New taxes on 4x4s shown to have little effect on demand or price
25 Comments | Add Comment | Blog entry posted 5th September, 2007
In a move designed largely to satisfy Britain’s green lobby, former Chancellor of the Exchequer, Gordon Brown chose to raise taxes on so-called ‘polluting’ vehicles last April. However, to the delight of car manufacturers, this decision has not reduced the demand for or the prices of large cars during the first half of 2007.
Composite data gathered by British Car Auctions examined the prices of used 4x4s in the United Kingdom both before and after the introduction of the aforementioned vehicle tax. These figures suggest that the average price of a used 4×4 was actually higher after the introduction of the tax than it had been in early 2007. The resale price of a 4×4 hit £9,098 in June compared to £8,159 in February. Prices did fall somewhat during March, April and May. However, in general, vehicle prices during these months were still higher than they had been during the same period in 2006.
Steady automobile prices have much to do with the market for large cars in the United Kingdom. Large cars, such as 4x4s are generally very expensive to begin with. Additional taxes only account for a small fraction of the resale value of any given 4×4 – a cost which many owners are willing (albeit grudgingly) to shoulder. This leaves demand relatively unchanged.
Instead, average prices are likely to be affected by other factors. For example the increase in 4×4 prices in June was much to do with the fact that “(a number of) desirable, high-value models…hit the used market.” Tony Gannon from British Car Auctions elaborated on the subject in a recent interview. He argues that “while a rise to £300 for the annual Road Fund License for the most polluting vehicles sounds substantial, it is a minor factor in the overall value of most premium 4×4 models. Price movements seen in the sector are very much in line with prevailing market conditions, and in reality average values are ahead, year on year.”
However, little has been done by the government to educate motorists about the new tax regulations. According to BCA, a significant proportion of drivers have been left confused by the wording of the ruling. Simply put you will have to pay the new vehicle tax if:
- Your 4×4 falls into ‘Band G’ on the ranking system for car emissions which has been produced by the government. This means that your vehicle is a heavy polluter.
- Your 4×4 was registered as new after 23 March 2006.
Needless to say, criticism of the road tax has been particularly strong in some quarters. Opponents have argued that the road tax unfairly targets those living in rural areas who require a 4×4 in order to access fields and property. For those living in mountainous regions, 4x4s often provide the safest mode of transport, particularly during the winter months. Proponents of these views argue that the tax should only be levied on those 4×4 owners who live in urban areas, where, according to critics, a 4×4 is often no more than a ‘fashion accessory.’
Replies to New taxes on 4x4s shown to have little effect on demand or price
Neil Cooper March 24, 2008
I am addressing everybody on here.
If you take some time and do some research, you will learn that Global Warming/Climate Change is a natural process. And the contributions from mankind don't make a significant dent.
All Sun's slowly get hotter before they die, our's is getting hotter as it ages,
and you will see that certain moon's from other planets in our solar system, that have ice, are beginning to melt.
If you look at climate changes through the ages you will see some dramatic shifts. And there was no pollution in those early days...
It's all about taxes. When goverments run out of money, they take more from us anyway they can.
Science lesson over.
Neil.
Martin Clee March 16, 2008
i own a 4x4 for my own reasons 1 i like it. 2 why not. 3 my kids are safer in it. 4 my suspension never seems to need replacing. 5 i need it to get over all the lumps and bumps in are roads untill they finnish practising rapairs. 6 it slows me down yes i was one of them. 7 thicker tyres less punctures. 8kids can see over hedges (less board). 9 the range rover is crafted for a v8 . and 10 this is a free country ?
Martin Altria December 10, 2007
Well, some people are simply jealous of 4x4 owners, I personally bought a 3.9L discovery with a supercharger that does about 12 to the gallon with 3.5 tonnes of trailer behind it......... try that mr "boring" Mondeo man !!! some of us have a real job............
Like someone said earlier, these silly "greens" are all jumping on the band wagon...... YOU will be next with taxes imposed on how many revolutions your electric motor driven car is doing per mile, as this must affect something somewhere......... remember this government goes for easy targets by stirring up the masses..... smoking, 4x4's, motor bikes next ... So get off your A**** and support the rest of the community whilst you are still aloud to !!! As communist britain is on it's way....................
John Edmonds December 10, 2007
Just to say I drive a 4x4 WHY!!!! because I transport all my dogs in it and tow a caravan which I use for all our holidays in this country.It also does on average 40+ to the gallon,more than can be said about some of our bog standard saloons,oh yes we also feel nice and safe in ours.
Alan December 4, 2007
All these 'facts' about how good these vehicles are. When you could only buy them as basic land rovers the general public didn't 'need' them.
Whatever the facts, ignorant people will try to justify these stupid vehicles.
Oh! I need a three tonne vehicle because I have a bad back.
Bob Burgess November 20, 2007
how is it that Britain is such a tiny tiny island compared with the rest of the world
is so responsible for the climate?
four by four cars are also taking the brunt
lorries are far worse they outnumber four x fours where i try and live.
Winging members of our sad society should realise we all need fuel to survive, high fuel tax discriminates between rich and poor,
Climate will change only the beings that adapt with it will survive not the strong rich or clever but people that adapt !!!
Nick Holland November 19, 2007
I've just swapped my Vectra SRi estate 2.2 for a 4.0 Jeep Cherokee with a LPG conversion as its better on fuel, bigger to get all our camping gear in and cleaner to run and cheaper to insure. The cost of the insurance was a few pounds less (Vetra was a 2001 Jeep is a 1995). I decided this after watching a prgramme on TV which was suppsoed to show that 4x4's are dangerous- BUT eveyrthing pointed toone thing, you are better off in a 4x4 if you have an accident. I used to be a demonstration driver for Ford so know how to drive properly. I agree its not what you drive but how. I'm quite capable at driving at over 100 mph but would never do this unless on a motorway in very quiet and good conditions. The biggest cause of accidents are those who don't drive to the conditions or can't handle what they drive.
Mathew November 13, 2007
Dave, it's not all about safety. These huge 4x4s, such as Range Rovers and BMW X5s, not only take up unnecessary space on Britain's roads, pollute the atmosphere with hundreds of g/km of CO2, but they far MORE dangerous when it comes to the safety of pedestrians.
Regarding your claim about 4x4s being involved in less car accidents - this is probably because boy racers couldn't obtain the insurance required to drive these vehicles, or the fact that many unconfident drivers avoid bigger cars.
I'm 19 and drive a Golf 1.6 FSI. I drive sensibly and have never had a single bump. The key to road safety is not what car people drive, but how they are driving it. For example I see many pensioners who, through no fault of their own due to never having been required to take a driving test, constantly hog the middle lanes of the motorways.
Dave November 12, 2007
I am a Police Officer working in London, and despite all the allegations of 4x4s being more dangerous in accidents etc. 4x4s are involved in less accidents on a percentage basis than the BMW 3 series, and no one suggests banning them or increasing the VED on them. Motorists should be wary of jumping on the "green" bandwagon and appearing to support banning 4x4s. Once they have gone what vehicles do you think will be next on the Hitlists .. Estate cars maybe or possibly cars with more than 4 seats. the accident facts do not support the claims. If road tax was placed on fuel and taken off vehicles everyone would pay for their own pollution, i.e those who drive more pay more.
Mark Layland November 9, 2007
The anti-4x4 & gas guzzle argument severely annoys me. What ever happened to freedom of choice and the simple right to drive what you want. What difference does it make if you drive 10000 miles per year in a car doing 20 per gallon or 20000 miles in a car doing 40 per gallon - the consumption & emission is the same. Quite frankly i do not agree with the CO2 argument. The 'gas guzzlers' are already paying more tax per mile by using more fuel. I do not see the difference of a 1.6 focus chugging to the shops on full choke, with a cold cat and choked up engine doing not much to the gallon (about 35) vs a nissan terrano doing 32 to the same gallon.
The government has the ability to do so much good but prefers to resort to scare tactics and bludgeoning of the public in order to extract more and more revenue from them. If they want more revenue then they should look towards making the very rich pay their dues instead of letting fat-cat bosses award themselves £1,000,000 bonuses paid through devious routes so that they pay NO tax on it.
Steve Davenport November 8, 2007
with regard to the tax i think it is a joke how often do you see the roads being resufaced its getting beyond a joke to be honest and i changed my high performance car for a 4x4 because of the road humps and potholes, i kept replacing wheels and tyres all the time but now the 4x4 goes anywhere i want it too, also i do use it for offroad exercises and suits me for work which i travel 9 miles each way.
so my point is why pay road tax when the councils never repair or resurface them.
also if everybody in this country stoped driving for 2 days the country would come to a standstill and i think there should be a fuel strike again to sort out the government.
Brian October 23, 2007
I drive a 3Lt diesel, it has the option of driving from rear wheels only with 4 wheel drive only when required.
90+% of my time on the road is using rear drive only.
According to reliable sources, the efficiency of this engine under these driving conditions is in many comparisons better than older/cheaper range vehicles 'petrol and diesel' of half this engine capacity e.g. 1.5 to 2Ltr.
Based on this 'fact' I suggest that the 'gas gussling - high polluting reputation of 4 x4s is nothing more than a brainchild of the Chancellor to persuade the uneducated environmentalist lobby of this country to back him when taxing some motorists more than others, especially now that 4 x4s are becoming more popular.
John Atkinson October 22, 2007
Why is it that some people assume that because you drive a 4x4 you must have lots of money. Sorry but that's simply not the case. We chose to purchase a 2nd hand 4x4, to meet specific needs, for less than the price of a new family car that didn't. We also gave up our 2nd car to save money.
Mathew October 7, 2007
Wayne, if you read the other topic you would know I have mobility problems myself. I realise people with disabilities, long distance commuters and people living in extreme rural areas have different needs (including myself). I am only 19 and have had over a dozen lots of surgery, including upcoming amputations on both feet. Therefore I DO understand your circumstances and my perspective was already wide enough before adding my previous comment. :-)
By the way, I'm certainly not on the side of the extreme environmentalist lobby who have waged war on all motorists. I don't deny that humans are contributing to global warming though.
Mathew October 6, 2007
In response to post #3,
Diane, I'm only 19 and I'm already totally fed up with white van men. If they're not tailgaiting other cars, parking in ridiculous places, swearing and chasing other drivers they're doing something else.
Seriously, they're all clones! They all seem to think they own the roads.
Regarding 4x4s, they may be the safest vehicles in some ways, but they are unsafe in others. For example, they have more chance of tipping over and they're far more dangerous to pedestrians.
I drive a Mach 5 Volkswagen Golf 1.6 FSI and I feel extremely safe. The amount of safety features installed inside the car is amazing. I think my car has a total of eight airbags!
All the safety equipment and the brilliant build quality is probably what makes Volkswagens sturdy and extremely safe cars.
Wayne Faulkner October 1, 2007
Since a back injury I've owned a 1996 3.9 V8 Discovery for more than 8 years, and for those that insist it was an expensive purchase it wasn't (£15k second-hand), and isn't now (value today £3k if I'm lucky!). I spent £1200 converting it to LPG in March 1999.
I've driven it on Unleaded and got an average of 18mpg, and on LPG I get an average of 17mpg.
In terms of CO2 emissions, each fuel produces the following per gallon;
LPG 6.86kg
Unleaded 10.50kg
Diesel 12.18kg
So I reduce my CO2 emissions by ~31% by running it on LPG
In addition, as I'm disabled I don't pay VED, so whatever plans people have to increase VED will not affect me should I buy a newer Discovery within the next few years.
Most people running a V8 are using LPG, as Unleaded is so expensive!
BTW, most people I know running 4x4 diesels are actually running on Vegetable Oil, since the government allow 2500 litres personal allowance per annum before attracting fuel duty, and there's nobody going to question them if they've actually used more than that, the government can't prove one way or another.
So most diesel 4x4 users that I know, are using fuel that won't contribute to climate change.
Can the same be said of mondeo man?
From the comments made here, some of you need to widen your perspective a little.
Graham Hulland September 29, 2007
I own a second hand 2.0 petrol Nissan X-trail. Reason i have slight problems with my legs and lower back and find this car better to get in and out of as it is higher than a standard car. I feel it is unfair to penalise somone who needs this type of vehicle due to a slight health problem. I feel sure there are many more motorists in the same position or worse who need a similar car for the same reason. I do not make unnecessary trips and i am very conscious about the enviroment and green issues.
David Wilson September 28, 2007
I personally think that road tax is pointless. If you increase it for so called high emission vehicles you are only punishing the people honest enough to pay it. Get rid of the excise license altogether and up the fuel tax a bit, that way everyone who drives pays it, police will be released from prosecuting non payers, courts and lawyers will not be required to prosecute/defend these people. and you can cut the amount of people required to administer it. And you are taxed for the amount of miles you do. I do have an axe to grind as I am a low mileage driver, because of my job, and I object to paying the same road tax as somebody who does two or three times the mileage I do per annum. Can someone explain to me how C02 is a greenhouse gas and is perhaps the heavies componentn of the air we breathe.
Evelyn Paterson September 28, 2007
If you can afford a 4 x 4 then you can afford the increase in taxes so he is wasting his time doing this. Just another money spiinnibng exercise with no effect on the environment
Alan September 28, 2007
My guess is that most 4x4s are driven by farmers and country folk for very good reasons. The next likely user is a caravanner probably retired who holidays in this country bringing income to country folk and not thereby causing the emissions of using air travel. One person flying London to New York uses more fuel than most 4x4s in a year.
The logical answer not to tax the vehicle but is to tax the fuel in all vehicles and aircraft the same. Then we would see who has to change their habits.
Fred Winks September 28, 2007
My daughter drives a seven seater Volvo CX. mostly at least six of those seats are full, because she is able to carry six pass. this often cuts down the number of cars used to transport school children to events, her emmissions are lower than my Rover 45's and fuel consumption not much worse.
Four years ago she drove an Audi A2 and was rammed by an inexperienced driver whilst standing at traffic lights, result, unable to carry out her usual work, a life time of pain and reduced mobility, and a responsibility placed on her children to assist her that should never be their's at their age.
Kriss Smooth September 28, 2007
I drive a lorry for work, and as you look down on these 4x4's very often there being driven / steered by a finger or 2 this already gives them a feeling of being safe inside a larger than normal vehicle, these vehicles are a lot safer when it comes to accidents as there bumpers are usually higher of the ground so when hitting another car the bumper (and the steel reinforements behind them) rides over the smaller cars strenghtening points causing more injury to the occupants. And surprisingly how many can see whats in front of them at a short distance ??
Diana Stonier September 28, 2007
I feel that a 4x4 is a better option for my work as I carry a lot of folders in my boot and travel a lot of miles including on the motorway so therefore I think it is safer than a normal size car. My daughter was in a small fiesta with her son who got rammed up the back end by a 'white van man' and was pushed into a 4x4. The car was totally crushed every single panel on the car was bent, luckily she got out of it so this has spurred me to get another 4x4.
So my argument is that 4x4's are not a fashion accessory but something that could well save your life in a serious accident.
DS
Mathew September 19, 2007
The Liberal Democrats are the sensible ones with regards to 4x4s. A few hundred pounds on VED is simply not enough to discourage people from purchasing these huge, often unnecessary pose vehicles.
The wealthy mainly purchase these expensive vehicles anyway - and they can often afford a few extra hundred quid.
Increase VED to £2000 for the most polluting vehicles.
Chris Minett September 9, 2007
Where exactly is the direct link between the tax hike on Band G (ONLY applicable to vehicles registered as new after 23rd Mark 2006) and 4x4s?
Not all 4x4s fall into that category (yes, I agree that many do) but many other cars do as well - why does everyone always seem to forget those?
And if you want some examples, just look at most sporty cars. Porsche, Ferrari, BMW, Jaguar, Mercedes all have non-4x4 models that fall into Band G, and yes, so too the Renault Espace! Yet you don't see these mentioned along with all these "nasty gas-guzzling 4x4s"!
Please note that any viewpoints published here as comments are user's views and not the views of PetrolPrices.com (Fubra Ltd)