Thinking of buying a new car?

The current road tax system set low CO2 emissions targets for new cars. But with so many cars now hitting the targets, about 75% of new vehicles would become road tax exempt this year under the current system. 

This is having a big impact on the government's ability to pay for essential road maintenance across the UK. So if you're thinking about buying a new car, here are some details you need to know about the changes.

Cars with zero emissions costing less than £40K are tax-free.

Those costing more than £40K will have to pay a tax of £310 for the first five years and £140 a year after that even though they have zero emissions.

The majority of cars will pay £140 a year.

Drivers of small, low emission hybrid cars will take the biggest impact from the reforms. Tax on some models will be up to ten times more than under the current system.

For example, drivers of cars like the Nissan Qashqai - currently tax-free - will now have to pay the £140 flat rate a year, costing them a total of £520 over the first four years.

But those with higher emissions cars could end up saving a lot. If you're looking to buy a car that costs less than £40K but has emissions of 226g/km and above, you could save up to £600 over the first five years. It could also save almost £2,500 over ten years against the current system. 

If you're planning to buy this kind of car, it's worth waiting until after the reforms have come into effect. If you want to avoid the changes, make sure you register your new car by 31st March 2017.

Are you thinking about buying a new car?

Why not take a look at a Nationwide Loan?