There will be changes to 'showroom tax' from April 2025 that will add a substantial amount
A new study has found that drivers in six areas of the UK can expect to pay more than £500 extra from April as a result of a tax rise. According to the research, car buyers in the Mid Ulster area of Northern Ireland will pay an average of £689 extra tax next year as a result of Vehicle Excise Duty .
The research comes from Go.Compare car insurance, which reviewed Department for Transport figures on the number of new private vehicles registered in each region in the first half of the 2024 tax year. It applied the existing and upcoming first-year rates for VED to these vehicles to estimate how much more new car buyers will pay next year in each part of the UK, if buying habits stay the same.
This suggests that drivers in Inner London are opting for vehicles which emit some of the highest CO2 levels, despite the city operating an ultra-low emissions zone. Based on this, drivers may be choosing to pay the ULEZ charge rather than opt for a greener car. Tom Banks, car 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. If you live in a region where buyers tend to go for high CO2 cars, then drivers in your area will be the most impacted by the rise. But, if you’re worried about how the changes will affect you, there are ways to minimise the impact on your finances.
About the data The increase in Vehicle Excise Duty drivers will pay in the first six months of the 2025 tax year due to the rise in first-year rates is based on DVLA and Department for Transport data. First, we took DfT figures on the number of privately owned cars first registered in April to September 2024, split by local authority area, fuel type and CO2 band.
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