New car prices to rise in 2010
09.12.2009 - Dominic Sacco
(14)
The price of new cars is set to rise by 2.5 per cent in 2010; VAT was originally cut to 15 per cent in the 2008 pre-budget report, but now it's due to return to 17.5 per cent on January 1, 2010. This will affect all goods and retailers across the country, including the price of new cars and fuel.
Chancellor of the Exchequer Alistair Darling announced the news in the government's pre-budget report today.
The price of car tax in 2010 will also change. A maximum £35 rise for the most-polluting models will come into effect in April 2010, but owners of cars with low CO2 emissions could see savings of up to £30.
Drivers who buy a new car after April 1, 2010 will face a first-year rate - or 'showroom tax' - based on CO2 emissions.
New cars which emit less than 130g/km of CO2 will be exempt for the first year, but more polluting cars will have higher fees. For example it'll cost £950 to tax a vehicle which emits more than 255g/km for the first year, then £435 each year thereafter.
For full details on car tax and pricing, read our complete guide to car tax . The Chancellor also said electric cars would be exempt from company car tax for five years.
