The Chancellor is tightening his grip on cars and drivers. His aim is to make us cleaner and greener motorists, and make the heavier polluters pay more.
To help lower your costs, here are five ways to beat the Budget.
1. Go for a car with lower road tax
A new road tax system comes into effect in 2009 with more bands to encourage drivers to opt for cars with lower carbon dioxide emissions. These new bands are more closely stacked, so it’s vital to study the CO2 emissions of any car you're looking to buy to make sure you're not paying over the odds. An Audi A6 driver could save £180 by choosing a 2.7 V6 TDi instead of a petrol 3.2 V6 model. At the other end of the scale, a Mazda 2 1.3 will go from £120 road tax in 2008 to £90 in 2009.
2. Choose a slower depreciating car
A large petrol engined car may seem like a great idea as you drive out of the showroom, but three years down the line it will be a different story. Depreciation takes a large chunk out of any car’s value, but thirsty cars will be hard to shift as environmental concerns and fuel prices increase. A Ford Focus with 1.6-litre petrol engine may be £1500 cheaper than its diesel counterpart, but the diesel will hold its value more tenaciously, possibly by as much as £2500, so the added cost when new is easily cancelled out.
3. Choose a petrol engine
Anyone who drives less than 15,000 miles per year could well be better off with a petrol-engined car. Most petrol-powered models cost less to buy than their diesel equivalents and, if you don’t rack up a big mileage they can work out cheaper in the long term. This is especially true now that the cost of diesel has risen considerably above that of petrol. With the latest generation of petrol engines offering economy close to that of diesel engines, an efficient petrol engine can make financial sense for a great many drivers.
4. Drive a low emissions or alternative fuel vehicle
To qualify for zero road tax, a standard petrol- or diesel-engined car must produce 100g/km or less of carbon dioxide emissions. Alternative fuel cars, such as the Toyota Prius petrol-electric hybrid, can produce up to 120g/km of CO2 for a road tax bill of just £15 this year, though there will be a small charge in 2009. All of the low emissions and alternative fuel vehicles on sale in UK can travel into London’s Congestion Charge zone for free, saving £8 per day.
5. Buy a nearly new car
Part of the 2008 Budget introduced plans for a ‘showroom tax’ that will come into effect in 2010. This is a one-off payment on any new car, though cars that produce 130g/km and less of carbon dioxide will be exempt. The cost can rise to as much as £950 for the highest emitting cars, so a way to beat this is to buy a nearly new car. If you don’t mind not being the first name in the log book, you can avoid the ‘showroom tax’ and even save something off the list price.