motoring guide

The new car tax regime

Alistair Darling's budget last month unveiled nothing short of a new car tax regime for motorists, with higher charges to be levied for the most polluting vehicles in a bid to tackle pollution. So just how far will the new rules affect the UK's 40 million drivers? Under the proposals, categories for vehicle excise duties (VEDs) have been revised so vehicles in Band A – which emit up to 100kg/km of carbon dioxide - will pay no fees while those in Band G – which emit more than 255g/km - will pay £400 in 2009.

In addition to the highest road tax rates, in 2010 a so-called "showroom tax" will be levied on the highest polluting vehicles during their first year of ownership. Cars that emit more than 255 kg/km of carbon dioxide, such as the Range Rover Sport and Ferraris will be subject to the highest charges of up to £950.

However, motorists buying brand new cars in 2010 that emit less than 165g of CO2 per km will get the first year's car tax free of charge.  

Further to increased charges on new vehicles, Mr Darling also introduced unpopular increases in vehicle duty on older cars based on their emissions. This means that drivers of some family cars and people carriers such as the Ford Galaxy and Renault Espace could see their car tax rise to £455 per year by 2010. The new rates will affect almost all cars built between 2001 - 2006.

• Use the official car tax calculator to see how you are affected
• Visit the Directgov site for full details of the new car tax bands

In support of his changes Mr Darling said: "It is right that if people choose to buy a more polluting car that they should pay more in the first year to reflect environmental cost. The changes will provide a real incentive to manufacturers and motorists."

But the measures were refuted by the Conservative party, as the shadow vice-chancellor George Osborne remarked: "Labour came into office promising to help Mondeo man. Now Gordon Brown is hitting Mondeo man and millions of families with new taxes. Labour's economic incompetence means a rising cost of living for the very people they said they would help.

"This is a bad news Budget which kicks Britain's families when they're down. The cost of living is already rising fast and the government has added to it with stealth taxes on cars and alcohol, when we believe that these kinds of taxes should be offset with tax reductions elsewhere."

Although the new car tax rules may appear to restrict motorists hoping to purchase larger vehicles, according to Guardian Money it is still possible to buy a family car or even a 4x4 and escape high charges if a smaller diesel engine is chosen over a petrol one.

Motorists hoping to buy a used car will need to assess carefully how much tax they will be paying on a chosen model in the future.

The news provider claims that the Chancellor dramatically reduced the value of used cars in the higher VED categories.

For example, large petrol-run, automatic MPVs, such as the Volkswagen Sharan, will be unattractive to buyers due to high taxes from 2009. Recent figures verify the appeal of diesel cars among motorists.

The Times reports that statistics published by the Society of Motor Manufacturers and Traders show that sales of diesel cars have increased, accounting for 40.2 per cent of the 2.4 million cars sold in Britain last year, compared with only 13.8 per cent in 1999.

Diesel accounts for a greater share total of fuel consumed by all vehicles in Britain than petrol, with drivers last year buying 25.5 billion litres of diesel and 24 billion litres of petrol.

According to the organisation, sales of diesel-powered cars will outstrip petrol-powered cars, by 2011.

Diesel may cost 5p to10p a litre more than petrol, but it proves more economical for most drivers as it powers 10 to 20 per cent more miles for the same fuel, the news provider reports.

Furthermore, figures released by Experian show that purchases of energy efficient and eco-friendly vehicles are increasing among used car buyers. According to the information services company, sales of used diesel cars rose by four per cent last year while sales of used petrol cars fell by 4.4 per cent.

Greater London saw the highest increase as sales of used diesel cars increased by nine per cent during 2007, followed by five per cent in the south-east.

Used electric and hybrid vehicles have also increased in popularity with sales rising by 473.5 per cent and 71.8 per cent respectively.

"There has been a lot of media attention, not only around the environment and the effect of the most polluting cars, but also on the forthcoming car tax increases and the rise in fuel duty," explained Kirk Fletcher, managing director of Experian's automotive division.

"These latter factors appear to have played a more significant role in consumer buying habits over the last few years," he added.

The worth of government measures to encourage manufacturers to produce more fuel-efficient vehicles and motorist to buy them have been disputed by some industry experts.

Nigel Wonnacott from the Society of Motor Manufacturers and Traders told the Daily Telegraph: "Does he (the chancellor) really think that manufacturers operating on five- to seven-year product lead times are going to completely change direction because of a punitive local sales tax? Not a chance."

The Telegraph also reports the extra VED might make cars in the highest category appear even more lucrative.

"There might be something in that for a small minority. Possibly from the same people who welcomed the £25 congestion charge in London. But on a serious note, this isn't a VED change; it's a sales tax that's been bought in under the cloak of environmentalism."

The chancellor's reform of VED, which will see the treasury net an extra £735 million from motorists has also been received with scepticism by the AA's Edmund King.

"The increase in vehicle excise duty for high-polluting vehicles will catch out many motorists. Drivers want cleaner, greener cars but we must ensure that the proposals are not just a green smokescreen for allowing the Treasury or local authorities to take more cash from the motorist," he said.

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Campaigners and government tackle drivers without insurance

The number of uninsured drivers on Britain's roads has become a subject of extensive debate recently, with concerns that people will cut back their cover or even cancel their policies to try and save money in the recession.

Various commentators have continued to warn drivers about the consequences of cutting back on car insurance, with the Motor Insurers' Bureau (MIB) recently launching a campaign to urge people to maintain their cover.

The latest figures from the Department of Transport suggest that around 6.5 per cent of motorists are uninsured, which represents around two million drivers.

This is despite the fact that over 95 per cent of people believe it is socially unacceptable to drive without motor insurance, according to MIB research.

Figures from moneysupermarket.com suggest that there has been a 33 per cent increase in the number of people driving without car insurance in the last year, with a fifth of drivers thought to have broken the law, compared to 15 per cent in 2008.

Young drivers appear to be the worst culprits, as research suggests that 20 per cent, or 243,000, of the 1.2 million people aged between 17 to 20 years old on Britain's roads do no have car insurance. This is reflected in attitudes, as 83 per cent of 18 to 24-year-olds think it is socially unacceptable to avoid getting cover, which is well below the national average.

In addition, while 21 to 29-year-olds make up 13.8 per cent of the driving population, they represent 34 per cent of uninsured motorists, according to the MIB. In fact, the typical uninsured driver is a male aged between 17 and 29.

Worryingly, many people are unaware of the consequences of being caught without car insurance, or are unrealistic about their chances of being apprehended.

Only three in five drivers believe they are likely to be caught, despite the introduction of automatic number plate recognition (ANPR) technology which makes it easier for police to detect offenders

Recent figures from the Association of Chief Police Officers and the MIB showed that more than 170,000 uninsured vehicles were seized in 2008, which is more than double the amount confiscated in 2006, the first full year in which new legislation was introduced to help police crack down on the offence.

The new scheme gave officers improved access to the Motor Insurance Database (MID) and included the national roll out of the ANPR equipment, which records registration numbers and cross references them with records in the MID to reveal whether the driver is fully covered. The database is extensive, containing details of more than 35 million insured vehicles in the UK.

According to the MIB, the police are being increasingly successful in removing uninsured vehicles from Britain's roads, with as many as 500 a day being seized. In 2008, 40 per cent of those were crushed or sold.

Even more worrying is the fact that some motorists are actually unaware that driving without car insurance is illegal. The MIB's research shows that one in ten 18 to 24-year-olds do not know this, while nine per cent of 25 to 34-year-olds are unaware. This is in comparison to five per cent across the driving population as a whole and three per cent of 45-year-olds.

The consequences are severe. Drivers will, at the very least, have their car taken away, a minimum of six penalty points on their licence, have to pay a £200 fixed penalty and a further £150 to get their car back. They will also prove they have purchased car insurance to retrieve their vehicle.

However, 68 per cent of drivers are not aware that the maximum fine is £5,000 and a possible eight points on their licence. In addition, 55 per cent do not know that their vehicle will be held until they can provide evidence that they are covered.

A further study by MoneySupermarket found that two-thirds of Brits believe that motorists who are caught without car insurance should face stronger penalties than are currently enforced.

This is unsurprising considering the damage that uninsured drivers do. In 2008, £400 million was collected from insurers to compensate people injured by offenders, with the costs being subsidised by the honest driver to the tune of an extra £30 per policy on average. However, it is thought that the total cost of uninsured driving in the UK could be as much as £500 million a year.

In addition to the monetary cost, there is also a human cost.

"Driving without insurance is not a victimless crime," explains Frank Whitely, chief constable of Hertfordshire police.

It is estimated that uninsured and untraced drivers kill 160 people and injure 23,000 every year.

"Uninsured drivers are more likely to be involved in road traffic accidents, more likely to be non-compliant with other road traffic requirements and potentially involved in other criminal activity," he added.

According to the MoneySupermarket research, 16 per cent of people think that the government or the motoring industry should subsidise younger drivers to stop them from taking to the roads without car insurance.

In addition, the Association of British Drivers (ABD) recently suggested that responsible young drivers should be rewarded for their safe practise.

"People who take [further driving courses] should automatically get some sort of benefit from it," said Hugh Bladon, founding member of the ABD.

"There is the possibility of a reduced insurance premium through [them], but we think it should go further.

"If the government were sensible, they would give people plus points instead of minus if they've passed some sort of accredited improvement course," he added.

The problem of uninsured drivers has not gone unnoticed by the government. The Department for Transport recently confirmed plans to crack down on the offence.

Proposals include making it illegal to keep an uninsured car, even if is not being driven. Anyone caught doing so would receive a £100 fine and if the vehicle remains uninsured then it could be seized and destroyed, regardless of whether the penalty has been paid.

Road safety minister Paul Clark insisted that the "tough new measures" will leave offenders with "nowhere to hide".

As two or more convictions can increase car insurance premiums by 20 per cent on top of the fines incurred, it is cheaper in the long run to obey the law. The consequences of getting caught are severe, according to Malcolm Tarling, spokesperson for the Association of British Insurers.

"Future insurance will be more expensive, it will be harder to obtain, you'll have trouble getting credit and other types of financial products and you could even risk picking up a criminal conviction which is something which could blight employment prospects amongst other things in years to come," he said.

Computerquoteinsurance.com can offer low insurance premiums with a range of different insurance discounts available.

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New green vehicles for 2008

Concerns over the effects of climate change and calls to halt the increase of global warming have rapidly pervaded almost every sector - and none more so than the motor industry. Although the development of an environmentally-friendly vehicle may seem an almost impossible task, last month's Geneva Motor Show displayed just how inventive manufacturers are becoming in their production of 'green' cars.

Volkswagen used the event to showcase its new EcoFuel, a natural gas-fuelled version of the Passat, which combines "the seemingly contradictory virtues of performance and economy" and will be on sale in Europe around the end of the year.

Autobloggreen.com reports that unlike most natural gas-fuelled cars, which tend to be less powerful than their gasoline counterparts, the Passat EcoFuel uses one of Volkswagen's turbocharged direct injected TSI engines, which can be powered by both conventional fuel and compressed natural gas (CNG).

Optimized for running on CNG, the 1.4 litre TSI engine has an output of 150hp, and fuel consumption of 5.2l/100km and is fitted with both a supercharger and a turbocharger.

In order to allow the engine to cope with the additional loading encountered through the burning of natural gas rather than gasoline, changes have been made to the vehicle.

The valves, piston rings and the pistons are all uprated, while the turbocharger has also been replaced with a smaller unit. Controlling the switch between conventional fuel and natural gas is a new engine management computer.

Natural gas is stored in three tanks, with a combined capacity of 22 kg, underneath the floor of the boot and is supplemented by a 31-litre tank for conventional petrol. Between the two tanks the vehicle can cover more than 490 miles.

Ford also used the Geneva Motor Show to display the green credentials of some of it's own products.

"Sustainable mobility imposes a huge challenge for society and the automotive industry, and there is still a long journey ahead of us," said John Fleming, Ford of Europe president and chief executive.

The company claims to be able to provide "technically viable and affordable ways to reduce the burden on the environment without giving up basic needs such as personal mobility".

Ford is currently focusing on a line of low carbon dioxide emitting cars called ECOnetic and bio-ethanol powered Flexifuel vehicles as well as developing a range of affordable new petrol engines under the brand name Ford EcoBoost.

"These use a combination of direct fuel injection and turbocharging technologies to deliver better performance, emissions and economy from smaller displacement engines," Mr Fleming continued. "In addition to our dedicated lines of low-CO2 vehicles, our current standard range of vehicles is highly competitive in terms of CO2, as well. This demonstrates how serious we are in our commitment to reduce continuously the carbon footprint of our cars."

"And this without sacrificing any of the other trademark qualities customers expect from Ford vehicles: style through 'kinetic design'; excellent driving dynamics and dependability throughout the lifetime of the vehicle," he added.

Meanwhile, Motor Trend reports that Hyundai is also seeking to affirm its commitment to green technology with its HED-5. The six-seater, which uses existing technology to reduce carbon dixoide emissions by up to 29 percent – received its world premiere at the Geneva Motor Show. A revived version of Hyundai's European-market MPV, the Matrix was also on display at the event.

Fiat was yet another car maker to join the swelling ranks of environmentally conscious manufacturers at the show.
The company's 500 Aria and Panda Aria models are both low-emissions vehicles that will be exempt from road tax in the UK, Yahoo News reports.

The 500 Aria uses a retuned version of the 500's 1.3-litre turbodiesel engine, producing just 98g/km of carbon dioxide, a new Duologic semi-automatic gearbox and Stop&Start - a device which switches the engine off when the car is at a standstill to reduce pollution.

In addition, Fiat has reduced the weight of the 500 Aria, fitted low rolling resistance tyres and used recycled materials for the inside.

The vehicle will be on sale before the end of 2008, although Fiat has not confirmed prices.

Fiat said emissions will be reduced to just 69g/km for the Panda but added it will take longer to enter the showroom than the 500 Aria, however.

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Checking car insurance before driving abroad

Check your car insurance cover before driving abroad

When it comes to holidays this summer, most Brits are unwilling to give up some form of escape to the sun, even though many will be cutting back.

However, experts believe traditionally popular destinations in Europe such as France, Spain and Greece will still be the destination of choice for many holidaymakers this summer, as people see vacations as a necessary luxury.

A recent survey by holiday company Expedia.co.uk found that 60 per cent of Brits still intend to take their full holiday entitlement this year, even though they are under increasing pressure at work.

Nearly half of those surveyed said that they feel rejuvenated after a break, while a third commented that it increases their productivity when they get back to the office.
 

If you are planning to drive abroad either in your own vehicle or a rental car, then there are various things you need to consider before you head off for a week or two of relaxation so that you do not end up returning more stressed than when you left.

"Don't drive abroad unprepared," the Foreign and Commonwealth Office (FCO) advises.

First of all, you should familiarise yourself with the laws of the country you are visiting when it comes to driving. This can be as simple as checking which side of the road they drive on or the speed limits and units of measurement they use, such as the metric or imperial system.

For example, France operates under the metric system and therefore displays any limits in kilometres, as well as providing different speed guidance for adverse weather.

Another important preparation is to check with your car insurance company that your policy covers you to drive abroad. This should include breakdown recovery and medical expenses incurred as a result of an accident, according to the FCO.

Some countries require an international driving permit, so you will need to investigate whether your destination is one of these and make sure your licence complies with their regulations.

If you are taking your own car, then you should make sure it is fully equipped for long-distance driving. First of all, service your vehicle before you leave the UK, because the last thing you want is to have to try and get repairs done abroad, especially if you are having to deal with someone who does not speak the same language.

The FCO advises drivers to carry a fire extinguisher, first aid kit, tools, spare bulbs and a warning triangle. In the case of some countries this is compulsory, such as France, where you have to have a reflective jacket and warning triangle to use in the event of a breakdown or accident.

You should be in possession of the car's registration document, your driving licence and, of course, passport, as well as your UK motor insurance certificate, breakdown policy and useful contact numbers and emergency helpline details.

Your car must have a GB sticker clearly visible on the back of it, unless the number plate indicates the car's country of origin. Beware though, that this must comply with the Road Vehicles Regulations 2001, which allows drivers to travel within the European Community without the conventional oval sticker if the plate displays the GB letters against the blue European flag within a circle of gold stars.

For those who intend to fly to their chosen destination and then hire a car, the FCO recommends choosing a reputable rental company.

It advises: "The cheapest deal may not always be the best!"

"Insurance cover is often limited to the legal minimum of the country or state you hire in. You could be held personally responsible for any claim for injury or damage over this limit," the FCO adds.

It also recommends asking your tour operator or car insurance provider if you can top up on the minimum offered by the rental company in order to increase your cover. Not only does this mean that you will know exactly what level of protection you have and any fees associated with claiming, but you could also save money, according to the FCO.

If you decide to hire a motorbike or scooter while abroad, the same sort of guidelines apply. Make sure you go with a reliable company and if it is a foreign outfit, check it is licensed to rent out bikes to tourists.

You should make sure that you travel insurance cover you to drive or be a passenger on a motorbike, which means that you need to check the small print and exclusions carefully.

"Travelling by motorcycle, scooter or moped is significantly more dangerous than by car - if you're not accustomed to riding a motorcycle you should not attempt to ride one for the first time abroad on unfamiliar roads," the FCO adds.

In addition, you should make sure that your motor insurance includes third party cover.

Another thing to consider when travelling abroad is the fact that driving styles and customs may be different. For example, flashing your lights could have an alternative meaning.

"Drive defensively and expect the unexpected," the FCO advises.

Do not forget that the drink driving limit often differs in foreign countries, with most European nations having a lower benchmark that Britain.

A recent survey by Holiday-Rentals.co.uk found that Brits are intending to spend almost £300 less on their vacations this year due to the recession, but cutbacks should not include insurance cover.

Graeme Trudgill, technical and corporate affairs executive at the British Insurance Brokers' Association, says: "Travel insurance is as important as a suitcase."

"Don't underestimate it. Always buy it, it is cheap to buy but make sure you are buying the right thing for you," he advises.

"People tend to see it as a commodity attached to their holiday but it is something you've got to rely on.

"If something does go wrong abroad, you want to be able to phone someone who speaks your language who knows how to get someone to help you, [or] get you some medical attention and pay for it," he explains.

The same applies to car insurance cover if you are intending to drive abroad.

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