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Vehicle delivery delays cause hike in prices

Leasing Brokers are faced with having to re-quote prices to customers with many hundreds of pounds being added in some cases.
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May 1, 2020

DELAYS in delivering new vehicles caused by the Covid-19 pandemic are leading to unexpected price increases for lease customers.

Delays have meant cars due to be delivered in March are not now being registered until April and beyond meaning they now fall into the new VED tax bands introduced on April 1.

Leasing Brokers are faced with having to re-quote prices to customers with many hundreds of pounds being added in some cases.

The Leasing Broker Federation has taken up the matter with the Treasury, asking if there is any likelihood of dispensation on vehicles that should have been registered in March.

The amount of car tax has changed with petrol and diesel vehicles set to cost more to tax on average.

This is because VED is based on a vehicle’s CO2 emissions and the the methodology behind testing emissions has changed from NEDC (New European Driving Cycle) to WLTP (Worldwide Harmonised Light Vehicle Test Procedure).

WLTP was introduced because it provides more realistic testing conditions and being more rigorous, they give higher g/km CO2 emission levels than under NEDC.

From April 2020, the amount of car tax due is calculated using WLTP standards, so cars are recording higher emissions and so liable for more tax.

What has happened is that cars registered in April cost hundreds more in VED tax than those registered in March. While the actual price of the car hasn’t changed, the amount of tax has.

The 2020 VED rates can be found here.

The Leasing Broker Federation is currently waiting for a response from the Treasury. In the meantime, if any members want to tell us about their experiences they can contact [email protected] or [email protected]

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Chris Wright

Chris Wright

Chris Wright has been covering the automotive industry nationally and internationally for 30 years. Following spells with consumer titles he became News Editor of Automotive Management (AM), Editor of Automotive International, International Editor for Detroit-based Automotive News, and Editor of Dealer Update. He has also co-authored several FT Management Reports and contributes regularly to Justauto.com

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