For some types of cars and their makers, the new Vehicle Registration Tax and road tax laws will be a hard pill to swallow. Paddy Comynlooks at the cars that will fall into the highest of bands - F and G
BY NOW, hopefully at least a few of you are beginning to understand what the new VRT and road tax laws will mean to the Irish customer. From July 1st, on new cars and cars imported from other markets, you will pay both VRT and road tax based on the amount of carbon dioxide (CO2) that your car produces.
These are divided into seven bands, labelled A to G:
Band A:cars that produce 0-120g/km CO2 - 14 per cent VRT - €100 road tax;
Band B:cars that produce 121g - 140g/km CO2 - 16 per cent VRT - €150 road tax;
Band C:cars that produce 141g-155g/km CO2 - 20 per cent VRT - €290 road tax;
Band D:cars that produce 156g-170g/km CO2 - 24 per cent VRT - €430 road tax;
Band E:cars that produce 171g-190g/km CO2 - 28 per cent VRT - €600 road tax;
Band F:cars that produce 191g-225g/km CO2 - 32 per cent VRT - €1,000 road tax;
Band G:cars that produce 226g/km CO2 and over - 36 per cent VRT - €2,000 road tax.
Depending on the type of car that you intend to buy, some cars will increase in price, whereas some will decrease in price. A simple rule of thumb is that medium to large petrol cars and larger diesel engine cars are likely to increase in price and be subject to larger annual road tax, whereas many fuel-efficient petrol and diesel engines are likely to reduce in price and road tax. Put even more simply, the more fuel you use, the more CO2 your car produces, and that means more VRT and road tax.
The highest VRT rate used to be 30 per cent and this covered quite a large number of cars, namely any over 2.0-litre. And the highest road tax you would pay would be €1,491 per annum. However, from July 1st, the highest rate of VRT will be 36 per cent, applied to cars that produce 226g/km or over, and these cars will be subject to an eye-watering €2,000 per annum road tax.
Larger-engined petrol cars, and older, larger diesel engines are likely to be the worst hit. While brands like Lexus will be able to further boost the appeal of the Hybrid engines, the same brand will need to bid farewell to the hope of selling many of their other petrol engines.
Take the GS range, for example. The new GS line-up was unveiled this week, with most of the focus on the reduced price of its Hybrid version, which will soften the blow of the likely increased price of this version from July, when a long-standing 50 per cent rebate in VRT for hybrids is capped at €2,500 from July 1st. While the Hybrid, with its 185g/km of CO2, will reside in Band E, with a reasonable 28 per cent VRT and €600 road tax, its less expensive GS300 petrol sibling, because of its 226g/km of CO2, will see its VRT jump from 30 per cent to 36 per cent, and its annual road tax jump from €1,231 to €2,000 - meaning it will become an increasingly resistible choice.
Meanwhile its rivals, such as BMW's 5-Series diesel, especially the 520d, will take the opposite direction.
While its 2.0-litre diesel engine would have commanded a top rate of VRT of 30 per cent and €590 road tax, the most fuel efficient version BMW does, with its 136g/km of CO2, will see its VRT rate drop dramatically to just 16 per cent, slashing the purchase price, and it will cost just €150 per annum in road tax.
Any of the larger SUVs, despite the fact that they are, for the most part, run with diesel engines, will see their rate of VRT increase to 36 per cent.
Models such as the Audi Q7, BMW X5, Land Rover Discovery, Range Rover and Range Rover Sport, Kia Sorento, Mercedes-Benz ML and Toyota Land Cruiser are all going to reside in the dreaded Band G, commanding an increase in VRT of 6 per cent and that €2,000 per year road tax burden.
Owning a high performance car is also likely to increase significantly. While owners of cars like Porsche, Aston Martin and Ferrari are unlikely to be too out of pocket by seeing their cars increase to a VRT rate of 36 per cent and €2,000 per annum road tax, performance cars such as the Subaru Impreza WRX, Mazda RX-8 and Nissan 350Z will all jump into the highest band and may put some potential owners off buying new models of their chosen cars.
The key things to remember therefore, is the CO2 figures that your car produces. These will determine not only the purchase price of the car, but also the road tax that will apply to the car over the course of its life. This, it is hoped, will go towards cleaning up our national fleet in the long run.
But the bad news is not, it must be added, for a large group of motorists. Using 2006 car sales figures, it was shown that just 4.7 per cent of motorists drove cars that will fall into the Band G range, with just 9.9 per cent falling into Band F.
A saving grace for some manufacturers of large SUVs and large MPVs, as so often is the case, is that these are bought as commercial vehicles, whereby these remain subject to a lower VRT rate of just €50.
This allows more expensive SUVs to be purchased for commercial use at a fraction of the cost they are charged at new, provided they are altered to the satisfaction of the Revenue Commissioners. They also command much lower rates of road tax if they are used for work.
For brands such as Ssangyong, whose Rodius MPV will occupy Band F, this model, so highly coveted by taxi firms, is likely to get something of a stay of execution. While its VRT rate will go up to Band F, meaning an increase of VRT to a rate of 32 per cent, its road tax will decrease from €1,147 to €1,000. However, as many of these are bought by taxi firms, these pay just €79 per annum road tax .
Sales of petrol- and larger diesel-engined MPVs are likely to suffer in terms of passenger salesin favour of more fuel-efficient (and more tax-efficient) smaller diesel rivals.
"A saving grace for some large SUVs and large MPVs, as so often is the case, is that these are bought as commercial vehicles, whereby these remain subject to a lower VRT rate of just 50