Experts are warning drivers that they could be slapped with an enormous tax bill next year with new rules set to cost motorists hundreds of pounds.
According to new research, new car buyers will pay an extra £417 on average in 2025 thanks to a rise in first-year rates for Vehicle Excise Duty (VED).
This follows Labour’s Autumn Statement which announced that increased first-year rates, which could see the most polluting vehicles pay double the amount of tax.
The data found that diesel drivers will be hit hardest by the changes, given that most vehicles have higher emissions output.
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Some drivers could end up paying more than £1,000 once the new car tax changes launch
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On average, buyers of new vehicles could see a car tax increase of £1,113 per vehicle – more than double the rise facing petrol drivers.
While rates of new diesel vehicle registrations have been falling in recent years, they still represent thousands of sales every year, particularly vans.
Diesel buyers will pay an additional £26.1million in tax if the same number of vehicles are purchased in the first six months of the new financial year.
While petrol car buyers will spend more – £89.4million – they will only be paying an average of £503 per car more.
Tom Banks, insurance expert at Go.Compare, said: “The increased VED rates mean most new car buyers will be paying a lot more than they were expecting in 2025, but there are ways you can minimise the impact this will have on your finances.
“For instance, consider purchasing a low-emissions car that will place your vehicle in the cheaper tax bands.
“If you can’t purchase a suitable hybrid or EV, consider opting for a nearly new vehicle instead. This gives you that new car feeling for a fraction of the price, and will allow you to dodge the increased tax.”
Buyers of other fuel type vehicles will also face price hikes, although they will not be as significant as petrol and diesel.
Hybrid drivers will pay between £135 and £327 extra towards the tax depending on whether they buy a petrol or diesel vehicle.
Those purchasing a new electric vehicle will only need to spend an additional £10, given the estimated 28,864 sales based on 2024 figures.
In total, the increased fees will see drivers spend an additional £162.9million if the same number of vehicles are bought in the first six months of the new tax year.
Banks added: “Otherwise, see if there are any other ways you can reduce your motoring spending to make up for the increased tax costs.
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Diesel drivers are set to be hit the hardest under the new rules
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“For example, comparing car insurance policies might allow you to find a provider that offers the same level of cover for a lower price, and driving in a way that minimises your fuel usage could help to reduce costs further.”
