In the 2015 budget the then Chancellor of the Exchequer announced that in 2017 the way in which our cars first vehicle license is calculated will be based on its CO2 emissions.

What does this mean for you?

Simply that the majority of vehicles will move to a standard rate of road tax which will be £140 annually from the second licence. Any car with zero emissions will not pay the standard rate of car tax but, if a cars list price is over £40,000 at its first registration, the customer will pay the additional rate for five years after the end of its first licence.

Every car is affected by this change and not just the cars with a price tag of over £40,000.

So, what does this mean to your pocket?

Quite simply, if you purchase a new car before the 1st April 2017 and the CO2 Emissions are between 151 and 165 [based on current Petrol and Diesel Emissions] then the current rate of Road Tax [VED] would be £185.

If however you purchase the same car after the first of April with the CO2 Emissions based on the above table so between 151 to 170 then you will pay £500 – an increase of £315.​

So who will win and who will lose?

The changes have been designed to earn the exchequer more money from the more popular eco-friendly cars.

The new changes will mean a car that is CO2 rated at 100g/km or lower – and currently free from paying road tax for life under the current system – will cost you £400 over three years, £680 over 5 years, or a whopping £1,380 over ten years.

So, if you can buy the same car before the D-day 1st April, you’d be bonkers not to.

For more information about the change in Vehicle Road Tax, read more at Vehicle Road Tax is Changing.