‘Luxury’ car tax….a first world grumble

Fiscal drag. £40k car isn’t quite the luxury it used to be.

Plenty of people will be happy about it though as they don’t like others having nice things. Either because they can’t afford them, or because they don’t want others having what they can afford.

another person who has no idea what the real world is like for millions of folk.  It may not be quite the luxury it was but its still an expensive luxury vehicle.  Its nothing to do with jealousy.  Its about understanding reality

Most new crap cars these days are heading towards £30k, that’s for a Vauxhall , nothing particularly grand or posh. Most cars are £40k + new, hence why people are not buying, and big manufacturers are on the verge of going bust

I think garages purposely hide the extra tax to people ie offering 6 months free tax so the additional charge never gets mentioned

Be thankful you’re not in France.
https://www.eplaque.fr/en/car-registration-cost-france

Up to 60k euro emissions tax (>192g. ) and/or 10 per kg above 1800kg.

another person who has no idea what the real world is like for millions of folk.

I’ve been there, I remember, and I still see people who are still there.

its still an expensive luxury vehicle.

I didn’t say it wasn’t.

Its nothing to do with jealousy.

I didn’t say it was.

another person who has no idea what the real world is like for millions of folk.  It may not be quite the luxury it was but it’s still an expensive luxury vehicle.  It’s nothing to do with jealousy.  Its about understanding reality

So says the multi home owning landlord. ?

this so very much

I second this.

Most I have ever spent on a car is £10k

Plenty of people will be happy about it though as they don’t like others having nice things

There’s a bit of a victim mentality emerging here. I think people are generally perfectly ok about other people having nice things but can be a bit puzzled by them complaining about paying a tax they’ve become knowingly liable to by making what’s really a purely discretionary purchase.

Enjoy your car, but the tax was baked into the price when you bought it.

Poorly conceived idea. I’ve said it before but VED should be on three simple metrics:

1. Pollution

2. Weight

3. Volume

V8 Range Rover, takes up loads of road space and weighs a ton. £800 a year? Tesla? Same. Zoe £50?  Pick-up truck no longer defined as a commercial vehicle, so £800 year

bikesandboots – apologies if thats not what you meant – thats how I read it

If the car industry is struggling because no-one can afford a £40k new car, then it ought to collectively get together and think of ways to reverse its wrong headed direction of car culture. Most folk just ‘need’ a simple utilitarian vehicle, but we get promoted unnecessary performance, superficial luxury tat and techno trinkets. By this point in time every car in production should be simple, durable, fixable, recyclable and as low impact as possible – and arguably relatively low performance. The fact we are so far away form that point is why the industry remains toxic. They should have started towards that more than a decade ago. If a tax nudges buyers away from excessive consumption and forces the manufacturers to steer away from needless luxury then I’m all for it.

£40 is definately a luxury car. List price of a Dacia Sandero is about a third of that. Looking at what you can get for £40k,

– Base spec tesla model 3
– Hyundai Ioniq 5
– A posh spec long wheelbase caddy life with the biggest engine, autobox and a couple of grand of extras.

Hell, you can get a focus for under £30k that comes with luxuries like adaptive cruise control!

I think it is a bit like bikes; manufacturers have made their products better and more complex and sold consumers the idea that they still need products with the same brand name. So yes, the base spec passat is almost £40k, but it is a far more luxurious and complex car than the passat I had 20 years ago. That certainly didn’t have luxuries like autodimming headlights, a satnav with integrated ChatGPT or an electric tailgate! I’m not sure that even included air con as standard in base spec.

So the tax doesn’t include everything, but it is a simple tax which makes it cheap to adminster and hard to game.

Great points from endoverend and minus. Cars are massively over complicated and the makers push these cars onto us. There’s no need for constantly  bringing out new models and making all the parts incompatible with previous models or even other brands or stuffing them full of unnecessary tech or luxury. If you want that then you can have it but expect to be taxed on that luxury.

This tax seems like one of the fairest. Only applies to those with high amounts of disposable income and is very easily avoided by personal choice.

Also many £20k used cars that were £40k new can have a year or two of this left to pay. Those aren’t luxuries.

Worst case is something that with an inflated list price, sold new with heavy discount. And or with some expensive options that bumped up the list but arent worth much second hand.

So firstly i’ll say I can’t afford a new car costing 40k. But I recently bought one second hand for under 30k

just be thankful you’re too poor to be able to afford a 2nd home, then you’d really have something to humblebrag about 🙂

Whereas to people living in the real world it’s a bloody fortune

10k is alot of money. But it’s not an expensive car. No more than 100k is an expensive house. Just because millions of folks can’t afford it doesn’t change that fact. And noone outside of argumentative knobers on stw would try to argue that a 10k car is expensive in the context of buying a car.

It didn’t stop you buying it, so are you just moaning?

No it dodnt stop me because I really wanted the car, it was a good deal, its exactly what I wanted. So I chose to pay this arbitrary tax. There are plenty of things I buy or pay for that I think are a rip off, but I buy them anyway as I want to enjoy life. Doesn’t mean I think it’s a fairly thought out tax however, or I can’t complain on here about it!

Other than the usual ‘boo sucks to be you’ arguments, aside from the point about capturing tax dodgers, I’m yet to hear a decent argument for why I should pay the same addition tax penalty on a 2nd hand car costing less than 30k as someone that pays 10 times that much for one brand new. Or why it’s fair that if I buy a car brand new for 39999 I don’t pay the charge, but if I buy one second hand for half that I possibly might?

The tax is (should be) reflected in the price.

I know about 5 people who ve bought a new dacia duster, c20k, does everything needed. Its only the badge snobs who dont like them. Car mags rave about them. 1 even bought the pov spec one and bought the body kit online, you can t tell the difference.

The £40K tax point is now hitting a lot of pretty normal cars (e.g. VW Passat)

Passat is a luxury car, look what segment it is aimed at. The golf is the more normal one.

A decent spec A4 or 3 series

Pretty normal A4 estate

Also luxury cars

Mini Countryman PHEV

Guess what……. See a theme here

EVs subject to the same rules starting next year isn’t it?

About time, they should never have been exempt in the first place. Still luxury aren’t they.

Don’t get me started on whether SUVs should attract more tax!

well….the carbon cost embedded through its production exists throughout its lifecycle whether you buy it first or second. Like most taxes, its a clumsy way to do it- and as a society were still a long way from a better way of assigning cost relative to consumption.

Passats, Audi rep mobiles and Minis aren’t luxury cars. Get a grip

Passats, Audi rep mobiles and Minis aren’t luxury cars

I have to agree. And up until this point in my life I’d never spent more than 10k on a car, and never once in the past have I thought that either

But tbf the tax isn’t a ‘Luxury car tax’, it’s an ‘expensive car tax’. Is 40k expensive for a passat..I’d say very much so!

I’m not particularly against a tax on expensive cars. But I think it should be a tax percentage of the cars value at time of purchase, and should apply to ALL cars. More you can afford to spend the more you pay. Would be fairer imo

I think it should be a tax percentage of the cars value at time of purchase, and should apply to ALL cars. More you can afford to spend the more you pay. Would be fairer imo

There’s already a flat rate tax on cars – VAT. Increasing the tax on ALL cars would adversely affect those with smaller budgets. Basically works the same way as income tax bands.

Got one thanks, they absolutely are luxury vehicles. Passat is aimed at executive purchasers and Audi don’t make anything not aimed at the upper end in the relevant target segment, even the A1. Minis are sold at a premium over similar vehicles because they are different or cool.

Cost is a good way of defining a luxury. None of the above do anything better than lower cost options but they cost more because they are perceived as better, have more luxuries or are built more luxuriously.

When I was looking earlier in the year pretty sure you could get a base Passat under 40k.

I’m not particularly against a tax on expensive cars. But I think it should be a tax percentage of the cars value at time of purchase, and should apply to ALL cars. More you can afford to spend the more you pay. Would be fairer imo

Sounds better than the current scheme.

Thanks OP – useful thread.

I’m currently looking for a second hand EV in the 15-18k price bracket which could easily fall foul of this and I didn’t realise.

FWIW I think all cars are too cheap. We need less cars on the road and should be encouraging getting longer life out of each and every one. I also think a lot of vehicles have become bloated and over powerful and that these should be penalised to encourage more use of appropriately sized lighter more efficient vehicles. Sadly these are minority views.

I’m currently looking for a second hand EV in the 15-18k price bracket which could easily fall foul of this and I didn’t realise.

Evs are currently exempt from this, so whatever ev you buy now (second hand or new) will not have the luxury tax applied, but Evs (new or second hand) registered from a date I can’t remember but some point in 2025  will be subject to it like any other car.

So go ahead and get whatever second hand ev you want (as long as it wasnt registered after the date in 2025) , you don’t need to worry about the luxury tax.