£1,000 Showroom Tax

Showroom Tax was introduced on 1st April 2010 in the UK and includes a £1,000 car tax band. That’s right you can pay up to £1,000 in first year road tax when purchasing a car in Band M. Don’t be fooled into thinking the £1,000 road tax is just on sports cars or 4x4s. Purchase the wrong Vauxhall Insignia for instance and you’ll be paying £1,000 in first year car tax.

Showroom Tax is effectively the Road Tax Price you will pay in the first year of ownership of a brand new car and is a one-off increase in car tax known as Vehicle Excise Duty (VED). This has largely remained out of the headlines since then, with many car dealers saying consumers are totally unaware of it. Read our article for full details of Showroom Tax bands.

Showroom Tax penalises high emission cars and encourages ownership of low emission Road Tax Band A to Band D cars which, under the new Showroom Tax legislation, will be FREE to drive in the UK for the first year in terms of car tax. When you buy a new car the first year rate is included within the Road Tax when the car is first registered so it’s automatic.

Beware - Band M doesn’t just include sports, luxury and 4x4 cars. The introduction of Showroom Tax means it’s imperative that you do your homework and select the right version of your chosen car. Certainly don’t expect the salesman to point out the inefficient and costly mode variant which in many circumstances will be the one they want to sell you with discounts attached. By choosing the wrong high CO2 model and trim specification you can spend thousands in on-going Road Tax and fuel costs.

 

See our examples below which highlight 3 very popular cars across the Family and Compact Executive markets. Choose the WRONG high emission version of your new car and YOU will be made to pay!