New Road Tax Price Increase!

bery_451

Hi,
When buying a brand new car whether you buy it outright from the dealership or lease it brand new is the customer liable to pay for the road tax for the 1st year or is the road tax usually paid by the dealer or leasing company as a good will gesture courtesy?

If it is a 2 year leasing contract then road tax is usually covered in 1st year right or covered for 2 years?

A mate of mine signed up to a 2 year new car leasing contract back in Feb/Jan before the virus pandemic. Leasing company shut down for 2 months from march and now they re-opened asking for additional £45 road tax due to new road tax rules from last month April the 1st or leasing order wont be fulfilled they said.

Who is liable for this £45 tax hike increase? The customer or the leasing company or car manufacturer or dealer?

My mate has a disability road tax exemption certificate from the government so if customer is liable then will this certificate cover it or logbook must be classed and registered as disabled 1st but leasing company has V5 logbook so how the hell will this work out? Is it possible to pay £45 upfront and claim back afterwards to avoid delays to the order?

neilmcl

The 1st year tax is included as part of the on the road (OTR) price, so ultimately the buyer/customer pays for it.

Car_54

bery_451 said:

My mate has a disability road tax exemption certificate from the government so if customer is liable then will this certificate cover it or logbook must be classed and registered as disabled 1st but leasing company has V5 logbook so how the hell will this work out? Is it possible to pay £45 upfront and claim back afterwards to avoid delays to the order?

Your mate should call the leasing company. It must be something they deal with routinely.

bery_451

neilmcl said:

The 1st year tax is included as part of the on the road (OTR) price, so ultimately the buyer/customer pays for it.

Okay so 2nd or 3rd year of the leasing/hire contract the customer has to pay for the road tax and only the 1st year the road tax is included in the OTR price right?

Does OTR applies to full outright purchases or can it applied to leasing contracts too?

If applies to leasing then who is liable for this road tax price hike increase?

Finally can disability road tax exemption certificate from the government be applied to new car leasing contracts or only for motability cars?

Car_54

Your mate should read his contract. I would be amazed if there isn't a clause covering any changes in tax, and I'd be even more amazed if the customer doesn't have to pay .

AdrianC

Leases normally include VED.

If it's being bought, then it'll depend if it's brand-spankin' or pre-reg. If pre-reg, then the "first payment" will have been paid on registration, will get a pro-rata refund at keeper change just the same as any other, then the new keeper will tax it at the subsequent-payment rate. Which, for a low CO2 car, may well be more. It's up to the deal you strike as to whether the dealer cover that or not.

Any payment is going to be at the rate effective at the time - so, yes, if it's post-budget, the budget rate will come into play. Are you sure it's a budgetary increase? Even the top bands are only £40 increase - on £2k or so... Are you sure it's not due to a change in emissions measurement causing it to fall into a higher band?

Penelopa.Pitstop

£45 is nothing. Some customers were asked to pay extra £750, because VED went up after 1st of April. They expected to collect their cars before that date, but it didn't happen. I know of one broker, who agreed to cover half of the increase. Normally, VED is included in the lease, but if deal assumed delivery before 1st of April, increase in VED may not be included. If you agreed on deal with delivery after 1st of April, increase was already included in the price.

AdrianC

Penelopa.Pitstop said:

£45 is nothing. Some customers were asked to pay extra £750, because VED went up after 1st of April. 

No VED band went up £750. The most any band went up is £40.

Some cars were rebanded on 1st April, due to a change in the way emissions were measured. That is not the same as "VED going up".

Penelopa.Pitstop

It's VED increase at first registration. Car went a few bands up due to new WLTP emission numbers. According to BMW forum, it was £775 that was requested to be paid before lease start, due to VED change.

bery_451

Penelopa.Pitstop said:

£45 is nothing. Some customers were asked to pay extra £750, because VED went up after 1st of April. They expected to collect their cars before that date, but it didn't happen. I know of one broker, who agreed to cover half of the increase. Normally, VED is included in the lease, but if deal assumed delivery before 1st of April, increase in VED may not be included. If you agreed on deal with delivery after 1st of April, increase was already included in the price.

Its the owner of the cars that are legally liable for road tax. Were not the legal owners of leased cars. Where does it say on the contract? If you can show proof where it says customer is liable for tax changes/increases? I cant see it on a contract and if they breach the contract the contract becomes automatically void/cancelled. No way the customer should be liable for any charges/losses in any marketplace due to the virus pandemic as its not like we customers caused the outbreak to begin with. Because this pandemic is something out of our control so we should not be liable.

£45 can full tank a car with petrol and £45 for most people is a lot of money. 

Car_54

bery_451 said:

Penelopa.Pitstop said:

£45 is nothing. Some customers were asked to pay extra £750, because VED went up after 1st of April. They expected to collect their cars before that date, but it didn't happen. I know of one broker, who agreed to cover half of the increase. Normally, VED is included in the lease, but if deal assumed delivery before 1st of April, increase in VED may not be included. If you agreed on deal with delivery after 1st of April, increase was already included in the price.

Its the owner of the cars that are legally liable for road tax.

if they breach the contract the contract becomes automatically void/cancelled.

1.  No. It's the keeper, not the owner, who is liable. [Vehicle Excise and Registration Act 1994, section 1(1(d))]

2.  No it doesn't. Try breaking a contract (e.g. stop paying your rent or mortgage) and see what happens. You'll  find the contract is not void, and the courts will happily enforce it.