‘Luxury’ car tax….a first world grumble

So I’m not seeking any sympathy whatsoever. Least not from folks who drive cars that would make me question my life choices if I had to drive them every day

It was that attitude that I began to see in myself and my acquaintances that turned me right off being “into cars”.

Median uk salary seems to be under £40k so spending more than that on a runabout appears to be the perfect definition of a luxury.

The tax would be open to fraud and much more complex to collect if based on used values.

This is the only argument I can agree with. And just like everything else in this country, I find it highly annoying that tax dodgers and fraudsters push up the costs and taxs for everyone else.

My car was well over the limit at list price. But it’s a 2015 diesel which bought at 7 years old and for which I pay £255 I think.  I’d make the tax based on list price, since this data is in a readily accessible database, and I’d reduce it year on year at standard depreciation rate as per the bike to work scheme.

That would make sense. And start it at a higher rate to maintain the level of tax collected.

But I do care that it’s not based on the value of the car at time of purchase.

But it is, just not the time you purchased it. As you were well aware.

A 10 year old car has less corrosion issues now than a 5 year old car used to.

Certainly than one 20 or thirty years ago. My partner’s 10 year old VW Polo has no visible corrosion on the body either on top or underneath ( although  evidence of surface rust on suspension components). The first Alfa Romeo GT Junior that I bought in 1986 was 10 years old and had been resprayed twice and had numerous patches underneath around the spare wheel well etc.

There are anomalies in the VED system. I have had two near Identical VW Golf’s one 2015, the other 2018. The former  £255 the latter £190 because it was less than £40k new

Which I’d be all for. But the way it works means it’s not a simple affordability tax. I’m not questioning a tax on expensive cars. And I don’t particularly care if the threshold is 20, 30, 40 or 50k. But I do care that it’s not based on the value of the car at time of purchase. That is the element I think is nonsense

So at what point does a used luxury car cease to be luxurious then?

The treasury reckons after about 5 years, which seems about right, there’s plenty of 19 plate cars I’d not turn my nose up at, and plenty of 18 plate cars that are pretty much the same. You wanted something blingy from the 20s so you pay the extra for that choice.

Basically for every £40k+ car sold the state gets £2k extra over the course of half a decade, they tell buyers in advance so they can factor that into the purchasing decision, they don’t really care who pays it so long as it gets paid.

It seems about as fair as it can be, in that the person who owns the car at any given point during that 5 years pays their annual bit extra. You might think it should be a tapering tax or calculated based on the residual value of your nearly new toy, but then that’s extra admin and faff for public servants to do (also not free) in order to accommodate a discretionary purchase you made.

Of course I’m sure the NHS thanks you for the extra funding, as do we all, thanks you doing your bit for trickle down economics… 😉

I thought your were off out for a ride?

It’s just another way to tax cars. It’s quite tricky to buy a new electric car for much under £40k but then I guess no one does, they just lease them and pay the monthly fee

 folks who drive cars that would make me question my life choices if I had to drive them every day

Et tu.

That’s 1880 hours of work to pay for it ?. Stick it in a stocks and shares ISA at 30 and it’s nearer 4 years off your retirement at 60.

Life choices eh?

It’s really unpleasant when it gets all chippy Wolfie Smith on here. We have the same nonsense on the Hank ‘I live in a big house in the Cotswolds’ thread.

Really? I think its fairly unpleasant the way some people moan about “poverty spec cars”…as if being in poverty is driving a Dacia or whatever. I think that’s much more unpleasant.

Many state run agencies are in a mess and/or underfunded. Add in inflation making their costs higher and an electorate that is very anti paying it’s no suprise that none headline grabbing methods like this are used to raise more funds.

you have to ask why they are all so badly underfunded and in critical need of investment. It’s because the last lot in government spanked billions of our pounds on the stupid Rwanda scheme to appeal to the knuckle dragging element of society. The same scumbag demographic that voted for the other major bit of social and economic vandalism that is and was Brexit.

if the govt are wanting to raise more tax, you can raise it from the scumbags that caused this mess ; targeted taxes & / total removal of benefits from those that voted for Brexit.

I didn’t vote for Brexit and I am certainly not going to be willing to increase the amount of tax I pay to repair the damage! They can clear up their own mess.

“But I do care that it’s not based on the value of the car at time of purchase. That is the element I think is nonsense”

If they wanted to raise the same amount of money based on current/used value they’d have to either put the threshold down a lot or the amount charged (per year) up by a factor of 5. Because otherwise everyone could just swap their nearly-new car for someone else’s of the same vintage, and dodge the tax from year 2 onwards…

 folks who drive cars that would make me question my life choices if I had to drive them every day

Et tu.

That’s 1880 hours of work to pay for it ?. Stick it in a stocks and shares ISA at 30 and it’s nearer 4 years off your retirement at 60.

Life choices eh?

That’s 1880 hours of work to pay for it ?. Stick it in a stocks and shares ISA at 30 and it’s nearer 4 years off your retirement at 60.

Life choices eh?

For sure. Likewise you could say the same about any purchase you make that is ‘non essential’. That includes any bike used for recreational purposes over about 250 quid, any house that provides more than four walls, a roof and basic utilities. Holidays etc etc. Stick what you save in the bank and you could retire early

Or you could enjoy life now whilst you are still young (ish). All life choices as you say.

I thought your were off out for a ride?

45 min in scottish wind was enough for anyone.

For sure. Likewise you could say the same about any purchase you make that is ‘non essential’. That includes any bike used for recreational purposes over about 250 quid…

Unlike cars, more people on bikes would make the world a better place for everybody. I consider myself a petrol head, with a toy car I pay a decent chunk of tax on, and a ‘daily’ (which in reality is used rarely*), but we have an utterly toxic car culture that has a massive impact on our environment in numerous ways as well as an economic cost. We also have a trend for ridiculously unnecessary and impractical (usually luxurious) vehicles (particularly in urban environments), and anything discouraging that I don’t see as a bad thing.

I do agree we could have a more progressive tax, but until then, this one serves a purpose in a relatively fair way.

*I own 2 cars because it’s stupidly cheap and convenient, especially compared to other transport options.

Unlike cars, more people on bikes would make the world a better place for everybody

Whilst I agree, that’s not really relevant to my point that was a response to the statement that if you didn’t spend money on cars you could retire early! (Also a point I agree is correct btw!)

To your point about cars being bad for environment, there should be a larger tax on emissions and car size surely. Expensive cars aren’t necessarily bad, although I suspect most expensive cars are worse for the environment than newer cheaper ones.

It’s a bit ridiculous that my non ulez compliant boxster costs a 3rd of the amount to tax as my new car. (Although in my defence I barely drive it so the environmental impact is probably quite low)

To your point about cars being bad for environment, there should be a larger tax on emissions and car size surely.

Don’t disagree at all, and it’s disappointing they haven’t implemented it, yet.

For sure. Likewise you could say the same about any purchase you make that is ‘non essential’. That includes any bike used for recreational purposes over about 250 quid, any house that provides more than four walls, a roof and basic utilities. Holidays etc etc. Stick what you save in the bank and you could retire early

Well, except one is a £250 bike and the other is a £30k car, and the rest are relatively ongoing expenses rather than a one off.

My point was that, £30k as a lump sum with no other investments, costs or anything else, compounding at 7% for 30 years is an inflation adjusted fourfold increase.

I just find cars as some sort of financial status symbol that allows people to “question people’s life choices” bonkers. However nice their seats are it’s not as comfy as spending your 50s somewhere sunny riding bikes and putting your feet up rather than still being on the career treadmill.

Imo there’s an increasing number of very fancy cars being driven around in increasingly run down towns and cities.

Something’s gone wrong somewhere.

Or maybe it’s supposed to be like that to encourage us all to work harder.

A few years back I asked about this tax – I was considering a car that was 5.5 years old and probably low 40’s original list price

I wanted to know if I’d have to pay the full annual rate, pro rata, or nothing as previous owner had paid the lot.

The level of vitriol (and/or insinuations that I was a multimillionaire performatively claiming poverty) from people with no reading comprehension whatsoever was quite something.

Either the 10K depreciation in one year reflects the extra tax, or you’ve overpaid for a SH car.

Put it this way, since you knew about the tax beforehand, effectively you were paying the price plus 1600 quid. If you think the car isn’t worth that, then you overpaid. If it is, you’re all good.

Imo there’s an increasing number of very fancy cars being driven around in increasingly run down towns and cities.

Leases are a way for people with a modest income to make themselves look richer.

Yeah.. But you have a diesel volvo, so ultimately the jokes very much on you..;-)

No one who has motorbikes is jealous of sporty cars 🙂

Imo there’s an increasing number of very fancy cars being driven around in increasingly run down towns and cities.

Something’s gone wrong somewhere.

Or maybe it’s supposed to be like that to encourage us all to work harder.

Well there’s lots of newer cars on the roads, 73/74 plate, dunno how fancy they are.

Cards on the table, I’m one of them now in a 74 plate Octavia, having dipped my toe in the leasing game for the first time. And having done that, like you I’m noticing just how many other people are probably doing the same.

Basically for about the same monthly outlay I could have financed a 3-5 year old equivalent (probably getting diddled with interest in the process), we’d have ‘owned‘ it after a few years then as well. But then what? We’d carry all the costs for servicing/MOT/VED (I took the bolt on maintenance and tyres package) on a thoroughly depreciated asset. We could have raided our savings to buy a new or used car outright, and again ended up carrying similar costs on a depreciating asset…

At the end of the day a car is just a tool, one that has to suit our needs for a handful of years and then move on for someone else to own or lease and make use of. Our circumstances are such that we can’t be sure what we will need in a couple of years time, but most probably we won’t need an estate.

Don’t get me wrong I know I’m just paying the depreciation on VFS’s asset, but compared to what it would cost me to ‘own‘ the same thing, or indeed an older equivalent, I’m getting a reasonable deal TBH.  I think I’ve broken the back of my inherited notions about “owning” a car, it’s the old adage innit: “the things you own, end up owning you“.

I drive a nice enough car now (after years of paying over the odds for rotting shitboxes), I don’t own it, and I really don’t want to, because nobody makes money on cars apart from car companies and car dealers. I want to use it (for a fair agreed price) and then hand it back.

The level of vitriol (and/or insinuations that I was a multimillionaire performatively claiming poverty) from people with no reading comprehension whatsoever was quite something.

On STW? Surely not

This argument whether a £40k car is luxury or not (it definitely isn’t BTW) completely misses the point that an Audi A4, Ferrari or Bentley get additionally taxed at exactly same level (£310 PA) under the expensive car levy.

Edit..

Actually can’t be assed!

Even our own chief socialist TJ has (i believe) a custom built bike costing more than a few grand. For what is basically a toy. But good on him if that’s what he wants to spend his cash on

I’m a green not a socialist.  Ive never owned a car apart from one I was given that I had for a few weeks in the 70s.  The bike was for special reasons.  Its “Julies Bahookie” 🙂  and will last the rest of my cycling life.   My bikes are not just toys.  They replace cars 🙂

What I have saved over my lifetime buying ( mainly) secondhand bicycles rather than expensive cars has meant I now have lots of capital and a decent retirement at 60.  I don’t find my worth in material goods.  I find it in friendships and experiences.  I feel sorry for those who need to buy stuff to prove their own value

I don’t find my worth in material goods. I find it in friendships and experiences. I feel sorry for those who need to buy stuff to prove their own value

How about sometimes some people buy nice stuff because they enjoy using it?

It doesn’t ALWAYS have to come down to materialism.

You don’t always come across as being that fulfilled with joy from your life as a monk tbh

How about sometimes some people buy nice stuff because they enjoy using it?

It doesn’t ALWAYS have to come down to materialism.

Indeed. You think me buying a 2nd hand ‘mid range’ car is so people can say ‘wow look at him, he must be doing well for himself’? Every second car on my St is as expensive, it doesn’t impress anyone. I bought it because I liked it.

And given I’ve reached the age of 48 without ever having spent more than 10k on a car before I’m fairly comfortable in the fact that I’m now in a position to treat myself to the most expensive thing I’ve ever bought in my life.

Jeeez..

Get back to your tractor factory.

if you put your name down now you might be awarded a discretionary benefit in 5 year’s time.

How about sometimes some people buy nice stuff because they enjoy using it?

Oh dear, that’s not going to go down well with some on here.

Why do some people think that others buy expensive cars to show off and make people think they are rich ?
I find it interesting that when people talk to me about my id Buzz , they really love the car and are enthusiastic about it and how they would love to buy one. That’s a £72k list price car.
Yet on the other thread where the OP is asking about a £50-60k defender ( could be more / less depending on spec of course), he gets flamed by some for his ostentatious choices.

I think it’s naive to think that there isn’t at least some % of the population that is buying cars that are more expensive than they would ‘normally’ be able to afford on PCP because of a desire to keep up with the joneses. That said, it obviously isn’t everyone.

Judging people’s spending (or ability to spend) is basically a British pastime and I’m 100% confident people judge what I choose to spend my money on and that’s fine. As for the Defender thread it’s not even the ostentatious nature of it, if he chose to drop £50k on a watch (for example) then I’d roll my eyes at the choice because it doesn’t match my personal values but that’d be the end of it.

The extra special thing about the Defender (or indeed, any heavy, large internal combustion powered luxury vehicle bought for ‘toy’ purposes) is that the general switch to cars like that comes at the expense of the safety and air quality of everyone else. Yeah that’s some hand wringing lefty/green crap sure, but those are my values so that’s what you get from me.

Reading through this the thing that gets me is that it’s really easy to figure out if your “luxury” car is more highly taxed, like finding out the tax of any new/older car. A 40k car (whether cash/pcp/lease) is a purely discretionary purchase. Buy a £39,999 car if you are bothered by the extra tax. Oh and £40k car is very nice thing that most of the population would be extremely happy with.

There’s a few on our school run who’ve definitely picked up a vehicle purely to show off to the neighbours. One’s a brand new defender 110 in stormtrooper white with white panniers, wheels and ladders. The others an e-tron of some sort. Both driven by the sort of person who can’t walk more than 1m to the school gates. I guarantee that both will get adorned with the cheapest LandSail ditchfinders when they discover the cost of tyres. Bought purely as a status symbol. They are rare though.

I bought my own extravagance as I knew it was that last of its kind, the absolute end of an era and I wanted to be a part of it. Most people haven’t a clue what it is, and that’s just fine with me. Occasionally you’ll get someone who knows come up to me and meekly say “is that a qua, quadric, quatroformagio?” (Sic)

And I go “why yes, yes it is” and smile knowingly.

And that’s usually where it ends.  It’s a thing for me and me alone, to enjoy, cosset and drool over. I couldn’t give a fig what other people think. It’s lush, and I’m very lucky to have been in the position to get one. I don’t mind paying the VED. What I do mind is the fact that it bears no relation to the impact the vehicle has. A flat figure is the wrong figure, set arbitrarily for no other reason than we count in base-10. Realistically it should be more and directly linked to its George Best-like thirst.

I’ve done the cashpoint car thing.  The 10pm bid on eBay on  some unseen £1500 shitbox to tide me over (for 3 years in one instance), combined with a constant worry over whether a card will get declined when you chuck a tenner in. Thankfully I’m not there any more, but you never know what twists and turns life might present.

Leases are a way for people with a modest income to make themselves look richer.

Really ? I think leases are financially savvy way of getting to drive a nice car.

Oh and £40k car is very nice thing that most of the population would be extremely happy with.

That’s the point, they are not. Car companies are charging £40k + for really dull , horrible cars.

Nice cars are now £70/£80k +

That’s the point, they are not. Car companies are charging £40k + for really dull , horrible cars.

Nice cars are now £70/£80k +

I don’t agree with that tbh. My cars list price was 42k. It’s a nice place to sit with performance that wasnt far off super car territory 20 odd years ago. The difference is that it can carry a bike and 2 dogs!

I don’t think we should confuse a nice car with a luxury car. There are plenty of very nice cars about for considerably less than 70k!

Every second car on my St is as expensive,

Gold

Why do some people think that others buy expensive cars to show off and make people think they are rich ?

because the first thing they do is make an internet post to humblebrag about how unfair the Expensive Car Supplement is?

I don’t think we should confuse a nice car with a luxury car. There are plenty of very nice cars about for considerably less than 70k!

Agree on that. They should rename the existing tax to ‘nice car’ tax and then add a more expensive tier at say, £70k and call that the luxury car tax.