Car tax – top five myths dispelled

  • We take a closer look at the common misconceptions with road tax
  • Get it wrong and you could get in trouble with the law
  • Here's the top five vehicle tax myths and the truth behind them

Car tax - it's a subject many of us would like to avoid thinking about when it comes to buying a new car.

However 2014 was a very busy year for car tax. We said goodbye to the paper disc, tax became non-transferable between buyers, plus there were big changes to the way we can pay.

These changes have meant several owners falling foul of the law. To make sure you don't, here are our top five tax myths dispelled.

Don’t forget to check out our Cars for Sale section for the latest deals on new and used cars. And when you come to sell your current car, make sure you get a free car valuation with us to ensure you get the right price.

1. Dealers can no longer tax your car for you

Dealers can still tax the car for you by using your name and address and the V5C/2 registration - sometimes called a New Keeper Supplement, and applying either online, over the phone or at the local post office.

It is ultimately your responsibility to make sure the car is taxed though so if you'd rather do it yourself, you could haggle to have the cost of the tax knocked off the car price. 

2. You can drive away without taxing your new car from an auction

Once the seller at the auction informs the DVLA that the car is sold, you will need to tax it immediately before you drive away. You can do this either online or by phone and the service is available 24 hours a day, seven days a week.

The DVLA advises that vehicles should not be purchased without sight of the Vehicle Registration Certificate (V5C) and you should insist on having the New Keeper Supplement given to you at the point of sale as you need the 12-digit reference number on it to be able to tax the car immediately.

3. You get a full refund in car tax when you sell your car

This isn’t true either as there are instances when you may be a little out of pocket. Once you inform the DVLA that you have sold your car an automatic refund will be processed. You will only get a refund for each complete calendar month that the tax is paid for. For example; if you sell your car on the November 2, you will only receive the money back for tax paid after December 1.

It is important that you tell the DVLA of any change of name or address as any refund will be paid to the details they have saved on record. 

4. Paying by monthly direct debit costs no more than paying for 12 months up front

As of October last year, car tax can finally be paid by monthly direct debit. It does however, cost you five percent more than if you decided to pay annually. The same five percent increase is charged for six monthly payments too, however, this has been reduced from ten percent as of October 2014.  

5. I will no longer get a reminder when the tax is due to expire

You will still get a Renewal Reminder (the forms are called V11s and V85/1s) like before, if at any point you want to check the tax status of your car you can use the DVLA’s Vehicle Enquiry System but make sure you have your V5C registration certificate to hand. 

Want to know how much your tax will be?

Unfortunately we cannot help make tax more fun, but we can make it easier to calculate. By using our car tax calculator you can find out how much tax you will need to pay for the car you are interested in buying.

What’s happening in 2017?

From April 1, 2017, if you buy a new car your tax will be based on a combination of CO2 emissions, a ‘Standard Rate’, and the list price with an introductory cap of £40,000.

For the first year of ownership only, the rate will be based on CO2 emissions similar to the current system, After that all cars emitting 1g/km or more will be subjected to £140 ‘Standard Rate’ duty each year, while those costing £40,000 or more will pay an additional £310 per year for the first five years of Standard Rate payment.

To find out more about the 2017 changes, click here.

Need more information? These articles may help

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