The recent changes to vehicle excise duty (VED), often referred to as car tax, are expected to disproportionately affect certain demographics, according to new analysis. A study indicates that women and individuals born between 1946 and 1964 – commonly known as baby boomers – will bear a significant portion of the increased financial burden resulting from the updated rates.
Data suggests that if current buying patterns continue, female car buyers could face an additional £62.8 million in VED payments this year alone, surpassing the £7.4 million extra expected to be paid by male drivers during the same period.
The research, conducted by Go.Compare and based on Department for Transport figures from the first half of 2024, highlights several key changes introduced as part of the Chancellor’s new policy.
Here’s a breakdown of some of the significant rate adjustments:
- Vehicles with zero emissions will now incur a £10 charge for the first year.
- Cars emitting between 1 and 50g/km of CO2 will be subject to charges of £110 (petrol/alternative fuel) or £130 (diesel).
- Rates escalate sharply for vehicles with higher emissions, culminating in a maximum charge of £5,490 for those exceeding 255g/km.
- The standard annual rate for cars registered after April 1, 2025 will be set at £195.
- A supplementary “Expensive Car Supplement” of £425 will apply for five years from the start of the second licence period for vehicles with a list price exceeding £40,000.
- Vehicles registered between March 2001 and April 2017 continue to be taxed based on CO2 emissions, with rates ranging from £20 to £760.
- Light goods vehicles now face a £345 annual charge.
The disparity in impact stems largely from vehicle ownership trends. While one in ten men owns an electric or plug-in hybrid vehicle—now subject to VED for the first time – only seven percent of women do.
Furthermore, 68% of women drive petrol cars compared to 58% of men; a factor that experts attribute to these vehicles generally producing higher CO2 emissions and consequently placing drivers in higher tax brackets.
Baby boomers are projected to shoulder an additional £40.5 million in VED costs due to these changes.
Unfortunately, some groups will be worse impacted by the rising VED rates than others, which is mainly down to the type of cars they tend to buy,” said Tom Banks, car insurance expert at Go.Compare.
Banks emphasized that choosing a low-emission vehicle when purchasing a new car can help mitigate these costs, placing buyers in more favorable tax bands. He also advised motorists to shop around for competitive car insurance rates and adopt fuel-efficient driving habits to further reduce expenses.
