Drivers can "save money" ahead of new Vehicle Excise Duty (VED) car tax changes set to launch across the UK in just months.

14:21, Sat, Dec 28, 2024 | UPDATED: 14:22, Sat, Dec 28, 2024

car tax changes

Drivers can save money ahead of car tax changes (Image: Getty)

Motorists can make sure they “save money in the long run” with three simple hacks before new car tax changes are introduced. 

Vehicle Excise Duty (VED) will undergo a major overhaul from next Spring with almost all owners set to pay more.

Petrol and diesel owners will be hit with standard rate rises and hikes in first-year charges with thousands added to some bills from April. 

Meanwhile, electric car owners will pay VED for the first time ever with Labour putting an end to exemptions. 

The hike in annual fees could be a serious blow to cash-strapped families with experts suggesting three simple solutions could cut down charges.

busy road

Switching cars could be the best way to save ahead of VED updates (Image: Getty)

Andy Wood, spokesperson for Tax Natives explained that switching vehicles or meeting up with a financial advisor could be the best options for those unsure what to do.

Andy explained: “Choosing a nearly new or low-emission car could help if you're worried about rising VED rates. 

“Cars in lower emissions bands come with lower tax costs, which could save you money in the long run. 

“It’s also a good idea to chat with a financial adviser or tax expert to see how you can manage these costs as part of your overall budget."  

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According to experts at Pete Barden, standard VED rates will rise in line with Retail Price Index (RPI) inflation from April.

The update means annual fees are expected to increase from £190 to £195 per year. 

The biggest rise comes from first-year VED rates which are set for a massive overhaul in 2025. 

Petrol cars emitting over 255g/km of CO2 will see their first-year VED rates double from £2,745 per year to £5,490. 

The same is said for models emitting between 226 and 255g/km of CO2 with fees up from £2,340 to £4,680. 

Electric car owners will pay £10 in the first-year before switching to the standard rate afterwards. 

There are also concerns that the expensive price tag of middle-market EVs means many more will be affected by Expensive Car Supplement (ECS) fees. 

This is an extra £410 charge applied over a five-year-period for models valued at over £40,000.