2025 Vehicle Excise Duty (VED) Price Rise: What You Need to Know

How the 2025 VED changes affect Volkswagen buyers

Starting 1st April 2025 significant changes to Vehicle Excise Duty (VED) rates will impact all new car registrations across the UK, including Scotland. Below is a breakdown of the upcoming adjustments to road tax.

However, you can avoid this increase in vehicle tax, if you purchase and take delivery of your new Volkswagen before 1st April 2025, you will avoid the upcoming vehicle excise duty (VED) increase, which will see some rates double from 1st April.

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Electric Cars:

  • First year rate: £10 for all zero-emission vehicles.
  • Standard rate (second year onwards): £195 for the 2025 - 2026 tax year
  • Additional charge (expensive car supplement or luxury car tax): New electric and zero emission vehicles with a list price exceeding £40,000 will attract an additional charge of £425 annually from the second to the sixth year of registration

Petrol & Diesel Vehicles:

  • First year rates: The VED for new petrol and diesel cars will double from current levels, with specific rates varying based on CO2 emissions.
  • Standard rate (second year onwards): £195 from the second year onwards
  • Additional rate (expensive car supplement or luxury car tax): New petrol and diesel vehicles with a list price exceeding £40,000 will attract an additional charge of £425 annually from the second to the sixth year of registration

Hybrid Cars:

  • First year rates: £110 for cars emitting 1g/km to 50g/km of CO2
  • Standard rate (second year onwards): £195 from the second year onwards
  • Additional rate (expensive car supplement or luxury car tax): New hybrid or vehicles with a list price exceeding £40,000 will attract an additional charge of £425 annually from the second to the sixth year of registration

Why VED rates are changing: These adjustments, announced in the Autumn Budget 2024, are designed to ensure that the VED system keeps pace with the increasing popularity of electric vehicles and maintains VED revenues in real terms.

Contact our sales team today to learn how the upcoming VED changes impact your purchase of a new Volkswagen.

What is Vehicle Excise Duty?

Vehicle Excise Duty (VED), more commonly referred to as road tax, is paid by the registered keeper of the vehicle every year in the UK. The amount that you pay for your vehicle depends on a number of factors that include the registration date and the environmental performance of your car, primarily the g/km of CO2 that it emits. The annual increase in road tax increases in line with the Retail Price Index (RPI).

Until this year, electric vehicles were exempt and electric car owners benefitted from free road tax but this is now changing and electric car owners will now have to start paying vehicle excise duty. Cars that pay road tax in other tax bands and existing electric cars will also be subject to an increase in VED.

Contact your local Volkswagen dealership today for more information

John Clark Volkswagen Aberdeen: 01224 384 000

Specialist Cars Volkswagen Kirkcaldy: 01592 22 00 00

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