often overlooked expense. But with changes implemented in 2017 and 2021, it's more important than ever to understand how it works and how to save money. Martin Lewis, the Money Saving Expert, has consistently provided crucial guidance on this topic, and his advice remains relevant even today. This article will delve into key points from Martin Lewis's advice, helping you understand the current car tax landscape and potentially save hundreds of pounds.

Key Changes in Car Tax: 2007-2021

Before 2017, car tax was based solely on the car's engine size. This meant older, less efficient vehicles were often penalized with higher taxes. However, the UK government implemented a new system, focusing on CO2 emissions, to encourage drivers towards cleaner vehicles.

In 2017, a new VED (Vehicle Excise Duty) system was introduced. This system uses CO2 emissions to determine your annual tax rate.

In 2021, another change was implemented, specifically affecting the first year of tax. The first year's tax was previously calculated based on CO2 emissions. However, the 2021 change introduced a new system based on list price, which is the car's recommended retail price at the time of purchase.

Martin Lewis's Key Advice

1. Understand Your Car's CO2 Emissions: Martin Lewis emphasizes the importance of knowing your car's CO2 emissions. This information is crucial for determining your annual tax rate. You can find this information on your V5C vehicle registration document or on the DVLA website.

2. First Year Tax: Price Matters Now: The 2021 changes mean that the first year's tax is calculated based on the list price of your car. This means that more expensive vehicles will face higher taxes in the first year. Martin Lewis advises comparing list prices for different models to ensure you are getting the best value for money.

3. Car Tax Bands: The VED system categorizes vehicles into various bands based on their CO2 emissions. Martin Lewis encourages drivers to research the specific band their car falls into and understand the associated tax rates. This allows you to compare different vehicles and their tax obligations.

4. Alternative Fuels: Martin Lewis is a strong advocate for environmentally friendly vehicles. He encourages drivers to consider alternatives like electric cars and hybrid vehicles, which often qualify for reduced or even zero car tax rates.

5. Tax Discounts for Low Emission Vehicles: The government offers tax discounts for low-emission vehicles. Martin Lewis highlights the availability of these discounts and encourages drivers to explore options like electric cars, which can save you a significant amount of money in the long run.

6. Stay Updated on Changes: The car tax landscape is constantly evolving. Martin Lewis emphasizes the need to stay informed about the latest changes and regulations. You can find updated information on the government's website and through various online resources.

Conclusion

Understanding car tax is essential for responsible car ownership. By following Martin Lewis's advice, you can make informed decisions, potentially save money on your car tax, and choose vehicles that align with your financial and environmental priorities. Remember to stay updated on any future changes and explore alternative fuel options for a more sustainable approach to driving.