The recent increase in Band G road tax (technically known as Vehicle Excise Duty or VED), has led to buyers trading down from models just over the threshold. That would be very good news - except the threshold is in the wrong place. Virtually all cars currently on sale (99.8%) emit somewhere between 100 g/km and 450 g/km CO2 - yet the top band is set at just 225 g/km. Therefore someone wanting a large off-roader is going to pay the same tax on a Land Rover Discovery TDV6 (244 g/km) as a Range Rover Supercharged (376 g/km). With no incentive to downsize, luxury car buyers are actually buying higher polluting cars in the first half of 2007 than they did in the equivalent period of 2006.
Nagley is suggesting a new Band H set at around 275 g/km to give luxury car buyers a reason to take CO2 emissions into account when they're shopping. As Nagley concludes, "luxury car buyers decide they may as well be hung for a sheep as for a lamb." A financial incentive to opt for a car somewhat lower on the CO2 scale is good news even for the wealthy.
Read the full report here.
[Source: Clean Green Cars]