New Diesel Tax: Scraping or selling an old diesel car?

16 Jan 2018

Diesel car owners woke up to the news that they’ll be hit by a new diesel tax with effect from April 2018. It is believed that the new tax will have an impact on over 800, 000 drivers of diesel company cars and over 2 million UK buyers. The Treasury made this announcement as part of Government’s plan to improve the air quality. It is the belief of the government that the fumes from diesel cause air population. With this legislation come consequences for those who fail to meet the standard. As such, drivers who buy new diesel cars that fail to meet the acceptable emission standards will face a one-off levy and allocated to a higher vehicle exercise duty bracket.

With the new legislation, under the vehicle exercise duty band, diesel car owners are required to pay from £10-£500 more than they usually do with the current set-up. The Treasury believes that the introduction of this new diesel taxation band will affect over 2 million UK drivers over the next 5 years. This will generate about £125m for the government in the first year and is expected to gradually drop as people purchase fewer diesel cars with the high polluting tendency. The good news for all diesel car fans is that this levy does not apply to the newer models of vehicles that are confirmed to attain the emissions requirement in a new test. In case you’re wondering, this new test is known as “Real Driving Emissions Step 2”, which is expected to come into effect by 2020.

This development within the diesel car sector in relation to new level of taxation has left a few car owners to consider selling or scrapping their old vehicles. One of such car owners recently posted a question on The Guardian motoring and money section on the options of either selling or scrapping a 12-year old diesel Mercedes E-class estate with about 106,000 miles clocked. As at the time of writing this blog, there were over 121 comments from users who either proposed an argument for selling or scrapping the old car. One of the users with decent number of upvotes advised the poster that diesel cars are still one of the cheapest forms of motoring. The user further added that the second-hand value of diesel cars will not nosedive as users will put their finances before the environment. A few other readers also advised the poster to keep it, as it still has a few more miles in it. Scanning through the comments, it becomes apparent that the line of arguments from contributors is along the aspects of environmental friendliness or financial consciousness. Users on the side of protecting the environment are advising the poster to sell or scrap the car and resort to the use of public transports, cycling or walking. This group of individuals are not advocating for a replacement vehicle as they believe buying a newer model of a diesel car could prove to be more damaging to the environment.

The environmentally conscious readers also added that opting for public transports, cycling or walking depends on where the poster resides, as cities, suburbs or villages have their peculiarities. The idea of using electric cars was also proposed by some environmentally focused individuals as an alternative to replacing the vehicle with a newer model of a diesel car.

The financially conscious readers believe maintaining a diesel car is cheaper and keeping it for that reason is understandable. On the other hand, a few contributors believe selling the car now will yield better financial return than later after the new levy has been set in place. It will be interesting to see how this new tax development impacts the diesel automobile industry with regards to the rate of buying, selling and scrapping these cars.