There are some significant changes to the charges that apply in the year the car is purchased. As with the system that applied to cars registered before 1 April 2017, the first year charges are based on CO2 emissions.
The new charges are typically much higher than under the old system. For example, a car with CO2 emissions of 175 jumps from £220 to £800.
In year two under the new system the charges are no longer based on CO2 emissions. If the car runs on petrol or diesel there is a fixed charge of £140 and an additional rate of £310 if the car has a list price of more than £40,000.
The purchase of second hand car such as an ‘ex demo’ continues with the VED system in operation when the car was first registered. So such purchases are tied into the old VED rates.
Overall the increases to VED are quite significant and although selecting a vehicle with lower CO2 emissions, will help keep the first year charges to a minimum. The charges in subsequent years will still be significantly higher than those under the previous system.
You can get details of the new (and old) VED rates at www.gov.uk/vehicle-tax-rate-tables